Archive for July, 2009

Unemployment spreads distress in U.S. home loans

July 30, 2009

Thu Jul 30, 2009 1:23am EDT

NEW YORK (Reuters) – Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday.

Metro areas with populations of at least 200,000 in those four states accounted for 35 of the 50 highest foreclosure rates.

Mortgages have failed the fastest in the areas with the greatest overbuilding, purchases by speculators and reliance on riskier loan products to improve affordability.

But the source of the mortgage trouble has swung from lax lending standards to unemployment.

Some of the areas with the most severe foreclosure activity have started to show improvement as price cuts and first-time buyer tax credits lure purchasers.

With the unemployment rate near a 26-year high and many employers cutting wages, more consumers in areas that were initially spared in the foreclosure explosion are now behind in their home loan payments.

More than 20 percent of areas with above-average foreclosure activity were in Oregon, Idaho, Utah, Arkansas, Illinois and South Carolina in the first half of the year. That shift points to growing unemployment more than to fallout from subprime and adjustable-rate loans, RealtyTrac said in its midyear metropolitan foreclosure market report.

While total foreclosure activity kept rising, “some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, while new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.

“As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere,” he said.

Home prices through May plunged more than 32 percent from their mid-2006 peak, with losses varying sharply depending on region, according to Standard & Poor’s/Case-Shiller indexes.

A rise in foreclosure properties pressure prices of other homes for sale.

“As unemployment rises, we are seeing a change in the financial profile of the people seeking our help,” Suzanne Boas, president of Consumer Credit Counseling Service of Greater Atlanta, said this week.

“We are serving an increasing number of people who work in professional services and skilled trades,” she said. “These people have maintained solid incomes their entire lives, but are now in financial trouble and are reaching out for counseling to help avoid foreclosure.”

In June, 72 percent of homeowners who got foreclosure prevention counseling from the agency, which serves all 50 states, were either unemployed or reported a drop in income.

RealtyTrac this month reported a record 1.9 million foreclosure filings on more than 1.5 million properties in the first six months of this year. The pace picked up after various temporary freezes ended in March.

The company forecasts 4 million filings for the year.


Las Vegas, Nevada, had the highest metro foreclosure rate, with 7.45 percent, or one of every 13 households with a loan, getting at least one filing in the first half of the year. Filings include notice of default and auctions.

Cape Coral-Fort Myers area in Florida had the second highest rate and Merced, California was third. Both reported a slight decrease in foreclosure activity from the previous six months but a higher pace than the first half of 2008.

Other metro areas in the top 10 were the California cities of Riverside-San Bernardino-Ontario, Stockton, Modesto, Bakersfield and Vallejo-Fairfield; the Phoenix metro area and Orlando, Florida, metro area.

Foreclosure activity rose in all but Stockton and Modesto from the prior six months and from the first half of 2008.

Stockton had a 4 percent drop in the first half from the prior six months and a nearly 13 percent fall from the first half of 2008.

Other hard-hit areas showed declining foreclosure activity in the first half, including Detroit and Cleveland, RealtyTrac said.

(Editing by Kenneth Barry)


Economic Recovery: Take Two

July 30, 2009

July 28, 2009
Silver Spring, MD
AFL-CIO Executive Council statement

The legacy of the Bush Administration has been a perfect storm of economic devastation — in finance, housing and jobs.  The challenge of fixing this economic mess is enormous – and urgent.  Creating good jobs that cannot be outsourced is central to the solution. 

 Despite much-touted “green shoots,” the prognosis for the U.S. economy keeps getting worse.  The official unemployment rate hit 9.5 percent in June and is likely to exceed 10 percent by later this year and remain high throughout 2010 – when mid-term elections will take place.  We have lost an extraordinary 6.5 million jobs since the onset of the recession, and we are 8.8 million jobs short of where we should be, taking into account the growing working age population.

 This is the sharpest loss of jobs and the greatest increase in unemployment of any downturn since the 1930s — and we have not yet hit bottom.  Rapidly rising unemployment has devastated millions of families and their communities, and its consequences for the quality of bank assets, particularly home mortgages, threatens what progress has been made in stabilizing our financial system. 

 Of course, the official unemployment rate does not even begin to tell the whole story: stagnant wages and falling hours, discouraged workers, long-term unemployment, and spikes for particular sectors and population groups all contribute to the depth and breadth of the labor-market crisis we are facing.  As Lawrence Mishel of the Economic Policy Institute (EPI) told the Washington Post recently, “There is a ton of pain in the pipeline.”

 The number of workers who have given up looking for a job or who have been forced to settle for a part-time job is reaching record proportions, with 16.5 percent of workers under-employed or unemployed in June — more than 25 million workers.  Almost 30 percent of unemployed workers have been out of work more than six months, and more than 600,000 will exhaust their unemployment benefits by September if nothing is done.

 The job losses are spread throughout the economy – and so is the pain.  Since the recession began in December 2007, we have lost 1.9 million manufacturing jobs and 1.3 million construction jobs – often the most vulnerable sectors in an economic downturn.  But unlike past recessions, the job losses are not confined to a few sectors.  1.5 million jobs have been lost in professional and business services, as well as almost 400,000 in transportation and another 848,000 in temporary help services.  Fourteen states already have unemployment rates over 10 percent.

