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Despair of the Jobless

It's a job loss recovery.
New York Times
August 7, 2003

Despair of the Jobless
by Bob Herbert

The folks who put the voodoo back in economics keep telling us that prosperity is just around the corner. For the unemployed, that would mean more jobs. Are there more jobs just around the corner?

This alleged economic upturn is not just a jobless recovery, it's a job loss recovery. The hemorrhaging of jobs in the aftermath of the recent "mild" recession is like nothing the U.S. has seen in more than half a century. Millions continue to look desperately for work, and millions more have given up in despair.

The stories have been rolling in for some time about the stresses and misfortunes that are inevitably associated with long-term joblessness: the bankruptcies, foreclosures and evictions, the dreams deferred, the mental difficulties anxiety, depression the excessive drinking and abuse of drugs, the family violence. There are few things more miserable than to need a job and be unable to find one.

How bad is it? The Economic Policy Institute in Washington reported last week that "since the business cycle expansion began in November 2001, payrolls have contracted by 1 million (1.2 million in the private sector), making this the weakest recovery in terms of employment since the [Bureau of Labor Statistics] began tracking monthly data in 1939."

John A. Challenger, who runs the outplacement firm Challenger, Gray & Christmas, said it is taking an average of 20 weeks for job seekers to find employment, and many are unable to match their previous salary. "Employers have all the cards," he said. "Not only are they sharpening their salary pencils, but the screening of candidates is probably the toughest it has ever been."

The official jobless rate, now 6.2 percent, does not come close to reflecting how grim the employment situation really is. The official rate refers only to those actively seeking work. It does not count the "discouraged" workers, who have looked for jobs within the last 12 months but have given up because of the lack of offers. Then there are the involuntary part-timers, who would like full-time jobs but cannot find them. And there are people who have had to settle for jobs that pay significantly less than jobs they once held.

When you combine the unemployed and the underemployed, you are talking about a percentage of the work force that is in double digits. That's an awful lot of lost purchasing power for a society that needs broad-based wage growth among its consumers to remain economically viable. Most Americans depend on their paychecks to get from one week to the next. If you cut off that paycheck, everything tends to go haywire.

Right now there is no plan, no strategy for turning this employment crisis around. There is not even a sense of urgency. At the end of July the Bush administration sent its secretaries of commerce, labor and treasury on a bus tour of Wisconsin and Minnesota to tell workers that better days are coming. But they offered no real remedies, and the president himself went on a monthlong vacation.

The simple truth is that the interests of the Bush administration's primary constituency, corporate America, do not coincide with the fundamental interests of workaday Americans. On the business side of this divide, increased profits are realized by showing the door to as many workers as possible, and squeezing the remainder to the bursting point. Productivity (based primarily on improvements in technology) is way up. Hiring, of course, is down. Part-time and temporary workers are in; full-time workers with benefits are out.

And then there's the ominous trend of sending higher-skilled jobs overseas to low-wage places like India and China, an upscale reprise of the sweatshop phenomenon that erased so many U.S. manufacturing jobs over the past quarter century.

Working Americans need jobs just to survive. But the Bush administration equates the national interest with corporate interests, and in that equation workers can only lose.

There are ways to spark the creation of good jobs on a large scale in the U.S. (I will explore some of them in a future column.) But that would require vision, a long-term financial investment and, most important, a commitment at the federal level to the idea that it is truly in the nation's interest to keep as many Americans as possible gainfully employed.