Feb 7, 2013 - Issue 503

A Bit of Optimism in the Alps,
A Lot of Pain in the Everyday World

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One thing can be said for certain: 99.9 percent of those who gathered recently week for an Alpine sleepover either have a job or don’t need one. The same cannot be said of the billions who were not there.


While some of the world’s economic and political elite gathered in Davos, Switzerland for the annual World Economic Forum, a United Nations agency reported that there has been an increase in unemployment planet-wide of 28 million since the onset of the current economic crisis five years ago. One million jobs were lost in western capitalist economies last year alone and three million in the rest of the world. And it’s getting worse. A total of 202 million people could be unemployed across the globe sometime this year, the International Labour Organization (ILO) said January 29.


Dominic Rushe of the British newspaper Guardian described the findings in the annual ILO Global Employment Trends thusly:


“… 6 percent of the world’s workforce were without a job in 2012. The number of jobless people around the world rose by 4 million in 2012 to 197million. Young people were the worst affected: nearly 13 percent of those under 24 were unemployed. Some 35 percent of all young unemployed people have been out of work for six months or longer in advanced economies, up from 28.5 percent in 2007.”


The situation in some major European countries is particularly dire.


Take Spain for instance. That country’s unemployment rate reached 26.02 percent in the fourth quarter of 2012, leaving almost six million people out of work - 60 percent of young people between 18 and 25 years old. The government says nearly 700,000 more people lost their jobs last year and there are now 1.8 million households in which no one is working.


In the 27-member European Union as a whole, the jobless rate stands at 10.7 percent, with 26 million people unable to find a job.


Since Davos, there has been running commentary assessing whether attendees from 100 countries and up to 50 heads of state and corporate executives attending the Forum came away optimistic or pessimistic about the economic state of the world. “As more than 2,500 global movers and shakers headed home Sunday, there was broad agreement that things are beginning to look up on the economic front - at least in China, Africa, and emerging markets, but not in Japan, Europe, and the United States,” observed the Associated Press.


“The balance between optimism and pessimism is also always affected by personal circumstances, as much as rational analysis,” wrote Gideon Rachman in the Financial Times January 22. “So the mood f Davos man will be lifted by the fact that the last year has seen a bull run for stocks. This month the S&P 500 hit a five-year high, and the FTSE All-World index is at its highest level for 18 months. Even the bankers are liable to arrive in Davos with some of their old swagger restored. After all, there have been no major scandals, collapses or arrests for months.”


In other words, how you see the economic situation depends a lot on whether you are a CEO, banker or well-paid government official on one hand or a jobless worker or someone who could easily become unable to earn a living on the other.


And that’s as true in the U.S. as anywhere else in the world.


AP said there was “broad agreement” at Davos “that things are beginning to look up on the economic front - at least in China, Africa, and emerging markets, but not in Japan, Europe, and the United States.”


Although economy the U.S. economy added 157,000 new jobs last month, the unemployment rate rose from 7.8 in December to a staggering 7.9 percent in January. That number is less than the 196,000 jobs added in December. Over the month, the ranks of the unemployed rose from 12.2 million in December to 12.3 million in January. African American joblessness slipped from 14 percent to 13.8 percent over the month and the rate for Latinos rose from 9.6 percent to 9.7 percent. About to 20 million people are said to be unemployed or underemployed in the country at the moment.


While the Associated Press headlined, “Stocks rise on strong jobs numbers,” the New York Times observed that “hiring growth has been uninspiring in the last year, trudging along just barely fast enough to keep up with population growth but not nearly quickly enough to put a major dent in unemployment. A backlog of 12.3 million idle workers remains. The average worker who is unemployed has been pounding the pavement for 35 weeks” and “Millions have exhausted their unemployment benefits, and many more will roll off the government’s system in the coming months with no options in sight.”


While those in charge of this clearly can’t agree on what should be done about the situation on the jobs front, those gathered at Davos appear to have taken note of the fact that, at least in Europe and the U.S., government policies are pushing things in the wrong direction and if some powerful forces have their way, austerity measures will be rolled out that will make things a whole lot worse.