 An unemployment rate of 10 percent corresponds roughly to 18 percent of the workforce unemployed or underemployed in a given month.  If current projections hold, over the course of twelve months, roughly a third of the workforce could be unemployed or underemployed.  A 10 percent national unemployment rate implies an unemployment rate of 16-18 percent in the Hispanic and African-American communities, with 36-40 percent unemployed or underemployed over the course of twelve months.  Blue-collar unemployment is now 14.7 percent and adult male unemployment has already hit 10 percent.  Theaverage length of unemployment is now 24.5 weeks, the highest level on record.  If unemployment continues to grow, child poverty could reach 27 percent, and black child poverty more than 50 percent. 

 Those lucky enough to have jobs are not escaping the adverse impact of the downturn.  High unemployment has hammered wages, which grew at only a 1.4 percent annual rate over the last six months, while weekly earnings actually fell because of shorter work hours.  Wage cuts and unpaid furloughs are occurring in many workplaces, and some employers have stopped contributing to their pension plans.  As the recession continues and unemployment stays high, it can be expected that wages for most workers will not keep pace with inflation in the near future.
 The toll of unemployment, underemployment, retrenched work hours and eroded wages will be broad-based declines in family income and increased poverty and economic distress.  It will be several years before incomes return to their pre-recession level of 2007 — already a disappointingly low level because of the weakness of the last “recovery.” 

More Action Needed to Create Jobs and Support Families

It is crystal clear that urgent action from the federal government is needed to boost economic growth and jobs, and invest in America’s future: we need a second installment on the Obama Administration’s economic recovery program, and this second installment must focus like a laser beam on job creation.  This is not the time to fret about budget deficits or inflation.  It is entirely appropriate to enact policies that will temporarily increase fiscal deficits for a year or two in order to generate jobs and income during this economic crisis.  At this critical juncture, the consequences of the government failing to act on a sufficient scale and in the right way could be catastrophic. 

 The American Recovery and Reinvestment Act (ARRA) was a bold and well-crafted program to generate and save jobs, to provide social supports for those in need and to lay the foundation for future growth.  It has already started delivering and is on track to generate roughly three million jobs and to lower unemployment by up to two percentage points. 

Unfortunately, because of the confluence of so many long-term negative trends in place for many years, the economy and the labor market have seriously deteriorated since the ARRA was designed, and the original economic recovery plan is no longer sufficient.  Last November the blue-chip consensus was for 7.7 percent unemployment at the end of 2009.  By March, the consensus forecast was for 9.2 percent unemployment in late 2009, despite the passage of a much larger stimulus than expected in November.  Clearly, the economy the Obama Administration inherited was in deep trouble and in even worse shape than generally realized in the spring. 

 This recession is global, so a coordinated global response is crucial to any successful recovery.  The U.S. government must show leadership in the international G-8 and G-20 meetings to insist that the major economies come together and agree on coordinated fiscal stimulus and a coherent financial regulation strategy.

Since the onset of the recession, U.S. households have lost $14 trillion in wealth from the collapse of the housing bubble and the erosion in stock values – approximately an entire year’s output.  Dean Baker of the Center for Economic and Policy Research estimates that our economy now faces a demand shortfall of $2.6 trillion over this year and next.  The ARRA is simply too small to fill a hole this big in the economy, and no amount of waiting and false optimism will change that uncomfortable economic fact.

Our growth model in recent decades—debt-financed consumer spending and asset bubbles, combined with huge trade deficits—has failed.  We cannot borrow and outsource our way to prosperity: without good jobs in America, there will be no sustainable economic recovery.  As private demand pulls back and Americans rebuild their savings, the most effective path to sustainable growth is an ambitious public investment agenda.

 There is no viable alternative to public investment right now.  In the private sector, consumer demand will continue to be depressed by unemployment, stagnant wages, and the erosion of stock market and housing wealth.  Exports will not be a source of growth because global demand is plummeting and the dollar is still overvalued.  Meanwhile, the Federal Reserve’s reductions of short-term interest rates have failed to spark a recovery, and taxpayers ended up saving much of the tax cuts that were included in the last two stimulus bills rather than spending them.  It will require public investment and other spending to boost demand and create jobs directly.  This must also be coupled with efforts to ensure that credit is made available to manufacturing interests to help stimulate production and job creation.
Concerns over inflation are unwarranted.  The most recent reports indicate that inflation is stabilizing at a level near zero, and on June 24th the Federal Reserve predicted that inflation will remain “subdued for some time.”

Concerns over budget deficits are exaggerated, especially for consideration of policies that will increase deficits only in the short-term.  An effective economic recovery package will boost growth (and tax revenues), while also increasing future productivity and competitiveness.

What to do

The challenge is to mitigate the rise in unemployment, lessen the adverse impact of the downturn on those affected, and generate good jobs to ensure a robust recovery.  At the same time, we should rebuild and modernize our crumbling infrastructure and revitalize our manufacturing sector, while ensuring that our public sector can provide the services we count on to keep our communities safe and our families healthy. 

This can be accomplished in a number of ways.

We should 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.  We should also increase food stamp spending as needed to help families cope with the downturn.

We should increase aid to state and local governments.  We also need to bolster the financial stability of independent government agencies such as the U.S. Postal Service.  As states and local governments cut back spending and jobs to balance their budgets, they are exacerbating the recession—offsetting the ARRA—undercutting future growth, failing to assist vulnerable families, and leaving our communities less safe and secure.  The Center on Budget and Policy Priorities (CBPP) calculates the shortfall of state budgets at $350 billion for 2009 through the first half of 2011, leaving a shortfall of $210 billion after passage of the ARRA.  Goldman-Sachs projects that state actions to adjust their budgets will penalize national growth over the next twelve months by 0.6-0.7%.

