Hard Up for Work

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By Ricky Baldwin

Mary is laid off from her job in food service at the University of Illinois four times a year for a total of four and a half months. During this time, she does not count as unemployed.

Thousands of workers in Champaign County alone face an involuntary loss of work for weeks or months at a time, and lose homes, cars, get sick without access to care, or may go hungry or homeless, without ever being counted as unemployed. Nationally these numbers are in the millions.

Champaign County’s official unemployment rate dropped from 9.7 to 9 percent between August of 2010-2011.  Yet, according to the Illinois Department of Employment Security, there were almost 3000 fewer people working at the end of this period. The News-Gazette explained the paradox by noting that “for statistical purposes” many people without jobs do not count as unemployed.  But the choice is political; it gives the appearance of a stronger economic system than the real one we experience.

Who Counts?

The official ‘U3’ unemployment rate counts only those who are out of work and eligible for unemployment benefits. The current count is at about 14 million. Anyone who cannot show they looked for work this month will not be counted. This includes anyone hampered in their search by inadequate transportation, computer access, or other constraints. They are considered “marginally attached” to the workforce, and are officially counted at about 2.5 million at present – including about 1 million “discouraged workers” who have given up looking (US Bureau of Labor Statistics).

Students are not counted as unemployed, whether or not they look for work.

An injured worker may lose a third of his or her income on workers’ comp, if the claim is approved at all in the current climate of ‘reform’ (a.k.a. cuts). Either way, he or she will not count.

One of the major differences between previous recessions and the current crisis is the dramatic increase in involuntary part-time work, which officially impacted 9.3 million workers as of September 2011. None of these workers count.

The federal government started tracking the ‘discouraged,’ ‘marginally attached,’ and part-time workers who would prefer full-time work in 1995 with the “U6” rate. This assessment places current unemployment at 16.6 percent. However, even this more robust rate does not count students, disabled or injured workers, self-employed workers with shrinking hours, formerly full-time workers forced to accept short-term contracts with low pay and no benefits, prisoners, or small farmers and business owners who may be struggling to keep the lights on.

What to do – and what not to do – about it

While Congressional debates raged over the phony debt crisis, the jobs crisis deepened. By the time the spotlight swung to job creation, the boundaries were drawn, the choices narrowed to two: either cut taxes and spending a lot, or cut a little and spend a little. New Deal-type ideas, widely credited with ending the Great Depression and leading to an era of higher living standards, were officially off the table. These reforms, based on the work of economist John Maynard Keynes, including the Social Security Act, minimum wage and the eight-hour day, the right to join a union, and extensive investment in public works, did not fall from favor – they were pushed. After resisting continuous push-back from moneyed interests from the start, they have been increasingly undermined from the mid-1970s on. Since then, income tax rates on the wealthiest Americans have been cut nearly in half. Capital gains, where the big bucks are, and inheritance taxes have been suppressed, while sales and other regressive taxes take a much larger share of income from all but the wealthiest citizens.

The result of decades of deregulation, union-busting, Reagan’s ‘supply side’ economics followed by Clinton’s ‘free trade’ agreements and welfare ‘reforms,’ and the Bush tax cuts, has been a massive redistribution of wealth upward. By 2007, the richest ten percent of Americans controlled two-thirds of the country’s net worth. Income inequality reached an all-time high the same year. This devastating reality was revealed in a study by University of California economist Emmanuel Saez, which Nobel-prize winning economist Paul Krugman called “amazing.”

What is truly amazing is that it took so long, given the power and influence that accompanies wealth, and the overlap of interest among our governmental representatives. More than half in Congress are millionaires; one in five is worth over $10 million. From 2008 to 2009, while the country’s median income dropped by upwards of 3 percent, the collective personal wealth of Congress increased by 16 percent. When the bubble created by top-heavy wealth accumulation and wild deregulation finally popped in 2007-9, unemployment increased by 102 percent and Americans’ home equity declined by 35 percent, but Wall Street profits increased by 720 percent.

Given this, it is really no wonder that the billionaire Koch brothers and their political allies continue to advocate more of the same. It works, after all, for its wealthy proponents. But in terms of job creation, these policies have proven an abject failure. US businesses now sit on an estimated $3 trillion in revenue, while job growth is pitiful at best. The government at various levels has enacted all sorts of tax cuts and austerity measures in the name of spurring economic growth while cutting approximately half a million public jobs since 2008. This has resulted in further decreasing the tax base, taking more money out of circulation, and creating a ripple effect that impacts many thousands more. Furthermore, over 2 million Americans will be cut off unemployment benefits by February 2012 if Congress does not pass an extension (Wall Street Journal, 10-15-11).

From the bottom up

In the 1930s, writes UIUC History Professor Jim Barrett, “Coal miners in the anthracite region, thrown out of work and faced with a cold winter without heat, set up ‘bootleg’ mining operations, providing energy for the family and friends and marketing the pilfered coal on a small scale in Philadelphia and other cities.” Workers, “bartered their skills: An electrician turned your power back on for a basket of homegrown vegetables,” or a carpenter did repairs in exchange for a haircut. And in some cities “the Unemployed Councils of the USA … led resistance to evictions and demonstrations to demand new government policies,” (IPRH Blog, Sept. 16, 2011). The Mayor of Chicago was forced to declare a moratorium on evictions in 1931. Marchers in state capitals and Washington DC demanded unemployment insurance, “a major factor in the eventual passage of the 1935 Social Security Act.” Without the organized unemployed movement and the industrial unions, “the meager welfare measures of the depression might have been quickly dismantled,” but these movements took their cause to the streets and to the voting booths, and maintained gains for many years. Since that time, unions have been beaten down to 6.9 percent in the private sector. Public sector union membership is still over 30 percent, however, which explains why they are in the cross hairs of the Kochs and others.

In today’s crisis, the unemployed and underemployed have begun organizing again in pockets around the country. In January of 2009, Tom Lewanowski, an unemployed union electrician in Indianapolis, started organizing unemployed and anxiously employed workers, blocking a proposed shutoff of state benefits and demanding better use of federal recovery dollars. Jobs With Justice took to the streets, calling for a “Peoples Bailout.” Under intense fire, Wisconsin unions seemed to wake from a long sleep. And most recently the “Occupy” movement centered on the Wall Street has marched on banks and protested corporate power in New York, Chicago, Champaign, around the country, and around the world. Chris Hedges, senior fellow at The Nation Institute, voiced the sentiments of many in labeling this as a “movement too big to fail.” He also points out that this is just a first step. The next steps are likely to be the biggest.

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