Why aren’t we hearing more about the worst job and wage situation since the Great Depression?
The latest employment figures (released this morning) show job losses continuing to grow. According to the payroll survey, job losses are increasing more slowly than in previous months. According to the household survey, they’re accelerating — from 9.4 percent of the workforce in July to 9.7 percent in August. Bottom line: almost one out of six Americans who need a full-time job either can’t find one or is working part-time. Meanwhile, wage growth among people who have jobs has just about stopped. The Economic Policy Institute reports that between 2006 and 2008, wages grew at an annualized rate of 4.0%; by contrast, over the past three months annual wage growth has plummeted to just 0.7%. At the same time, furloughs — requiring workers to take unpaid vacations — are on the rise: recent surveys show 17% of companies imposing them. More than 20% of companies have suspended their contributions to 401(k)s and similar pension plans.
So why isn’t the media screaming? Partly because these job and wage losses are not, for the most part, falling on the segment of our population most visible to the media. They’re falling overwhelmingly on the middle class and the poor. Unemployment among those who have been in the top 10 percent of earnings is closer to 5 percent, and their earnings continue to climb — although, to be sure, much more slowly than before the meltdown. It’s much the same with health-care and pension benefits. Among people under 65 who are in the bottom 20% of incomes, only 21.9% have employer-sponsored health insurance — if they have a job at all. Half of all people nearing retirement age have a 401(k) balance of less than $40,000.
I keep hearing that the economic meltdown has taken a huge toll on the stock portfolios of the rich. That’s true. But the rich haven’t lost nearly as much of their assets, proportionately, as everyone else. According to a report from the Bank of America Merrill Lynch (“The Myth of the Overleveraged Consumer”), analyzing data from the Federal Reserve, the bottom 90 percent of Americans hold 50 percent of more of their assets in residential real estate, which has taken a far bigger beating than stocks and bonds. The top 10 percent of Americans have only a quarter of their assets in housing; most of their assets are in stocks and bonds. And although the stock market is still a bit tipsy, it has rallied considerably since it hit bottom earlier this year. Home values, on the other hand, are down by an average of a third across the country, and are still falling.
What does all this mean for the economy as a whole? It raises the fundamental question of where demand will come from to get us out of this hole. If so manyAmericans are losing their jobs and wages, you have to wonder who will be returning to the malls.
That same Bank of America Merrill Lynch (NYSE:BAC) report notes cheerfully that 42 percent of consumer spending before the meltdown came from the top-earning 10 percent of Americans (not too surprising given that the top 10 percent was raking in half of total earnings) and the top 10 percent continues to do relatively well. So, says Bank of America Merrill, we can rely on the spending of the top 10 percent to get the economy moving again. Indeed, they conclude, Congress and the White House should be careful not to raise taxes on the top 10 percent, lest the consuming ardor of these most privileged members of our society be dampened.
This logic is morally and economically indefensible. If we’ve learned anything from the Great Recession-Mini Depression of the last 18 months, it’s that the skewing of income and wealth to the top has made our economy far less stable. When the majority of middle-class and poor Americans are either losing their jobs or feel threatened by job loss, and when those who still have jobs are experiencing flat or declining wages, there’s simply no way to get the economy back on track. The track we were on — featuring stagnant median wages, widening inequality, and job insecurity — got us into this mess in the first place.
John Steinbeck says the following in the remaining few pages of the Grapes of Wrath, Chapter 29:
-No work till spring. No work.
-And if no work–no money, no food.
-Fella had a team of horses, had to use ’em to plow an’ cultivate an’ mow, wouldn’t think a turnin’ ’em out to starve when they wasn’t workin’.
-Them’s horses–we’re men.
The women watched the men, watched to see whether the break had come at last. The women stood silently and watched. And where a number of men gathered together, the fear went from their faces, and anger took its place. And the women sighed with relief, for they knew it was all right–the break had not come; and the break would never come as long as fear could turn to wrath.
there’s a reason for martial music
I am THROUGH donating to food banks and shelters, that is “enabling” TPTB. Why should I “run interference” for those who caused this mess? The POLITICIANS “Friends and Family” have made FORTUNES off this corruption/war/fiasco, let THEM donate. Otherwise, let the people get hungry, MAD and Hungry. Only take care of your own.
Does this seem cruel? Listen carefully, those who got rich creating this Depression, are getting RICHER now. Why? Because THEY are buying stocks, property, at BARGAIN prices. Meanwhile THEY tell YOU to provide a “safety net” to mitigate the anger that should be poured out on THEM. YOU are supposed to feed the Hungry THEY created. THEY are using THEIR money to further enrich THEMSELVES, while YOU use YOUR money to fix THEIR mess, and feed the hungry THEY caused.
The truth is that we are witnessing a nation whose policy is being run so special interests can profit at unprecedented levels while the standard of living of the populace inevitably declines to accommodate the transfer of wealth. It is completely deliberate, and not a bit of it is accidental. The smartest guys in the financial world didn’t all just get stupid and blow it – that’s a facile cover story being propagated by the captured press. They knew exactly what they were doing, they crashed the system to profit at levels it would normally take 50 years of stability to see, and they could give a rat’s ass whether you work at Burger King during your retirement as a result.