U.S. Raises Estimate for 10-Year Deficit to $9 Trillion

August 25, 2009

EDMUND L. ANDREWS | The New York Times | August 25, 2009

WASHINGTON — The Obama administration, citing an economic downturn that has been deeper than it had first thought, raised its estimate on Tuesday of the government’s deficit over the next decade to $9 trillion from $7.1 trillion.

Despite the shortfalls, White House officials said they saw no reason to back away from President Obama’s ambitious and costly goal of overhauling the health care system. The new amount includes the cost of the health care overhaul as well as about $600 billion in additional revenue that the administration hopes to raise, two initiatives Congress has yet to approve.

“A lot of people will look at this deficit and say we cannot afford health care reform,” said Peter R. Orszag, director of the Office of Management and Budget. But Mr. Orszag said the opposite was true: the only way to control spiraling Medicare costs, he said, was to get control of overall health care costs by overhauling the system

“The size of the fiscal gap is precisely why we must enact fiscally well designed health care reform now,” he said.

Republicans are certain to attack that argument. Indeed, they are already doing so.

White House officials predicted that the budget deficit this year will peak at $1.58 trillion, though they said the 2009 shortfall will be about $261 billion lower than they had predicted in May. The main reason is that officials have decided that they will not need another round of bailout money for the nation’s banks. The Congressional Budget Official also estimated a deficit this year of about $1.6 trillion.

In the earlier budget forecast, administration officials had created a “placeholder” of $250 billion to cover possible costs of a additional bank bailouts. They also assumed higher costs for the Federal Deposit Insurance Corporation’s expansion of deposit insurance and debt guarantees.

Even so, the administration is projecting that annual deficits will remain above $1 trillion through 2011 and will be bigger than any since World War II, even when measured conservatively as a share of the nation’s economic output.

The government’s total debt would roughly triple by 2019 to $17.5 trillion under the new estimate, almost $2 trillion more than the White House estimated in May. Measured as a share of the nation’s economic output, public debt would hit 76.5 percent of gross domestic product by 2019 — by far the highest percentage in the past half-century — from about 56 percent this fiscal year. This year will be the first time the number has exceeded 50 percent since World War II. The previous estimate was about 67 percent.

The biggest reason for the additional red ink is the administration’s recognition that the recession has been deeper and unemployment has been much higher than White House forecasters assumed in their first budget estimate in May.

The added depth of the downturn is expected to increase payouts for unemployment benefits and other safety-net programs, while reducing tax receipts more than originally expected.

The administration had originally assumed that the economy would shrink 1.2 percent and that unemployment would average about 8.1 percent this year. Instead, the economy is expected to shrink almost 2 percent while unemployment is expected to average 9.3 percent in 2009 and 9.8 percent in 2010.

For the first time, administration officials officially predicted on Tuesday that unemployment would climb above 10 percent by early next year, from 9.4 percent in July.

The costs of the additional unemployment and the slower growth extend beyond the next year or two, not just because the economy will take longer to return to normal but also because the government’s interest expense will be compounding more rapidly.

Mr. Orszag estimated that, by 2019, interest expenses will account for more than 80 percent of the projected deficit of $917 billion.

Without offering any details, the White House budget director said that President Obama will soon unveil plans to reduce long-term deficits tied to soaring costs of Medicare, Social Security and other entitlement programs.

Copyright 2009 The New York Times Company


Rhode Island: Government Shutdown Planned

August 25, 2009

Associated Press | The New York Times | August 24, 2009

Rhode Island will shut down its state government for 12 days and trim millions of dollars in financing for local governments under a plan Gov. Donald L. Carcieri proposed to balance a budget hard-hit by surging unemployment and plummeting tax revenue. The shutdown would force 81 percent of the roughly 13,550-member state work force, excluding its college system, to stay home a dozen days without pay before the start of the new fiscal year in July. The closings come as the worst recession in decades has eliminated hundreds of millions of dollars in tax collections and pushed unemployment to 12.7 percent, the second-highest jobless rate in the nation behind Michigan.

Jobs and More Jobs, Now and Forevermore

August 13, 2009

Frank Stricker | OpEdNews.com | July 29, 2009

Obama’s stimulus plan is not doing enough to bring economic recovery, especially in the area of job creation. Among the explanations I have seen are these: most of the money has not been spent; the stimulus was too small; the depression is worse than expected; many projects were not, after all, shovel ready; and the recovery program was never meant to create or save more than 2 or 3 million jobs.

