Government investment in green technology and infrastructure is needed to create thousands of jobs and prevent a recession. Working with unions and employers, the government has put in place the Job Retention Scheme and self-employed income support schemes, protecting the jobs and incomes of millions of workers during the coronavirus crisis. But more is needed, and fast. Without further bold action from the government, we risk huge losses of jobs and livelihoods and possibly the deepest recession since the 1930s. The OECD estimates that unemployment could hit 11 per cent this year. But this is not inevitable, and action taken now can prevent the despair of mass unemployment.
Jobs and Wages
On this May Day, the world is witnessing three pandemics simultaneously. The first is the Coronavirus Pandemic. The second is the Hunger Pandemic. The third is the Pandemic of Destruction of Livelihoods. Thus far, he coronavirus pandemic has infected 3.19 million and killed 228,000. The World Food Programme has warned the world community of the looming “hunger pandemic,” which has the potential to engulf over a quarter of a billion people whose lives and livelihoods will be plunged into immediate danger. According to the world food program more than a million people who are on the verge of starvation, and 300,000 could starve to death every single day for the next three months.
Economists surveyed by Bankrate estimated a 35% chance of recession by the November election. Red lights of a laggard or even a bad year were blinking: Businesses were not investing in the future — private investment growth had plunged to 1.8% from 5.1% in 2018. Even consumer spending, the singular engine of growth, was just 1.8% in the fourth quarter, down from 3.2% in the prior three-month period. But left barely spoken is the explicit economic threat: a depression-like downturn rivaling the 1930s — prolonged double-digit joblessness, an unprecedented economic contraction, and widespread bankruptcy.
Even as the U.S. economy hums along at a favorable pace, there is a vast segment of workers today earning wages low enough to leave their livelihood and families extremely vulnerable. That’s one of the main takeaways from our new analysis, in which we found that 53 million Americans between the ages of 18 to 64—accounting for 44% of all workers—qualify as “low-wage.” Their median hourly wages are $10.22, and median annual earnings are about $18,000.
A Brookings Institution study shows 44 percent of all American workers toil in “low-wage” jobs, with median earnings of $18,000 a year. Most of them are adults in their prime working years, whose paychecks provide the main sustenance for their families, 20 percent of which live at below 150 percent of the poverty line. Blacks and Latinos are overrepresented in low-paid employment, but more than half of these bad jobs are held by whites.
For more than five weeks now, coal miners in Harlan County, Kentucky have been camped out on railroad tracks, blocking a train loaded with coal, to demand that their bankrupt employer pay them their owed wages. Their story highlights the rampant nature of wage theft and the need to address it, along with retaliation, or the fear of retaliation, that keep millions of other workers silent. Wage theft refers to the countless ways in which employers fail to comply with workers’ most basic pay protections. It includes, for example, an employer’s failure to pay the minimum wage or overtime, an employer’s refusal to pay a worker for all hours worked, asking workers to work off the clock, employee misclassification, illegal deductions, and stealing tips.
The real unemployment rate is probably somewhere between 10%-12%. Here’s why: the 3.7% is the U-3 rate, per thelabor dept. But that’s the rate only for full time employed. What the labor dept. calls the U-6 includes what it calls discouraged workers (those who haven’t looked for work in the past 4 weeks). Then there’s what’s called the ‘missing labor force’–ie. those who haven’t looked in the past year. They’re not calculated in the 3.7% U-3 unemployment rate number either. Why? Because you have to be ‘out of work and actively looking for work’ to be counted as unemployed and therefore part of the 3.7% rate.
What’s the condition of the US working class on this Labor Day 2019? Wages and Jobs are of course the best indicators of that condition. So let’s look at wages and jobs today in America. What we see is that—contrary to Trump, US government, and mainstream media hype and reporting—a growing number of independent surveys show that wages have not been rising as they claim. And 500,000 fewer jobs were actually created last year than initially reported.
Americans are not happy, and for good reason: They continue to suffer financial stress caused by decades of flat income. And every time they make the slightest peep of complaint about a system rigged against them, the rich and powerful tell them to shut up because it is all their fault. One percenters instruct them to work harder, pull themselves up by their bootstraps and stop bellyaching. Just get a second college degree, a second skill, a second job. Just send the spouse to work, downsize, take a staycation instead of a real vacation. Or don’t take one at all, just work harder and longer and better. The barrage of blaming has resulted in workers believing they deserve censure. And that’s a big part of the reason they’re unhappy.
In a new report, "Dreams Deferred: How Enriching the 1% Widens the Racial Wealth Divide," researchers at the Institute for Policy Studies outline how the racial wealth gap has widened over the past thirty years and how this fits the long term pattern of systemic racism. We speak with one of the authors, Sabrina Terry, about the findings in the report and recommendations for closing the wealth divide. We report live from Caracas, Venezuela where the United States is continuing its aggressive efforts at regime change.
By and large, American workers haven’t been getting the kind of pay raises that history predicts for an economy with such a low unemployment rate. That’s even more astounding when you remember 2017’s $1.5 trillion tax cut that was heavily weighted toward large corporations, with the promise that — this time, we swear — a lot of those dollars would trickle down to the rank-and-file worker. Now, the post-tax-cut numbers are coming in, and you’ll be shocked, shocked to learn that America didn’t get that pay raise after all. In a widely read column last week for Bloomberg, Noah Smith pointed to statistics from PayScale showing that so-called real wages — your paycheck, but adjusted for inflation — actually fell in the just-ended second quarter of 2018, by 1.8 percent.
By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals how the boom continues in large part by the poorer half of Americans fleecing their savings and piling up debt.