�Why
So Glum?� Floyd Norris asked on the front page of the New York
Times. After all, he wrote, the �Numbers Point to a Recovery.�
�The American economy appears to be in a cyclical recovery that
is gaining strength. Firms have begun to hire and consumer spending
seems to be accelerating,� he said in his April 8 essay. �Why is
good news being received with such doubt? Why is �new normal� the
currently popular economic phrase, signifying that growth will be
subpar for an extended period, and that the old normal is no longer
something to be expected?
�It
is possible, of course, that I am wrong and the prevalent pessimism
is correct,� Norris continued. �Many economic indicators, including
Thursday�s retail sales report, are looking up, but that does not
prove the recovery will be self-sustaining. There are issues relating
to over-indebted consumers and local governments. The housing collapse
will have an impact for some time.�
Norris
went on to discuss �a number of reasons for the glum outlook that
are unrelated to the actual economic data.� Most of it political;
the Republicans don�t want to admit anything good has happened since
President Obama took over the Oval Office. The Democrats, on the
other hand, �would love to give the president credit� but much of
the party �wants another stimulus bill to be passed, notwithstanding
worries about budget deficits. Chances for that are not enhanced
by the perception the economy is getting better.�
Could
be. But I suspect there is another more compelling reason while
the country resists putting on a happy face. The selected statistics
don�t jibe with what we see around us.
I
say selective because the same day Norris asked his question it
was reported that the number of U.S.
workers filing new claims for jobless benefits rose 18,000 the previous
week and the figure for the week before that had been revised from
week before that to 442,000 from 439,000. Although
the number of people continuing to claim benefits for more than
a week fell by 131,000 to 4.55 million, the lowest level since December
2008, as the Times reported it, �That figure does not include
millions of people who have used up the regular 26 weeks of benefits
typically provided by states, and are receiving extended benefits
for up to 73 additional weeks, paid by the federal government.�
About
5.8 million people are now receiving extended benefits.
�Floyd
Norris urges Americans to be more optimistic about the hopes for
economic recovery, yet I am loath to follow his advice until I start
to see a recovery around me,� Julie Endrizzi of Scarborough,
Me., commented in a letter to the editor last
Saturday. �An unemployment rate of 9.7 percent means that most of
us know at least half a dozen people who have been devastated by
the recession.�
�The
figures from the Bureau of Labor Statistics and the ensuing debate
come every month, but every day I hear stories about friends and
family members who realize that they have no choice but to go on
Medicaid or move back with parents,� wrote Endrizzi. �They watch
as their chances of getting a good job fade into the distance as
the gap on their r�sum� grows. For the sake of all of these people,
we cannot look at these numbers, wipe our hands and proclaim the
job done.
I
will be optimistic when my loved ones start seeing tangible changes.�
Norris
appears to be quite right about one thing: the housing collapse
will have an impact for some time. A total of 2.8 million households
were in some stage of foreclosure last year, and the number is slated
to increase to between 3 and 3.5 million. In the last quarter of
2009 about 1.1 million homes were threatened with foreclosure, a
year later it was 1.7 million. The number is �likely to keep rising
through the middle of next year or later,� said Mark Fleming, chief
economist of the real estate research firm First American CoreLogic,
told the Times.
�We�re
going to be dealing with high levels of distressed (sales) in the
marketplace for at least a couple of years,� Fleming said. �It�s
not just all going to disappear.�
Like
the knee bone and the thigh bone, the foreclosure crisis is closely
related to the jobs crisis. Last week the Obama administration cautioned
the public not to expect any dramatic improvement in the jobless
rate, largely because thousands of formerly �discouraged� jobless
workers sense the situation is improving and have started back looking
for work. As a result, some economists have suggested, the jobless
rate may well go beyond the 9.7 percent where it stands now.
The
Economic Policy Institute says the return of the discouraged is
a hopeful sign but according the Times, �Some economists
say the jobless rate will not recede to pre-recession levels near
5 percent for four more years.�
Nothing
in these figures seems to suggest there is any real reason for optimism
concerning the rest of this year. The employment situation has been
up front in the public�s consciousness, and will remain so.
It
seems to me that there is not much public appreciation for the awfulness
of the foreclosure crisis. It�s mostly under the radar that millions
of working class people are being rendered homeless. That�s no exaggeration.
And nobody is even talking about homelessness and the continuing
rise in poverty.