State cutbacks threaten vital services and jobs, including health and education, police and firefighting, transportation and other public services.  According to CBPP, at least 21 states are cutting health insurance or services for low-income children and families; at least 24 states are cutting or proposing to cut K-12 and early education; at least 32 states have implemented cuts to public colleges and universities.  In addition, at least 41 states and the District of Columbia are cutting hours and jobs for state government employees. 

We should increase spending for needed infrastructure and clean energy projects, even for those projects with a time horizon longer than two years.  Every billion dollars invested in transportation systems and infrastructure puts 30,000 people to work.  New investments in aviation, highways, mass transit, rail, ports and waterways will stimulate major job creation, improve our deteriorating infrastructure, and support U.S. manufacturing and production jobs. To the absolute maximum extent possible, we should ensure that we use American-made inputs and manufactured goods in all recovery-funded projects.  We should be neither defensive, nor apologetic, for using the Buy American provisions supported by the American public and legislated by the Congress.  As President Obama has said, we need sustained public investment-led growth to restore our country’s competitiveness.  But no investment plan will succeed if we don’t make more of what we buy here at home.

And we should look to historical precedent for other effective and successful job creation examples.  The Works Progress Administration, led by Harry Hopkins during the Roosevelt Administration, put 3.4 million Americans to work in one year – 1935 – in thousands of projects that had a lasting impact on our national life.  Such an effort can be developed to provide employment in distressed communities.
President Roosevelt’s strategy can be re-engineered to help revitalize the modern manufacturing sector.  Today’s unemployed can be put to work renovating factories and public structures and installing new equipment.  New financing and marketing plans for local manufacturers should also be developed to support domestic production and jobs. 

And to revitalize our industrial base, we must also invest in our technical knowledge base.  Two years of technical training should be offered to recent high school graduates and recently unemployed adults.  Tuition at community colleges, universities and technology institutes should be subsidized by the federal government, as it was after World War II.  Every American worker should be given the opportunity to acquire the skills and education he or she needs to reach peak potential. 

We must act decisively at this critical moment in time.  We must meet the considerable challenges we face with actions on a scale appropriate to the crisis, while also keeping in mind the kind of economy and country we hope to build for our children.

AFL-CIO Executive Council Calls for Round 2 of Economic Recovery

July 29, 2009

By Mike Hall
July 29, 2009

The nation’s working families and the economy desperately need a second installment on the Obama administration’s economic recovery plan. That plan, says the AFL-CIO Executive Council,

must focus like a laser beam on job creation.

Along with approving an economic policy statement outlining the urgent need for more economic recovery initiatives, the council, convening for a one-day meeting yesterday in Washington, D.C., also welcomed two new members, Letter Carriers (NALC) President Fredric Rolando and AFGE Vice President Rogelio Flores.

The council honored former council members William Young, who recently retired as NALC president, and AFGE Vice President Andrea Brooks, who died in April. To help support the work of the Alliance for Retired Americans, the council proposed the creation of the Preserving Union Values Charitable Foundation.

Although the first round of economic stimulus has made huge strides is shoring up our economy, the council pointed out in its statement that the Bush administration’s economic legacy created such “economic devastation—in finance, housing and jobs,” that

The challenge of fixing this economic mess is enormous—and urgent. Creating good jobs that cannot be outsourced is central to the solution.

Unemployment is expected to hit 10 percent later this year and remain high in 2010. So far 6.6 million jobs have disappeared since the beginning of the recession in 2007, including 1.9 million manufacturing jobs and 1.3 million construction jobs. For those with jobs, wages are stagnant or shrinking and many workers face forced furloughs. As the council statement says:

It is crystal clear that urgent action from the federal government is needed to boost economic growth and jobs, and invest in America’s future.

Among other investments, a second recovery plan should:

  • 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.

Click here to read the full statement.

New council member Rolando served as the union’s executive vice president before taking over from Young, who retired earlier this month. In its statement honoring Young’s service, the council says Young, who became NALC president in 2002, took the reins at a time when

the NALC—and the entire union movement—were fighting hard to resist a viciously anti-union White House and Congress….Young is widely recognized as a leader not only of the NALC but of the entire union movement.

Flores joined AFGE in 1968 and held various local and district offices until he was elected as a national vice president in 1996. He takes over the council seat that Brooks occupied from 2005 until her death in April.

Brooks began her union career at Ft. Benjamin Harrison in Indianapolis, rising through the ranks of AFGE while working at the Department of Veterans Affairs. She served for 10 years as president of AFGE Local 490 at the Veterans Affairs regional office in Los Angeles; She was also vice president of the California Labor Federation.

In 2000, she was elected as AFGE’s vice president for women and fair practices in 2000. In its statement, the council says:

Brooks’ name became a synonym for the good causes she believed in and fought for: civil rights, human rights, women’s rights. She declared that she wanted to help mobilize a civil rights movement of every race, culture, orientation and gender identity. She did exactly that…we honor the legacy of more justice and fairness and equality she left behind for us.

In the statement proposing the new charitable foundation, the council says many union workers are concerned that their children and grandchildren may not be able to experience and “cherish the richness of a life of involvement with the labor movement.”