We do not know how many jobs the stimulus program is creating and saving. We do know that most of the stimulus money was not dedicated to job creation. For most of the job problem, the administration is really asking us to hold on until a general economic revival.

But how long do we have to wait and what will general recovery bring us? It is widely agreed that the return of prosperity will take a long time. History supports that view. In the Great Depression it took twelve years and big war-time budgets to bring full recovery. Even in the 2001 slump, a short one that ended in 8 months, jobs declined for 32 months, and it took another 16 months – a total of 4 years – for job levels to get back to pre-recession levels. That woeful job performance meant that the Bush recovery had only two or three years to expand the job base before the next economic slump began.

We need to add about 2 million jobs a year just to keep up with an expanding labor force. From January of 2001 through January of 2007 we added fewer than 4 million non-farm private sector jobs. So we were already behind millions of jobs when the financial meltdown began in 2007. In the current depression we have already lost 7 million jobs, and there are 9 million part-timers who want full-time work. The real unemployment rate is over 18% and a range of estimates about our short-term and long-term job deficit is between 15 and 30 million jobs.

What should we do? It is silly to expect “natural” forces (low interest rates and free markets) to do the job. This is Hooverism and it is still very popular in the Republican Party (check Bobby Jindal and many Republicans in Congress). Mostly it means little federal action except for tax cuts and telling people to work harder. Hooverism did not work well in 1929-1933, and, it has not been effective in the last three decades. There was good job growth and rising average wages in the late 90s, but that was unusual.

We have had a too many workers chasing too few jobs since the early 70s. That’s one reason the real hourly wage is no higher than it was in 1973.

We need to put millions of people to work in regular jobs. We need programs that are flexible enough to expand during recessions because they are always under way, even during prosperous times. We cannot rely on business forces; even in time of prosperity many businesses are addicted to trimming their work forces and keeping the lid on pay and benefits. We need direct job creation by the federal government.


In a few years, committed and energetic federal bureaucrats, working with local governments and private groups, can get 15 million additional people working, or working at better jobs, or moving from part-time to full-time jobs. We do need a change in our governing ethos – fewer Brownies and Geithners – but it can happen. If the Civil Works Administration could usefully employ 4 million people in just a few months in 1933-1934, and if the WPA employed 2 to 3 million people every month for six years, we can do more, with our much larger labor force.

What kind of jobs can we create. Here are four suggestions:

-We need to build a lot of affordable housing; we need a major national commitment to build reasonably priced homes and apartments in pleasant surroundings.

-We need a new Civilian Conservation Corps””or something like-it to build and restore parks, to beautify our cities and towns, to expand the understaffed forest service, and so on.

-We need an environmental corps that works on labor intensive programs such as home insulation, tree planting, and installing alternative energy systems.

-If scholars are right about the payoff of investing in toddlers, we need a wider, deeper system of pre-schools. We ought to expand and upgrade Head Start, make it a model program, one whose employees have high ideals, professional skills, and esprit de corps, and one whose students make permanent advances in their skills and aspirations.

There is plenty to do. Businesses won’t do much of what needs to be done. We need a federal program that directly creates millions of jobs all the time. We need it now, to serve as the job rich stimulus plan that we should have had in Stimulus I. But we need it later too. We finally have a chance to do something about three decades of lousy job markets. Let’s not blow it. Let’s not wake up in the midst of recovery, five years from now, to realize that average real wages are still, after 40 years, just where they were in 1973. And that 10 million people still need jobs.

Frank Stricker belongs to the National Jobs for All Coalition and the author of Why America Lost the War on Poverty””and How to Win It (2007). He is Emeritus Professor of History at California State University, Dominguez Hills.

ProfessorEmeritus of History, Labor and Interdisciplinary Studies, California State University, Dominguez Hills. Author of Why America Lost the War on Poverty–and How to win it (Univ. of North Carolina Press, 2007)

Another Hurdle for the Jobless: Credit Inquiries

August 8, 2009
Johathan D. Glater | The New York Times | August 7, 2009

Digging out of debt keeps getting harder for the unemployed as more companies use detailed credit checks to screen job prospects.

Out of work since December, Juan Ochoa was delighted when a staffing firm recently responded to his posting on Hotjobs.com with an opening for a data entry clerk. Before he could do much more, though, the firm checked his credit history.

The interest vanished. There were too many collections claims against him, the firm said.

