Jobless Recovery No Cause for Cheer
Â Rare champagne is bubbling on Wall Street. The Dow Jones hits 10,000. Federal Reserve Chair Ben Bernanke says the recession is over. Let the good times roll.
Only, don't look at the world around us. The real economy--not the casino on Wall Street--is still mired in recession. Some 15 million are jobless, and the layoffs keep coming. Two-thirds of the jobless, the highest proportion since we began keeping records, have been out of work for at least six months. Those who have jobs are forced to work shorter hours--down to an average work week of 33 hours, lowest in 60 years. Incomes are down; health care benefits are getting cut; retirement plans are shattered. One in nine Americans now relies on food stamps.
And these are national figures, but the pain isn't shared equally. One in four teenagers is without work. Manufacturing workers have been losing jobs for more than a decade. Double these numbers and you get close to the pain among African Americans.
Our official unemployment rate is headed toward 10 percent, but that's misleading. The rate doesn't include those who are underemployed--forced into part-time or intermittent work against their will. It doesn't include the discouraged who have stopped looking for work. It doesn't include the 2 million who have entered the work force since the downturn began and never found jobs. It doesn't include the millions of undocumented workers who have lost their jobs but were never on the books. We've lost jobs for 21 straight months, and it is getting worse.
Where will the jobs come from? Consumers, having lost trillions in the values of their homes and savings, are tightening their belts. Businesses are cutting back and finding it hard to get credit if they want to expand. State and local governments are laying off teachers and police.
In Washington, a new administration and a Democratic Congress still are shackled by conservative ideas. Republicans voted en masse against the stimulus package, and now are gearing up their noise machine to proclaim it a failure. Conservatives in both parties rail about the record deficits, ignoring the reality that the deficits will stay high if people don't go back to work. Ironically, the deficits haven't caused rising interest rates--so the fears are all about what might happen, not about the catastrophe that we face right now.
Long-term entrenched unemployment is a social and human catastrophe, destroying families, crippling children, threatening boomers as they look toward retirement, undermining the skilled workers needed for a successful economy.
It is time to act boldly. The Federal Reserve has done what it can, holding interest rates near zero. President Obama's stimulus plan helped to save the economy from complete implosion and will create more jobs over next year, but it is not enough.
We need a bold federal jobs program--and one that lasts more than a year. Create jobs for the young, so their lives are not lost to despair, drugs and crime. Mobilize an urban corps to clean up our cities, a green corps to weatherize homes and apartment buildings, a wilderness corps to revive our national parks and plant trees across the country. Employ construction workers by building scattered site public housing across urban and suburban neighborhoods. Provide assistance to states and localities so that they aren't laying off teachers and police and making the recession worse.
For those worried about deficits, pass a tax hike right now on the wealthiest Americans and a transactions tax to limit speculation to pay for all this--and have it kick in two years from now if people are back to work, and the economy has found its feet.
This will rouse a din from those worried about future inflation, or the future erosion of America's ability to borrow. But it is folly to accept a right-now human catastrophe because of fears of potential side effects in the future. The first priority is to put people to work. Then deal with the fallout. Don't duck doing the right thing because it might cause difficulties in the future.