The Preserving Union Values Charitable Foundation would allow active and retired union members to make tax-exempt contributions for

the purpose of preserving and carrying forward the proud heritage of the union movement. We believe many people associated with the labor movement would choose to leave a legacy in this way if given the opportunity….The proposed charitable foundation would ensure that current and future generations of Americans have an opportunity to benefit from the values that made the labor movement a defining force in American history.

AFL-CIO President John Sweeney has agreed to head the proposed foundation following his upcoming retirement. Funds raised would be split between the National Labor College (NLC) and the Alliance, which, says the council statement, “has consistently excelled with the quality and effectiveness of its field work.”

‘Help Wanted’ counting stimulus jobs

July 29, 2009

By RYAN KOST (AP) – 1 day ago

PORTLAND, Ore. — How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program’s first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state’s accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime.

“Sometimes some work for an individual is better than no work,” said Oregon’s Senate president, Peter Courtney.

With the economy in tatters and unemployment rising, Oregon’s inventive math underscores the urgency for politicians across the country to show that spending programs designed to stimulate the economy are working — even if that means stretching the facts.

At the federal level, President Barack Obama has said the federal stimulus has created 150,000 jobs, a number based on a misused formula and which is so murky it can’t be verified.

At least 10 other states have launched their own miniature stimulus plans and nine others have proposed one, according to the National Conference of State Legislatures. Many of them, like Oregon, have promised job creation as a result of the public spending.

Ohio, for instance, passed a nearly $1.6 billion stimulus package even before Congress was looking at a federal program. When Gov. Ted Strickland first pitched the idea last year, he estimated the program could create some 80,000 jobs.

In North Carolina, a panel authorized hundreds of millions of dollars in new debt to speed up $740 million in government building projects. According to one estimate, the move could hurry the creation of 25,000 jobs.

As the bills for these programs mount, so will the pressure to show results. But, as Oregon illustrates, job estimates can very wildly.

“At best you can say it’s ambiguous, at worst you can say it’s intentional deception,” said economist Bruce Blonigen of the University of Oregon. “You have to normalize it into a benchmark that everybody can understand.”

Oregon’s accounting practices would not be allowed as part of the $787 billion federal stimulus. While the White House has made the unverifiable promise that 3.5 million jobs will be saved or created by the end of next year, when accountants actually begin taking head counts this fall, there are rules intended to guard against exactly what Oregon is doing.

The White House requires states to report numbers in terms of full-time, yearlong jobs. That means a part-time mechanic counts as half a job. A full-time construction worker who has a three-month paving contract counts as one-fourth of a job.

Using that method, the AP’s analysis of figures in Oregon shows the program so far has created the equivalent of 215 full-time jobs that will last three months. Oregon’s House speaker, Dave Hunt, called that measurement unfair, though nearly every other state that has passed a stimulus package already uses or plans to use it.

“This stimulus plan was intentionally designed for short-term projects to pump needed jobs and income into families, businesses and communities struggling to get by,” Hunt said in a statement. “No one ever said these would be full-time jobs for months at a time.”

Still, critics say counting jobs, without any consideration of their duration, isn’t good enough.

“You can’t let them say, ‘Well, we never said it was going to be full-time,'” said Steve Buckstein, a policy analyst for the Cascade Policy Institute, a free-market think tank. For the price of Oregon’s $176 million, lawmakers could have provided all 3 million state residents with a one-hour job paying about $60, he said.

“By their definition, that’s 3 million jobs,” Buckstein said. “Is anybody gonna buy that?”

Oregon’s 12.4 percent unemployment rate surpasses the national average of 9.4 percent. To supplement the federal stimulus, the state sold bonds to pay for everything from replacing light bulbs to installing carpet and finishing construction of a school in the farming community of Tillamook.

The “Go Oregon” program is still new. According to its latest progress report, 8 percent of the money has been spent and hundreds of projects have yet to be completed. More paychecks are bound to be written as construction continues.

If Oregon’s dollars-to-jobs ratio remains steady, the program will create about 688 full-time, yearlong jobs. So far, it’s generated only enough hours to employ 54 people full-time for a year.

Still, contractor Deborah Matthews of Pacificmark Construction, based in Milwaukie, Ore., is happy for any work. Her company picked up three contracts for painting, installing a water filter system and refurbishing a maintenance building. Prior to those contracts, which lasted about six weeks, she had laid off nearly all her construction workers. She brought back three full-time and hired a part-time worker.

“It was a little bit,” she said, “to just keep us going.”

Copyright © 2009 The Associated Press. All rights reserved.

From: The Drive for Decent Work – Full Employment Now!


July 22, 2009



New York City, Friday & Saturday, November 13-14, 2009

Our country is in the throes of an economic crisis-the most severe since the Great Depression of the 1930s. Unemployment is at the disaster level. And even before the onset of our current, deep recession, chronic unemployment, low and stagnant wages, myriad unmet needs and unprecedented environmental degradation were endemic.

Current Job Crisis

Nearly 30 million workers fully or partially jobless (June 2009)

Most rapid job less of any downturn since the Great Depression

5 million fewer jobs in the U.S. economy since the onset of the recession.

High unemployment expected to persist, even if the economy “recovers.”

Many of the long-term unemployed will lose benefits, their savings, their homes and more

Weak Stimulus

By the Administration’s own estimate, the economic stimulus will make up for a fraction of the millions of jobs lost since the recession began.