“I never knew that nowadays they were going to start pulling credit checks on you even before you go for an interview,” said Mr. Ochoa, 46, who lost his job in December tracking inventory at a mining company in Santa Fe Springs, Calif. “Why would they need to pull a credit report? They’d need something like that if you were applying at a bank.”

Once reserved for government jobs or payroll positions that could involve significant sums of money, credit checks are now fast, cheap and used for all manner of work. Employers, often winnowing a big pool of job applicants in days of nearly 10 percent unemployment, view the credit check as a valuable tool for assessing someone’s judgment.

But job counselors worry that the practice of shunning those with poor credit may be unfair and trap the unemployed — who may be battling foreclosure, living off credit cards and confronting personal bankruptcy — in a financial death spiral: the worse their debts, the harder it is to get a job to pay them off.

“How do you get out from under it?” asked Matthew W. Finkin, a law professor at the University of Illinois, who fears that the unemployed and debt-ridden could form a luckless class. “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”

Others say that the credit check can be used to provide cover for discriminatory practices. Responding to complaints from constituents, lawmakers in a few states have recently proposed legislation that would restrict employers’ use of credit checks. While some measures languish, Hawaii has just imposed new restraints.

Business executives say that they have an obligation to be diligent and to protect themselves from employees who may be unreliable, unwise or too susceptible to temptation to steal, and that credit checks are a help.

“If I see too many negative things coming up on a credit check, it’s one of those things that raises a flag with me,” said Anita Orozco, director of human resources at Sonneborn, a petrochemical company based in Mahwah, N.J. She added that while bad credit alone would not be a reason to deny someone a job, it might reveal poor judgment.

“If you see a history of bad decision-making, you don’t want that decision-making overflowing into your organization,” she said.

More than 40 percent of employers use credit checks at least sometimes, according to a 2004 survey by the Society for Human Resource Management, up from 25 percent in 1998. The share has almost certainly risen today, say career counselors.

“It has been an ongoing and increasing issue,” said Mollie de Rojas, district coordinator for the local operations of the Ohio Department of Job and Family Services.

Credit counselors, worker advocates and the unemployed contend that a credit check is not always relevant to hiring decisions.

“There’s no relationship between being a personal trainer making $12 an hour” and having a good credit history, said Janet L. Newcomb, a career counselor in Huntington Beach, Calif. “People are being turned down for jobs on the basis of things that really have nothing to do with qualifications.”

That is the complaint of Kevin Palmer, 49, who for months lived at the same homeless shelter in Santa Ana, Calif., as Mr. Ochoa. After an interview that seemed to go well one day in June at a property management company, a manager walked him around the office the next day, introduced him to other employees and showed him an available desk.

A credit check later, the offer vanished.

It was “a glorified clerk’s job, taking homeowners’ complaints,” Mr. Palmer said of the opportunity, which paid about $39,000 and could have gotten him back on his feet after losing his condominium to foreclosure and filing for bankruptcy.

Last month, he says he found a job at a property management company in San Francisco — a company that did not run a credit check on him.

It is generally legal to run credit checks on job applicants, but some states have restrictions. In Washington, which has perhaps the most stringent requirement, a candidate’s credit history must be substantially related to the job under a law that took effect in 2007.

Last month, lawmakers in Hawaii approved a measure that generally allows an employer to review a credit history only after making an offer and requires the credit check to be “directly related” to job qualifications.

In California, Gov. Arnold Schwarzenegger vetoed a similar law. (New York law requires a background check’s findings to be related to the job, but it addresses criminal records and does not mention credit checks.)

Lawmakers in Michigan and Ohio have proposed barring employers from using credit history in making employment decisions.

“In my opinion, it’s discrimination,” said Representative Jon Switalski, the Democrat who proposed legislation in Michigan. “If you miss a few payments or you have medical debt, your skills as a pipefitter or an electrician don’t diminish.”

Courts have not been sympathetic to claims that discrimination is being cloaked in credit checks, said Angela Onwuachi-Willig, a law professor at the University of Iowa. “At what point does the fact that someone lives in a particular neighborhood or someone has a bad credit score become a way of eliminating people for illegal grounds?” she asked rhetorically. “Basically, the courts don’t protect against proxy discrimination.”

Stuart J. Ishimaru, the acting chairman of the federal Equal Employment Opportunity Commission, said the commission would probably issue guidance on the proper use of credit checks. Such guidance, though nonbinding, could offer some reassurance against lawsuits to employers who comply.