Growing
numbers of adults and families who have lost houses to foreclosure
are ending up in homeless shelters. According to a report �Foreclosure
to Homelessness 2009,� compiled by the National Coalition for the
Homeless and six other advocacy groups, in the past, foreclosures
were not a significant cause of people becoming homeless. However,
over the past year, of the homeless people being served by social
service agencies, an average of 10 percent lost homes to foreclosure.
In
an April 1, 2010 report examining homelessness among elderly people,
the National Alliance to End Homelessness projects an increase in
the number of elderly people experiencing homelessness in the decades
to come. The group predicts the elderly homelessness population
will increase by 33 percent by 2020 and more than double by 2050.
A
disproportionate number of those facing foreclosure are African
American, Latino and Asian and 49 percent of the homeless are African
American.
African-American
unemployment rose to 16.5 percent last month, up from 15.8 percent
in February and 13.5 percent in March of 2009. The jobless rate
for Black men in March was 19 percent, up from 17.8 percent last
month and 16.4 percent 2009. The unemployment rate for Black women
in March was 12.4 percent. Of African-Americans 16-19 years
old, 41.1 percent are out of work as against 23.7 percent for teenagers
as a whole. Some economists are predicting an African American unemployment
rate somewhere in the neighborhood of 17.2 percent in a couple of
months.
Last
Sunday, the Associated Press reported: �The election-year
jobs agenda promised by President Barack Obama and Democrats has
stalled seven months before voters determine control of Congress.
Democrats have no money to pay for the program. That�s because both
Republicans and the Democratic chairman of the Senate Budget Committee
objected to taking money left over from the fund that bailed out
banks, automakers and insurers and using it for the jobs bill.�
The
story went on, �An $80 billion-plus Senate plan promised an infusion
of cash to build roads and schools, help local governments keep
teachers on the payroll, and provide rebates for homeowners who
make energy-saving investments. Two months after the plan was introduced,
most of those main elements remain on the Senate�s shelf.
��What�s
going ahead instead are more modest initiatives. That includes some
help for small business or simple extensions of parts from last
year�s economic stimulus measure. None is expected to make an appreciable
dent in an unemployment rate, stuck at 9.7 percent.�
�Even
legislation to help the jobless has run into trouble,� said the
story.
One
of the he most hopeful developments in the campaign for a meaning
jobs program has been the stance of labor movement � especially
the new leadership of the AFL-CIO. I was intrigued by AFL-CIO President
Richard Trumka�s recent powerful remarks to a group of liberal academics.
�Mass unemployment and growing inequality threaten our democracy,
he told the Institute of Politics
at Harvard Kennedy School.
�We need to act - and act boldly - to strike at the roots of working
people�s anger and shut down the forces of hatred and racism.� He
went on:
�We
have to begin the conversation by talking about jobs-the 11 million
missing jobs behind our unemployment rate of 9.7 percent.
�Now,
you may think to yourself, that is so retro. Jobs are so twentieth
century. Sweat is for gyms, not workplaces.
�For
a generation, our intellectual culture has suggested that in the
new global age, work is something someone else does. Someone we
never met far away in an export processing zone will make our clothes,
immigrants with no rights in our political process or workplaces
will cook our food and clean our clothes.
�And
for the lucky top 10 percent of our society, that has been the reality
of globalization-everything got cheaper and easier.
�But
for the rest of the country, economic reality has been something
entirely different. It has meant trying to hold on to a good job
in a grim game of musical chairs where every time the music stopped
there were fewer good jobs and more people trying to get and keep
one. Over the last decade, we lost more than 5 million manufacturing
jobs-a million of them professional and design jobs. We lost 20
percent of our aerospace manufacturing jobs. We�re losing high-tech
jobs-the jobs we were supposed to keep.�
�When
it comes to creating jobs, some in Washington
say: Go slow-take half steps, don�t spend real money,� said the
former Mine Workers Union president. �Those voices are harming millions
of unemployed Americans and their families - and they are jeopardizing
our economic recovery. It is responsible to have a plan for paying
for job creation over time. But it is bad economics and suicidal
politics not to aggressively address the job crisis at a time of
stubbornly high unemployment. In fact, budget deficits over the
medium and long term will be worse if we allow the economy to slide
into a long job stagnation - unemployed workers don�t pay taxes
and they don�t go shopping; businesses without customers don�t hire
workers, they don�t invest and they also don�t pay taxes.�
BlackCommentator.com 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. Click here
to contact Mr. Bloice.
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