Nor will the Stimulus stem the continuing job hemorrhage.

“Good Old Days”

Even in “good” times: 5 million or more women and men were officially jobless; hidden unemployment afflicted many millions more; and poverty wages were rampant. Inequality reigned, our infrastructure was crumbling, and human services fell far short of needs.

We must not go back to those “Good Old Days.”

Instead, we should be guided by President Franklin D. Roosevelt (1933):
We cannot be content, no matter how high the general standard of living may be, if some fraction of our people … is ill-fed, ill-clothed, ill-housed, and insecure.

Real Reform

Now is the time to organize and mobilize to create a just economy–one that assures living wage jobs for all, sustains the environment, and repairs our social and physical infrastructure.



For more information, to make reservations, to participate in planning the conference and subsequent action:

* Visit the website of the National Jobs for All Coalition,
* Telephone, 212-972-9877 to register for the November Conference or
* E-mail to register for the November Conference

Machinists Union Launches ´JOBS Now´ Campaign

July 15, 2009

Harry Kelber
July 10, 2009
Will Urge Strong Support at AFL-CIO Convention.

The International Association of Machinists and Aerospace Workers (IAM) will propose an eight-point “JOBS Now!” initiative, that it w ill ask the AFL-CIO to adopt at its 2009 convention this September. The ambitious goal of the IAM campaign is to find work for the 30.2 million Americans who are unemployed, involuntarily working part-time or who want a job and can´t find one, says Tom Buffenbarger, IAM´s international union president.

The IAM resolution calls for a national jobs program. similar to the public works projects during the Great Depression, that can “rebuild America´s manufacturing sector and put seven million Americans back to work—immediately,” Also included in the resolution are proposals for a tuition-free, two-year skills training program; creation of green jobs; operating assistance to America´s transit system and a “Buy American law with teeth.”

The Machinists intend to press the Obama administration for a second economic stimulus package, one aimed at the manufacturing and transportation sectors. A union statement said: “President Obama´s economic stimulus plan is a start toward economic recovery but the program is not broad enough to create needed jobs now, rebuild our manufacturing sector, provide training for workers and children preparing for the future, maintain our national defense, provide a real Buy American program and reform labor law.”

Meanwhile, the global economy is sinking deeper into recession. In April, Industrial production was down 33 percent in Japan, 19 percent or more in Italy, Germany, Taiwan and Sweden, and more than 12 percent in Great Britain and the United States, according to the magazine, The Economist.

With many economists predicting that layoffs will probably continue into 2011, Buffenbarger pledges that “until this mega-recession ends and real, sustained job-creating growth starts, JOBS Now! will remain our primary focus.”

IAM President Will Propose Reforms to Strengthen AFL-CIO

Buffenbargar is expected to present a series of financial and organizational reforms to the delegates at the AFL-CIO´s September convention–changes, which he said, would dramatically reshape and revitalize the 54-year-old labor federation.

The proposed changes are an outgrowth of a two-day conference on June 2-3, called by Buffenbarger and attended by 23 international unions representing three-fifths of the entire AFL-CIO membership. They discussed a set of draft constitutional amendments and resolutions contained in a White Paper, prepared by the IAM, which dealt with three subjects: declining political power, solvency of the federation´s finances and governance.

According to Buffenbarger, the meeting focused on systemic changes that could strengthen the labor federation´s finances and increase its political clout “We discussed a range of changes needed to modernize and upgrade existing capabilities. We tallied up the current expenses and matched them to projected revenues. And we sought to reassert the historic role of the Executive Council,” Buffenbarger explained.

The White Paper noted that the labor movement had contributed $294.5 million to senators and representatives currently serving in the 111th Congress, yet labor´s clout had not increased on par with the increased donations. Another issue of deep concern to the participating unions was the perilous financial state of the AFL-CIO, whose net assets had declined from $66 million in July 1, 2000 to a negative $2.3 million on June 30.

In order for the affiliated unions to have some authority over the finances of the AFL-CIO, Buffenbarger is calling for new financial controls to “increase transparency and accountability.”

A third issue at the meeting was the governance of the labor federation, with the IAM complaining that it is becoming increasingly staff-driven, but should be more officer-driven. The union is recommending the creation of four executive vice presidents, each administering departments and programs as assigned by the president.

This is the first time in more than a decade that dissatisfaction with the Sweeney-Trumka leadership has surfaced so broadly, with a strong possibility there will be heated debates, challenges and unexpected outcomes at the convention. Thanks to Buffenbarger and the IAM, the reformers finally have a voice.

With only two months left before the start of the AFL-CIO convention, the Sweeney-Trumka faction has said nothing about their intentions. Not a word about their 43 candidates for Executive Council, who, if past practice holds, will play deaf and dumb until they are nominated at the convention. Delegates should´t be voting for candidates about whom they know nothing. We´re going to try to smoke them out and force them to debate.

—Harry Kelber

American Chronicle, 7/15/2009.

Double Digit Unemployment Triggers Government Paid Jobs

July 13, 2009

Robert Jobs

A recent NY Times Op Ed by Bob Herbert, July 10, 2009, has set off a series of demands that there is no time to wait for our own government to become the employer of last resort. “Last resort” time period has arrived. For example, with Michigan unemployed well above its last figure of 12.9% and other hard hit states in the same crisis; and with double digit unemployment very soon becoming the national figure, our federal government must immediately jump into the fray.