“It’s something that intrigues us and worries us,” Mr. Ishimaru said, adding that some job-related tests had led to discrimination claims in the past. “The question is, why do you use it? How is this a good screening device?”

Federal law requires employers to get the consent of job applicants before running credit checks, said Pamela Q. Devata, a lawyer in the Chicago office of Seyfarth Shaw.

And if they are considering denying someone a job based on a check, she said, “they have to notify the applicant.” That is intended to give someone a chance to explain circumstances or spot erroneous information.

When the job market improves and fewer people are fighting for slots, credit histories may become less important, said Michael C. Lazarchick, a career counselor in Pleasantville, N.J. “But these are lean and mean times.”

247,000 more unemployed in July is positive news?

August 7, 2009

Eric Brooks | August 7, 2009 | Special to this blog

In an article today, Reuters reports “Payrolls fall less in July, jobless rates eases”.  The article goes on to say

U.S. employers cut 247,000 jobs in July, far less than expected and the least in any month since last August, according to data on Friday that provided the clearest evidence yet that the economy was turning around.

With fewer workers being laid off, the unemployment rate eased to 9.4 percent in July from 9.5 percent the prior month, Labor Department data showed, the first time the jobless rate had fallen since April 2008.

This is a good example of news spin at its worst.  Over a quarter million more unemployed were added to the already devastating number of us struggling to keep food on the table and a roof over our heads. As usual, the people who are under- or un-employed are not mentioned, only the “positive news. This is the best showing (since) prior to the financial meltdown….”

The unemployment figures are very deceptive, for example leaving out the long term unemployed who have supposedly “given up” looking for work as well as the new entrants into the job market.The article mentions that “…in July the workforce fell by 422,000, far more than the 155,000 decline in June, suggesting jobless workers may have given up looking for new work.”  That is, almost a half-million folks disappeared off the rolls of the unemployed in a statistical vanishing act worthy of double-talking policy wonks but not of caring and sane policy makers who want to address the social problem of under- and un-employment.

No matter how you look at it, there remain over 30 million unemployed in the United States, and countless under-employed, who need jobs or income now.  In the crowing about this “positive news” the struggling unemployed are forgotten. The need for unity among the under- and un-employed to put our needs before the nation remains. We must refuse to be “disappeared” through statistical magic tricks; our voices matter.

We can demand our needs be met; we can demand jobs or income now.

The Destruction of the Black Middle Class

August 4, 2009

August 4, 2009 | Barbara’s Blog | Barbara Ehrenreich and Dedrick Muhammed

To judge from most of the commentary on the Gates-Crowley affair, you would think that a “black elite” has gotten dangerously out of hand. First Gates (Cambridge, Yale, Harvard) showed insufficient deference to Crowley, then Obama (Occidental, Harvard) piled on to accuse the police of having acted “stupidly.” Was this “the end of white America” which the Atlantic had warned of in its January/February cover story? Or had the injuries of class – working class in Crowley’s case – finally trumped the grievances of race?

Left out of the ensuing tangle of commentary on race and class has been the increasing impoverishment—or, we should say, re-impoverishment–of African Americans as a group. In fact, the most salient and lasting effect of the current recession may turn out to be the decimation of the black middle class. According to a study by Demos and the Institute for Assets and Social Policy, 33 percent of the black middle class was already in danger of falling out of the middle class at the start of the recession. Gates and Obama, along with Oprah and Cosby, will no doubt remain in place, but millions of the black equivalents of Officer Crowley – from factory workers to bank tellers and white collar managers – are sliding down toward destitution.

For African Americans – and to a large extent, Latinos – the recession is over. It occurred between 2000 and 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During the seven-year long black recession, one third of black children lived in poverty and black unemployment—even among college graduates– consistently ran at about twice the level of white unemployment. That was the black recession. What’s happening now is a depression.

Black unemployment is now at 14.7 percent, compared to 8.7 for whites. In New York City, black unemployment has been rising four times as fast as that of whites. Lawrence Mishel, president of the Economic Policy Institute, estimates that 40 percent of African Americans will have experienced unemployment or underemployment by 2010, and this will increase child poverty from one-third of African-American children to slightly over half. No one can entirely explain the extraordinary rate of job loss among African Americans, though factors may include the relative concentration of blacks in the hard-hit retail and manufacturing sectors, as well as the lesser seniority of blacks in better-paying, white collar, positions.