“Three years ago, a terrible thing happened to economic policy, both here and in Europe,” economist Paul Krugman wrote in the Times last week. “Although the worst of the financial crisis was over, economies on both sides of the Atlantic remained deeply depressed, with very high unemployment. Yet the Western world’s policy elite somehow decided en masse that unemployment was no longer a crucial concern, and that reducing budget deficits should be the overriding priority.” That view is shared by economist Robert Reich who observes that “The unfortunate reality is that on both sides of the ocean we have people making economic policy who are largely sputtering nonsense about how to remedy the economy. And for the foreseeable future they will have the political power to keep their jobs no matter how disastrous the outcomes of their policy might be.”


As strange as it may seem, the problem of so many people out of work for long periods of time has yet to find a credible place on the nation’s policy agenda. It hardly rates a mention in the policy priorities emanating these days from either Congress or the executive branch.


Reich says the U.S. government is “following Europe’s sorry example of failed austerity economics.”


“At a point where the US could be experiencing catch-up growth to make up for the output lost since 2007, Washington is importing European austerity,” wrote Edward Luce, Washington bureau chief of the Financial Times, adding that “There is nothing about the anemic US recovery that merits austerity at this point.”


On January 31, President Obama killed off his high level President’s Council on Jobs and Competitiveness that he formed two years ago in what was said to be an effort to enlist outside expertise on dealing with joblessness. While the announcement was awaited over whether the 26-member panel’s mandate would be renewed, Erika Eichelberger wrote in Mother Jones magazine that it had “failed to accomplish much over its two-year life span, and a lot of what it did turn out was more friendly to business than to regular people.” A spokesperson for the Council’s chair General Electric CEO Jeffrey Immelt told her the panel, which included the chiefs of the heads of AOL, Intel, Xerox, Boeing, Comcast, and Intel, and other corporate giants had come up with 60 recommendations for executive action and that “significant progress” has been made on 54 of those. However, AFL-CIO president Richard Trumka, one of the two labor leaders on the Council, told Eichelberger: “By reducing overall revenues these reforms could easily have the opposite [of the intended] effect… starving the government of the revenue it needs to create good jobs and upgrade our infrastructure and education systems, thereby making the United States a less attractive place to invest.”


Last January, the Council issued a report which Trumka voted against saying, “It is clear from our work in all of these areas that without timely action by government on a large scale, solutions will continue to elude us as a nation. Unfortunately, I believe the report downplays the need for a proactive role for the U.S. government in many of these areas; fails to address the significant additional revenues needed to address the challenges identified on an appropriate scale; and in many cases erroneously identifies the root causes of the underlying structural problems.”


The President last met with the Council in February 2012.


On March 2011, in his last column for the New York Times, Bob Herbert took note of the corporate influence on the new jobs panel and commented, “Overwhelming imbalances in wealth and income inevitably result in enormous imbalances of political power. So the corporations and the very wealthy continue to do well. The employment crisis never gets addressed. The wars never end. And nation-building never gets a foothold here at home.”


Some observers had expected the job creation panel, which hadn’t met for a year, would nonetheless be reauthorized if only because not doing so would be a bad idea from a public relations standpoint. As it turned out, the Council’s demise went relatively unnoticed.


According to the Washington Post, “Officials said the president always intended for the council to fulfill its mission and then wind down, and said Obama would continue to actively engage and seek input from business leaders about ways to accelerate job-creation and economic growth. Among the steps Obama plans to pursue are expedited permits for infrastructure projects, plus programs to boost entrepreneurship and workforce development.”


Simply put: that’s not enough.


Behind the statistics and projections being circulated and discussed are real people, men and women who lives and welfare remain precarious. They are paying heavily for the economic policies being hashed in the capitals of the capitalist world and will continue to do so as long as economic health is measured in terms of products and profits. The aim of social policy should be to ensure that everyone who seeks employment should have access to a means to earn a living wage. That means creating jobs. That means now, not somewhere down the line after “the market” has done it dubious magic. It’s been done before and it can be dome again. But it takes political will.


Guy Ryder, director general of the ILO and a former general secretary of the International Trade Union Confederation, recently called the unemployment crisis “a massive waste of the lives of young people and their talents and extraordinarily damaging to the people themselves and their societies” and a threat to social stability.

BlackCommentator.com Editorial Board member and Columnist 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.