Both Herbert and Paul Krugman, the left-liberal columnists of the Times, have been chastising the Obama Administration for not being more aggressive given the economic and financial crisis gripping our country. But, columnists can only report what they see and recommend policy actions. Congressional policy leaders will take note and then discard the paper in the trash can. It is up to peoples organization to bring the mass action
where it belongs.

The green shoots of economic rebound that are often referred to have been discounted by everyone, and even by President Obama himself. The Administration has even said the unemployment rate will get higher.

Factor into that actual unemployment figures the tens of thousands of unemployed who have given up seeking work and that low double digit figure goes close to 15%. Right now they are not even counted in the current 9 plus percent.

This BLOG, “Jobs or Income Now”, sets the framework for mass action. Putting a human face on the staggering ravages of unemployment is necessary. Maximum use of the Blog can bring home those stark realities.

Triggering Mechanisms

Clearly, the Administration and Congress needs to immediately set up a triggering mechanism that will set off the government becoming the employer of last resort. Yes, just like in the 1930s when the WPA was started.

The first trigger could be the 13% level of unemployment in a State. Then the figure should be reduced to 12%, 11% and 10%.

Unemployment Compensation

At the same time, Congress must extend unemployment compensation to make sure that those on unemployment insurance will continue to receive their benefits for another 26 weeks. This should not wait until the last moment which only increases the stress people are facing.

Permanent Government Jobs?

President Obama has said that any federally financed job programs will not be permanent. By saying that there is recognition that the federal government must start employing the unemployed immediately. He then said that those same jobs must become private sectors jobs as quickly as possible. This is an arguable point.

What would be wrong with our own government doing the construction work on the highways, bridges and roads; as well as, in the public transportation system? Also, employing artists, writers and other creative people to document the suffering taking place across the country would be necessary to counter the right wing/Republican denigration of these efforts. This is exactly what happened during the 1930s when the right wing attacked FDR and Congress for these programs. They were turned back by the various photographic, artistic and related programs that brought home the human suffered requiring action on the part of our government.

Union Jobs at Livable Wages

The federal government being the employer would certainly be the most economic way to proceed. It would also bring those workers into the American Federation of Government Employees [AFGE] where they can have a grievance procedure to protect their working rights as well as health and pension benefits.

Giving money to construction companies on a sub-contracting basis just adds to the cost and far less work would be done; and workers employed would be far less. There is a good chance, also, that these jobs will not be union jobs.

This Blog can do a lot to spread the word.

Disproportional Unemployment Hits the Black Community

July 13, 2009

Eric Brooks

Unemployment is devestating the Black community at a much higher rate than any other. As reported in Dallas South on July 2, official unemployment in the African-American community is 14.7% while the rate for whites was 8.7%. The rate for Black men was 16.4%. These are “official” unemployment rates, which leave out many of the unemployed, so the real rate is much higher.

The year over year difference in unemployment rates by race for quarter 1 2008/2009 is as follows:

2008 2009
White 4.8% 8.2%
Black 8.9% 13.6%

The New York Times (NYT) reported on July 13 that Job Losses Show Wider Racial Gap in New York.

While unemployment rose steadily for white New Yorkers from the first quarter of 2008 through the first three months of this year, the number of unemployed blacks in the city rose four times as fast, according to a report to be released on Monday by the city comptroller’s office. By the end of March, there were about 80,000 more unemployed blacks than whites, according to the report, even though there are roughly 1.5 million more whites than blacks here.

The NYT article says economists “were not certain why so many more blacks were losing their jobs”. It is, however, clear that there is a continuing social issue of economic racism at work in our society that needs to be addressed. This type of statistical differential in unemployment demands affirmative action on behalf of the impacted community.

“African-Americans have been hit disproportionately hard,” said Frank Braconi, the chief economist in the comptroller’s office. “The usual pattern is that the unemployment rate among African-Americans tends to be about twice as high as for non-Hispanic whites, but the gap has widened substantially in the city during the past year.”

Historically, the unemployment rate for blacks has always been higher than for whites. But since the start of the recession, in December 2007, the overall rate has risen by 4.6 percentage points — driving the black unemployment rate as high as 15 percent in April. The jobless figures among blacks became enough of a national issue that at a White House news conference last month, President Obama was asked what he could do to “stop the bloodletting in the black unemployment rate.”

The president said that to help any community, whether it be blacks, Latinos or Asians, he needed to “get the economy as a whole moving.”

Among the reasons for the disproportional impact of the current economic crisis on the Black community in New York is the cuts in federal and state jobs, such as postal workers, and service sector workers. Both are financial sectors that traditionally have been accessible to African-Americans so the cuts impact that community more.

The NYT reports that James Parrott, chief economist at the Fiscal Policy Institute, found “In comparing jobs data for the 12 months through April 30 with the previous one-year period, … white New Yorkers had gained jobs while blacks and other minority residents had lost them.”

While it may be true that we have to get the economy moving, it is vital that we deal with the issue of unemployment as a social responsibility. The statistics do not bring home the human cost that lies behind their simple numbers. However, for Black people in our lives the impact is huge. For most of us there is no leeway to survive unemployment. Further, if the trends continued, the length of time that Black people are unemployed may be much longer than for white people.