But one thing is certain: The longstanding racial “wealth gap”  makes African Americans particularly vulnerable to poverty when job loss strikes. In 1998, the net worth of white households on average was $100,700 higher than that of African-Americans. By 2007, this gap had increased to $142,600. The Survey of Consumer Finances, which is supported by the Federal Reserve Board, collects this data every three years — and every time it has been collected, the racial wealth gap has widened. To put it another way: in 2004, for every dollar of wealth held by the typical white family, the African American family had only one 12 cents. In 2007, it had exactly a dime. So when an African American breadwinner loses a job, there are usually no savings to fall back on, no well-heeled parents to hit up, no retirement accounts to raid.

All this comes on top of the highly racially skewed subprime mortgage calamity. After decades of being denied mortgages on racial grounds, African Americans made a tempting market for bubble-crazed lenders like Countrywide, with the result that high income blacks were almost twice as likely as low income white to receive high interest subprime loans. According to the Center for Responsible Lending, Latinos will end up losing between $75 billion and $98 billion in home-value wealth from subprime loans, while blacks will lose between $71 billion and $92 billion. United for a Fair Economy has called this family net-worth catastrophe the “greatest loss of wealth for people of color in modern U.S. history.”

Yet in the depths of this African American depression, some commentators, black as well as white, are still obsessing about the supposed cultural deficiencies of the black community. In a December op-ed in the Washington Post, Kay Hymowitz blamed black economic woes on the fact that 70 percent of black children are born to single mothers, not noticing that the white two-parent family has actually declined at a faster rate than the black two-parent family. The share of black children living in a single parent home increased by 155 percent between 1960 to 2006, while the share of white children living in single parent homes increased by a staggering 229 percent.

Just last month on NPR, commentator Juan Williams dismissed the NAACP by saying that more up-to-date and relevant groups focus on “people who have taken advantage of integration and opportunities for education, employment, versus those who seem caught in generational cycles of poverty,” which he went on to characterize by drug use and crime. The fact that there is an ongoing recession disproportionately affecting the African American middle class – and brought on by Wall Street greed rather than “ghetto” values – seems to have eluded him.

We don’t need any more moralizing or glib analyses of class and race that could have just as well been made in the 70s. The recession is changing everything. It’s redrawing the class contours of America in ways that will leave us more polarized than ever, and, yes, profoundly hurting the erstwhile white middle and working classes. But the depression being experienced by people of color threatens to do something on an entirely different scale, and that is to eliminate the black middle class.

Barbara Ehrenreich is the president of United Professionals and author, most recently, of “This Land Is Their Land: Reports From a Divided Nation.”

Dedrick Muhammad is a Senior Organizer and Research Associate of the Institute for Policy Studies.

Labor Department Awards $10 Million to Retrain Older Workers

August 4, 2009
August 03, 2009 05:12 PM ET | USNews.com | Emily Brandon | link

The U.S. Department of Labor awarded $10 million to organizations that connect older workers to jobs last week. The money is designated to retrain workers age 55 and older for jobs in high-growth industries such as healthcare and green jobs. The 10 grants worth approximately $1 million each were given to organizations in Indiana, Louisiana, Maine, Maryland, Michigan, Pennsylvania, Texas, Vermont, Washington, and Wisconsin. The Atlantic Philanthropies will also invest another $3.6 million in this effort.

The grants will target older workers who have been laid off and are seeking reemployment, who need to stay in the work force beyond the traditional retirement age, or workers who face barriers to finding a new job such as a disability or a low level of English proficiency. The Baltimore County Office of Workforce Development, one of the grantees, plans to use its $967,005 award to move lower skilled older workers into the health care industry and to retain experienced technical and professional workers after retirement age. The Workforce Development Council of Seattle-King County in Washington will invest $1,000,000 retraining older workers with disabilities, limited English proficiency, and ex-offenders for jobs in health care, information technology, and green sector jobs.

“Older Americans are an important part of the workforce, and their skills and experience are of tremendous value to our nation,” says Secretary of Labor Hilda Solis. “With expanded education and training opportunities, such as those made possible through this grant, older workers can broaden their own career opportunities and further contribute to the growth of industries across the United States.”

The unemployment rate for people age 55 and over was 7 percent in June, which is below the 9.5 percent unemployment rate for the labor force as a whole. But unemployed older workers often have a tougher time finding new jobs than their younger counterparts. The average duration of unemployment for workers age 55 and older in June was 29.9 weeks, while younger workers were typically out of work for 21.4 weeks. About 38 percent of the older workers had been job hunting for 27 weeks or more in June.

