“The day after President George W. Bush announced the U.S. economy was ‘looking up’ and proposed making most of his millionaire tax cuts permanent, the federal Bureau of Labor Statistics (BLS) confirmed that working families are enduring the worst job loss crisis since the Great Depression.”
So begins an AFL-CIO statement in response to the Sept. 5 BLS report that 93,000 non-farm workers lost their jobs in August. The report was bad news indeed for U.S. workers, and part of a worsening picture. Approximately 3.2 million jobs have been lost since Bush took office.
According to Bush’s vaunted “jobs and growth” plan, last month should have shown a net gain of 344,000 jobs. The BLS report instead puts Bush’s plan in the hole for 437,000 jobs. And things could get much worse.
Workers in manufacturing were particularly hard-hit. About 44,000 manufacturing jobs were lost last month, making it the 37th straight month of losses in this key sector of the economy. Apparel and textile workers sustained the heaviest losses. Workers in services, the information sector, telecommunications, and transportation also took it in the chin.
Unemployment among state and city workers also increased, reflecting the many layoffs associated with the fiscal crisis besetting local governments.
The jobless rates among African Americans and Latinos were particularly high, reflecting institutionalized racism in the U.S. economy.
The extent of the job slump is obscured by the BLS report’s claim that the unemployment rate declined slightly from July, from 6.2 percent to 6.1 percent. This figure masks, however, the sharp increase in the number of discouraged workers – workers who have given up hope of finding a job. In August this figure topped the 500,000 mark, about double the number of discouraged workers just three years ago. Only people who are actively seeking employment are counted as unemployed; “discouraged” workers are not counted.
The BLS report took many big-business economists by surprise. Extremely low interest rates, big rebates on vehicles, a mortgage refinancing boom, a huge surge in military spending, and Bush’s tax cuts to the rich were regarded as “economic stimuli” that would cause an uptick in employment. Not so. In fact, the August job loss was more than twice as bad as July’s loss of 44,000 jobs.
“We have been sitting on the bench waiting and waiting and waiting for some jobs to appear, and they are still nowhere in sight,” writes Joel L. Naroff, an economic forecaster.
The prospects aren’t very good, thanks to three continuing trends: U.S. companies relocating to low-wage areas overseas, relentless speed-up, and employer use of labor-saving technology. A recent report by the Federal Reserve Bank of New York says that, as a result, many of the recent job losses will be permanent.
Economists widely agree that U.S. economic activity, such as it is, has been sustained by consumer spending. But workers can only borrow so much.
“This year, the months to still to come could be the bleakest for U.S. workers,” the AFL-CIO statement says. “The nationally respected outplacement firm Challenger, Gray & Christmas Inc. predicted that, based on recent job trends, U.S. employers would announce an additional 399,000 new job cuts during the final four months of 2003.”
Unemployment affects workers who do have a job, too, by acting as a drag on their efforts to win wage gains. Wages have remained stagnant or have declined for most workers since 2001.
Many labor economists have advocated a domestic public works program that would increase spending on the nation’s crumbling infrastructure, schools, and health care system. Such a program would employ hundreds of thousands. Funding could come from closing corporate tax loopholes, sharply increasing taxes on the rich, and slashing the military budget.
In the meantime, working people’s anger is clearly rising. Zogby International, in a poll conducted Sept. 3-5, found that only 40 percent of respondents believed Bush deserves a second term, with 52 percent responding “it is time for someone new.”
The author can be reached at malmberg@pww.org
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