This is a situation that can’t be addressed by financial manipulations at a distance. Nor can the lives of those impacted await a general economic turn-around before receiving help. It is vital to aggressively provide sustenance to all those who are unemployed, particularly when the community is disproportionately impacted at such a huge differential, as is the Black community. As a society we can’t wait for “market forces” or the “system” to get fixed before we reach out to our sisters and brothers, to the millions with children and elderly depending on them, and provide desperately needed help.

A program for Jobs or Income Now is urgently needed to help to address this situation.

Eric Brooks can be followed on Twitter at

Message to Obama: We Need a New Deal

July 12, 2009

Carl Bloice – Editorial Board
Black Commentator
July 9, 2009

Now they are out to nickel and dime us to death. Here in my home town the traffic and parking department has been prevailed upon to “step up” its enforcement activity – and maneuvering to have parking meters work far into the night – in order help cover some of the city’s budget deficit. In Massachusetts, legislators have slapped a tax on candy. The California state
legislature recently endorsed a $1.50 tax on a bottle of alcohol and added an additional $15 to the vehicle license fee.

The astonishing thing is that such measures, being undertaken across the country, are being approved and even plotted by some liberals and progressives. It’s high time we all recognize that the people who get hit by traffic fines are the ones without garages and “sin taxes,” by and large, target working people. They are not the ones who got the economy into the current mess but if some people have their way, they will pay through the nose for it. This, at a time when unemployment is soaring, working hours are being cut and paychecks are shrinking.

Nor is there anything good to be said for pitting the budgets for police and fire services against health and welfare services. That’s not the way to nurture the progressive political majority needed to really address the current crisis. Yet, in the absence of measures to bring in new sources of revenue to run our cities and states, well-meaning people are maneuvered into challenging each other for pieces of the shrinking pie.

All across the nation, schools are being shuttered, senior meal programs decimated, community health centers eliminated and legal aid for the poor hammered. We are being told there is no other way and that we should stoically accept this austerity and count what blessings we have left. The problem is that if the sacrifices being forced upon our families and communities are really necessary, then they are not being doled out with anything approaching equity. They’re still living it up big time in some parts of town.

“The mood among financiers is suddenly more cheery,” wrote John Plender in the Financial Times the other day. In London and New York “trading profits are up and bonuses are back” And, rather than being reduced to something more reasonable, executive compensation packages are on the way up. “There is also a growing suspicion on both sides of the Atlantic that bankers, a lethal breed whose activities have pretty much throttled the global economy while causing government deficits to balloon, are going back to business as usual – a frightening prospect for taxpayers everywhere,” he wrote.

Meanwhile, the country’s employment crisis continues to worsen. When wandering in the desert, beware shimmering water on the horizon,” read the Financial Times’ Lex Column, July 2. “If May’s better than expected jobs report offered the dehydrated US labor market hope of succor, June’s miserable effort was a mouthful of sand.” The June jobs data from the Labor Department contained “few signs of life at all,’ it said adding, “Slowing growth in weekly earnings, now at 2.7 per cent year on year, is another serving of angst. And falling hours plus sluggish wages mean a further drag on US consumption – already constrained by debt-laden household balance sheets and tight credit. The mirage, and with it hopes of a speedy recovery, has vanished.”

“The entire growth in jobs over the last nine years has now been wiped out – the economy currently has fewer jobs than it had in May 2000,” says Economic Policy Institute economist Heidi Shierholz. “The labor force, however, has grown by 12.5 million workers since then. “This is the only recession since the Great Depression to wipe out all jobs growth from the previous business
cycle, a devastating benchmark for the workers of this country and a testament to both the enormity of the current crisis and to the extreme weakness of jobs growth from 2000-2007.”

As economist Dean Baker notes in his Jobs Byte column, the percentage of the unemployed who have been out of work for more than 26 weeks increased by 2 percentage points to 29.0 percent in June and “Many of these workers will soon be exhausting even their extended unemployment benefits.”

When drawing up the economic stimulus plan, the Obama Administration relied on a projection of an 8 percent jobless rate this year. It became clear a couple of months ago that figure would miss the mark. It now stands at 9.4 percent and the consensus is that it will reach 10 percent by Christmas. Pimco CEO and chief investment officer, Mohamed El-Erian, now suggests that it may go as high as 10.5-11 percent sometime next year. “Economists are currently spreading the word that
the recession may end sometime this year, but the unemployment rate will continue to climb,” Bob Herbert wrote in the New York Times last week “That’s not a recovery. That’s mumbo jumbo.”

“There are now more than five unemployed workers for every job opening in the United States,” wrote Herbert.

“The ranks of the poor are growing, welfare rolls are rising and young American men on a broad front are falling into an abyss of joblessness.

The “broad front” to which Herbert refers may relate to what I consider some of the worst mumbo jumbo floating around out there: the idea that education guarantees a good job or any job at all. One of the striking aspects of the job stats so far this year is the number of out-of-work college graduates. It keeps on growing. The percentage of unemployed people with some college or an Associate degree was 4.4 percent last June, 7.7 this May and now stands at 8.0 percent. For those under 27 years old with a Bachelors degree or better, it’s 5.9 percent. “Everyone is worse off in the current downturn, and young college grads are no exception,” writes Kathryn Edwards of the Economic Policy Institute. adding, “Although still better off than their peers without a higher education, young college graduates face challenges unique to their age and situation – it is likely that they have considerable debt from financing school, have had no time to build up savings, and, if looking for their first job, are not eligible for unemployment benefits.”