Income Loss Persists Long After Layoffs

August 4, 2009

The New York Times
August 3, 2009

RIVIERA BEACH, Fla. — Chuck Dettman said he had not really considered the notion back in 2001 that he and his friends in a job-search support group would never recover from being laid off.

The country was in a recession then, as now, and the professionals who had just lost their jobs met weekly at a local job center to network and trade advice. Despite the national economic problems, they remained confident that they would not only find work but would also be compensated as they had been in the past.

Eight years later, however, most of the people who formed the core of Mr. Dettman’s group have not made it back to their old income levels, even if they eventually landed jobs.

“I think there’s maybe only one or two that have been successful in making what they did then,” Mr. Dettman said.

Taken together, their struggles are stark illustration that it can take years for a worker’s earnings to bounce back after a layoff, and that it can take even longer for a layoff during a recession. Economists, in fact, say income losses for workers who are let go in a recession can persist for as long as two decades, a depressing prognosis for the several-million people who have lost their jobs in the current recession.

“On average, most workers do not recover their old annual earnings,” said Till von Wachter, an economics professor at Columbia University, who recently completed a working paper with two other economists that examined the long-term earnings of workers who lost their jobs in the recession of the early 1980s.

Mr. Wachter studied workers who had been with their companies at least three years, then lost their jobs when their employers reduced their work forces by at least 30 percent. He found that even 15 to 20 years later, most on average had not returned to their old wage levels. He also concluded that their earnings were about 15 percent to 20 percent less than they would have been had they not been laid off.

One of the main reasons for the drop-offs, according to economists, is that workers who endure a layoff are more likely to be laid off again.

“What tends to happen is the worker has to start over with a new employer, sometimes in a new industry,” said Ann Huff Stevens, an economics professor at the University of California, Davis. “You’re at the bottom of the totem pole again.”

(Although some unqualified workers are undoubtedly laid off, Mr. Wachter said he tried to correct for that possibility in his study. He focused on large-scale layoffs to ensure he was following mostly workers who lost their jobs through no fault of their own.)

The largest wage losses are typically for workers who had long tenures at their previous companies. The stability often allows them to build up skills specific to their employers or their industries and to accrue corresponding wage increases, but those skills can be worth less to other companies.

Older workers’ wages usually slide more than those of younger workers. Those with college degrees do slightly better than those without.

The networking group that Mr. Dettman helped form in 2001 was initially made up mostly of former colleagues of his from Pratt & Whitney, the jet engine maker, which laid off hundreds at the end of 2000 in a restructuring. The group members were all in their 40s and 50s.

Interviews with seven early members of the group found that many had been forced to drastically change their lifestyles to cope with lower incomes. Several have struggled with long bouts of unemployment. Some were laid off several times. Many have been forced to lean heavily on spouses’ incomes.

Mr. Dettman, who was a business analyst and earned just over $50,000 after nearly 20 years with Pratt, spent almost four years looking for work, exhausting his savings and his 401(k). He finally took a job as the chief financial officer of a drug and alcohol detox clinic run by his daughter and his son-in-law, getting paid three-quarters of what he used to make, without benefits. He quit two years ago to start his own Christian counseling service but has yet to draw a paycheck.

Jim Clark, 60, a former engineering assistant at Pratt who made about $49,000 a year, went back to school to earn a bachelor’s degree in organizational management but has still not found full-time paid employment. He now scrapes together about $20,000 a year as a cantor at his Roman Catholic parish on Sundays and by singing at weddings and funerals.

The only former group member interviewed who is now earning more than she did before is Karen Carron, a 19-year Pratt veteran and computer programmer. Ms. Carron, 49, who has a master’s degree in computer science, made about $69,000 a year as part of a team producing software for the F-35 Lightning II fighter jet.

About a year-and-a-half after being laid off, she found herself doing almost exactly what she had done before, only this time for a Pratt contractor. She now earns $80,000 a year.

Ms. Carron said she was not familiar with other programming languages that are more broadly used, so she was lucky to have found a job working on the same project. Otherwise, she said, she would almost certainly have had to take a pay cut.

In contrast, others in the group who managed to land steady paychecks have had to struggle to get back on track.