“The tough economy and tight labor market have tarnished the luster of a bachelor’s degree for young college graduates seeking employment, wrote Tony Pugh for the McClatrchy newspapers. “New monthly survey data from the Center for Labor Market Studies at Northeastern University in Boston finds that during the first four months of 2009, less than half of the nation’s 4 million college graduates age 25 and under were working in jobs that required a college degree. That’s down from 54 percent for the same period last year.”

“The problem is most acute in the 25-and-under age group among Asian female graduates and black and Hispanic male graduates,” wrote Pugh. “The survey, of 60,000 households, found less than 30 percent of Asian female grads, 32 percent of Hispanic male grads and just over 35 percent of young black male grads working in jobs that require a bachelor’s degree.”

Of course, a young graduate working at a low-paying job means one less job opening for a kid with no degree.

The figures for unemployment among college graduates are, of course, relatively low percentages; the greatest burden of joblessness is falling on those without a high school diploma (15.5 percent) and high school graduates (9.8 percent) – especially young African Americans (37.9 percent – seasonally adjusted) and Latinos (31 percent in May). The figure for 20-24
year old Latinos was 16.5% in May.

“Why this rampant joblessness is not viewed as a crisis and approached with the sense of urgency and commitment that a crisis warrants, is beyond me,’ wrote Herbert, one of the very few mainstream commentators to consistently deal with this crisis in minority communities. “The Obama administration has committed a great deal of money to keep the economy from collapsing entirely, but that is not enough to cope with the scope of the jobless crisis.”

In a clear and hard hitting piece July 2, Nobel Prize winning economist and New York Times Columnist, Paul Krugman, laid out the challenge the worsening jobs picture places before the Obama Administration and the nation. He wrote that “as in the 1930s, the opponents of action are peddling scare stories about inflation even as deflation looms” and “So getting another round of stimulus will be difficult. But it’s essential.”

“Obama administration economists understand the stakes,” wrote Krugman. “Indeed, just a few weeks ago, Christina Romer, the chairwoman of the Council of Economic Advisers, published an article on the “lessons of 1937” – the year that F.D.R. gave in to the deficit and inflation hawks, with disastrous consequences both for the economy and for his political agenda.

“What I don’t know is whether the administration has faced up to the inadequacy of what it has done so far.”

“So here’s my message to the president: You need to get both your economic team and your political people working on additional stimulus, now. Because if you don’t, you’ll soon be facing your own personal 1937.”

As he prepared to depart on a foreign trip last week, the President issued a Fourth of July Message to the country that contained the words: “as long as some Americans still must struggle, none of us can be fully content.” So true. As the Times put it in an editorial a few days earlier: “The jobs report for June should put a chill on hopes for an economic recovery anytime
soon.” And it makes a compelling case for more government stimulus, as unpopular as that idea may be in Washington. Americans all over the country are struggling.”

Petty and punitive taxes falling on working people is not the answer. Nor is robbing Peter to pay Paul.

What’s needed to get us out of this mess is a unified message to the people who run our cities, states and those in Washington charged with protecting the general welfare, that we need a new deal. Editorial Board member Carl Bloice is a writer in San Francisco, a member of the National Coordinating Committee of the Committees of Correspondence for Democracy and Socialism and formerly worked for a healthcare union.

H.R. 2202: Worker Empowerment Act

July 11, 2009

Eric Brooks

On May 8, 2007 Rep. Jim McDermott of Washington State submitted HR 2202 before the House of Representatives, the Worker Empowerment Act. The bill was referred to committee.

The goal of this Act is to recognize, anticipating the current crisis, the social responsibility to support workers who become unemployed due to the various stresses in the economy.

The main point of the bill was to extend Social Security to create a federally funded reemployment adjustment assistance program, managed by the states.

To be eligible, the employee had to be employed continuously for the two-year period prior to separation by the last employer, have left involuntarily and without cause, or have left voluntarily “under circumstances which would, by virtue of the terms of a collective bargaining agreement, satisfy the relevant State law requirements relating to the type of separation from employment that is required in order to be eligible for unemployment compensation”.

Born in 1936, Congressman McDermott is a working class child of the Great Depression. His official biography mentions:

Rep. Jim McDermott (D-WA) is serving his eleventh term in the U.S. House of Representatives, representing the 7th Congressional District in Washington State, which includes Seattle and parts of several neighboring communities. As a senior Member of the Ways and Means Committee, Rep. McDermott is chairman of the Income Security and Family Support Subcommittee and also serves on the Subcommittee on Trade.

Jim McDermott was born in Chicago, Illinois on December 28, 1936. He was the first member of his family to attend college and Jim went on to finish medical school.

The bill has certain limitations that weaken it. Requiring that the worker have worked continuously for one employer for the two years prior to being laid off penalizes people who anticipate problems in their employment and find new employment, only to lose that job. Further, due to employment rules there is more and more use of short term employees, often with terms of less than 18 months. These people would be excluded for no fault of their own.

Stipulating that the worker must not have been terminated for cause encourages the use of “human behavior” rules to ensure that regular human behavior can result in termination at the employer’s discretion. For instance, web browsing at work is something that is a broad behavior and which can become a basis for termination.

Extending Social Security to become a true social net to meet the needs of working families buffeted by the cycles of capitalist over production that result in massive unemployment such as we are experiencing today points out an important direction in implementing Jobs or Income Now.

Eric Brooks can be followed on Twitter at