David Himmelheber, 58, worked more than 20 years at Pratt in the graphics department, earning about $54,000 a year at the end. He was one of the first members of the group to find a job, but it was in an entirely new field, as a business liaison for a vocational school, making about half his old salary. He eventually moved to teaching social studies at the school and now makes about $40,000 a year. He also found work as an adjunct professor at a local college. The two teaching assignments combined, however, bring in less than what he used to make at Pratt.

Bill Sankey, 62, a computer programmer, earned about $55,000 a year for a company that owned Pizza Hut franchises, before being laid off in 2001 when the company was sold. Since then, Mr. Sankey has been hired and laid off twice. At one point, he was making more than he did before his 2001 layoff. At his latest job, he is back to making about the same, though with inflation factored in, he is probably making less.

“I really haven’t progressed anywhere financially in eight years,” he said.

Millions of unemployed need jobs or income now

August 2, 2009

Author: Eric Brooks
People’s Weekly World Newspaper, 07/30/09 11:56

“The right to work is the right to life.”

— American Federation of Labor Convention, Chicago, December 1893

“Thus, because of the planlessness of the twenties, because of the lack of courageous action immediately following the collapse, the nation lost 105,000,000 man-years of production in the thirties.”

— Full Employment Act of 1945, Hearings, p. 1104

Unemployment and underemployment are causing misery, homelessness, hunger, and fear in the lives of tens of millions of working class people and our families, devastating communities, and impacting people of color, particularly African-Americans, Latinos, and most of all Native Americans disproportionately.

Those with money, the rich and the powerful, may find the masses of the unemployed an annoyance but, as Franklin Folsom writes in “Impatient Armies of the Poor: The Story of Collective Action of the Unemployed 1808-1942,” for the unemployed ourselves, leaving “a job means leaving a center and moving toward a periphery. It means leaving a collective pattern and entering formless isolation. Uniting under a boss or against a boss is a clear, understandable concept, but uniting against bosslessness is a very different matter.”

For the unemployed, watching our meager bank accounts drain away, experiencing the loss, one by one, of those sustaining resources— electricity, telephone, home, car, food—that keep our children and our spouses and ourselves whole and active is like sitting in a room out of which the air is being pumped, and knowing that each breath leaves less of what we need to survive.

In the midst of these challenges, community and collective struggle counteract the shame and fear that one may experience, and provide a path to expressing just demands for work or bread, jobs or income now. As 30 million unemployed and countless more underemployed working class people and our families struggle to survive today, it is urgent to demand that our society respond with aid that meets our needs and by providing work to all who want employment. The unemployed united, together with our allies, can fan with the breath of struggle the embers of hope that burn in our hearts.

A storm of numbers: The working class needs jobs or income now
Unemployment statistics are dispassionate reflections of a tsunami of economic pain rolling over the U.S. and global working class. It is important to hear the voices of millions of unemployed women, men, and youth asking for help behind the statistical recitation of percentages.

The national unemployment rate of 9.7%, with all 50 states and the District of Columbia reporting year over year increases, is a numeric reflection of families unable to pay the bills for the basics: food, mortgage or rent, electricity, gasoline, heating oil, car loans, medical bills, and school or child care fees.

El Centro, California, has 26.8% unemployment. California, Michigan, and Indiana all have regions with unemployment exceeding 15%.

The official unemployment rate for African-Americans is almost double that of the national rate, with Black men’s unemployment at 16.4%; the Hispanic unemployment rate is 12.2%.

The unemployment rate for youth 18-24 is a staggering 17.3%.

Native Americans have the rates of highest unemployment, ranging from 50% to 90% in different regions.

These rates are all “official” unemployment figures which vastly understate the real counts of the unemployed and ignore millions of the underemployed or the long term unemployed. Actual unemployment rates may be as much as double the official figures.
Many of the unemployed have depending upon us for sustenance a spouse, children, partners, or aged or infirm relatives or friends. The unemployed are a vast uncounted mass struggling to survive.

The phenomenon of unemployment is not limited to the United States. The International Labor Organization reported in January, “The global economic crisis is expected to lead to a dramatic increase in the number of people joining the ranks of the unemployed, working poor and those in vulnerable employment … Global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate.”

Highlighting the underlying crisis of overproduction which fuels this tsunami of unemployment, productivity in the United States rose 1.8% in Q1 2009, as hours worked fell faster than output. At the same time, real earnings fell by 1.2%. The masses of the unemployed did nothing to cause our joblessness, which results from cyclical and well documented capitalist overproduction; cycles which, along with political expediency, have been causing periodic mass unemployment since the early 1800s in the United States.

Working women, men, and youth will benefit from joining together to demand our needs be met, whether in union committees, church groups, community organizations or national organizations.

The AFL-CIO is calling for a second round of economic recovery programs, “The challenge of fixing this economic mess is enormous—and urgent. Creating good jobs that cannot be outsourced is central to the solution.”

Their demands include:

• Extend unemployment benefits immediately, by at least seven weeks, to help the hundreds of thousands of workers who would otherwise exhaust their benefits in the near term.

• Increase food stamp spending as needed to help families cope with the downturn.
Increase aid to state and local governments.

• Bolster the financial stability of independent government agencies such as the U.S. Postal Service.

• Increase spending for needed infrastructure and clean energy projects, even for those projects with a time horizon longer than two years.

The National Jobs for All Coalition is organizing a National Conference to Create Living-Wage Jobs For All, Meet Human Needs & Sustain the Environment in New York, Nov. 13-14. Further information is available at their web site, http://www.njfac.org.

Providing work is a social responsibility. The current economic crisis has been impacting working families for over a year; high unemployment continues to take its toll. A social response is urgently required. The under- and unemployed united, with our allies, can fight to create the programs we need: jobs or income, and hope, now.

Unemployment in Detroit reaches 17%, autoworkers send Obama letter on high-speed rail and jobs

August 2, 2009

Author: John Rummel
People’s Weekly World Newspaper, 07/30/09 14:52

DETROIT — The shocking news this week is Detroit’s official unemployment rate is now 17%. Unless action is taken to re-open closed auto plants and prevent others from closing, the number will surely go higher.

In view of this, the recent letter to President Obama from 50 “Concerned Autoworkers, Retirees and Supporters” takes on special importance. The letter says that while some jobs have been saved, 400,000 auto jobs have been lost and more jobs loss will follow as a result of the bankruptcy restructuring at Chrysler and General Motors.

The letter also warns of a climate “tipping point” and points out how the economic crisis is interwoven with the environmental crisis because auto use contributes 20% of all annual U.S. greenhouse gas emissions and 40% of all U.S. oil consumption.

To solve this combination of crises the letter calls for prioritizing the production of mass transit including buses, light rail, high-speed trains and the tracks they run on and building wind and water turbines as well as solar panels.

It credits the Obama administration for having taken a positive first step by creating two blue ribbon task forces; The White House Task Force on Middle Class Families, called Promoting American Manufacturing in the 21st Century, chaired by Vice-President Biden, and the White House Council on Automotive Communities and Workers, under the leadership of Labor Secretary Hilda Solis and Larry Summers, chief economic advisor.

It welcomes these initiatives and asks the president “to ensure that the size of the ideas being considered match the size of the problems we face.”

One idea to match the size of the problem is its call for government ownership saying since “the people are now major stockholders in GM and Chrysler, it would be in the national interest to assume direct ownership of the GM and Chrysler plants that are closed or closing (as interest on our investment) to expedite the retooling and conversion of these plants for the manufacture of the products.”

A good chance to put that retooling into action came last week. Midwest governors responding to President Obama’s high speed rail plan agreed to partner to work cooperatively to fund the Midwest Corridor, a regional high-speed rail plan that will connect cities throughout the region with frequent, reliable high-speed.

Through coordination, the region hopes to capture part of the $8 billion that President Obama has made available through the American Recovery and Reinvestment Act for high-speed passenger rail, the largest investment that the federal government has made in over a decade.

Al Benchich, one of the letter’s signers and former president of UAW Local 909 (GM) asked where will they get the trains, the tracks? “We have the people who can do the work, we’ve got the equipment; we just need work in the plants,” Benchich said.

Benchich indicated that Flint, where employment at GM has gone from 80,000 to less than 8,000 has plants that are fairly new and would be a good place for retooling to produce rail and other necessary products.

He also said plants that formerly made engines and transmissions could easily be converted to manufacture wind turbines.

What happens next is a good question. To re-open closed plants and develop an energy and transportation policy that meets the needs of people and the planet we live on requires more than action from the president. It also requires a huge coalition of elected officials at state and municipal levels, of unions and their membership, and of residents in the communities being affected by the crisis, be brought together to demand a new course. One hopes the 17% unemployment rate is enough to spur all parties to come together quickly.

jrummel @ pww.org