As union delegates from around the country prepare to head to the AFL-CIO’s 2009 convention in Pittsburgh Sept. 13, they bring a determination to fight for an economy that works for the great majority of Americans.

The challenge they face was underscored this week, as the country’s leading labor-backed think tank, the Economic Policy Institute, warned that although the Great Recession of 2007 may finally be bottoming out, for workers there is still a long way to go.

In a new report, “The State of Working America 2008-2009, and in a Sept. 2 telephone interview, co-authors Heidi Shierholz and Lawrence Mishel described the huge dimensions of the crash caused by former President George W. Bush and his corporate backers. “The disaster would have been even worse without the stimulus law President Obama pushed through earlier this year,” Shierholz said.

“Job losses would have been so high that the July unemployment figures would have been 9.6 percent or 9.7 percent, not 9.4 percent,” she said.

Nevertheless, she warned, “we expect a steady climb in the unemployment rate up and over 10 percent by the end of the year. And it’ll rise slightly above that figure for a few months in 2010 before turning downwards.”

“So, we still have a long way to go,” she said. “Until the economy is adding 122,000 jobs a month to take care of the people coming into the job market, unemployment will stay high.” In July, the economy lost 247,000 jobs.

The two economists drew attention to the human consequences.

“All this is more than just a bunch of dry numbers,” Mishel declared. “One-third of the jobless, a record, have been out of work at least six months, and many have exhausted their unemployment benefits. That translates into bankruptcies, lost homes, no medical care and more ills afflicting workers – even employed workers.”

“This recession is much more than just the numbers of unemployed and underemployed,” which is also setting a record,” he said. “Employed workers are seeing their hours cut, there’s an implosion in wage growth and about 17 percent of large private employers have resorted to unpaid furloughs to save money.” Mishel noted that a one-week furlough is equivalent to a 2 percent pay cut for a worker and his or her family.

The two economists were critical of the way the major media are covering the economic crisis, and they urged workers not to fall for the idea that everything will automatically get better when productivity rises.

Their report notes: “In the popular media, economic experts endlessly debate dynamics and causes of the downturn but most of these debates have very little to do with the real economic challenges facing working families today.

“The men and women of the workforce have worked harder and smarter to make the U.S. a world-class economy and the mantra among economists and policy makers is that ‘as grows productivity, so shall living standards improve.’ Would that it were so.”

Even before the Bush crash, the report says, workers faced “rising inequality and lower real incomes for all but the richest 5 percent, diminished bargaining power, less health coverage, riskier pensions if any at all, income constraints that prevent workers’ kids from getting college educations to better themselves, and fewer high-paying jobs for those college grads, due to offshoring and outsoucing.”

The report dubs it “YOYO [“You’re on your own”] economics.”

“We are in a unique position to judge the results of this experiment in reduced worker bargaining power and YOYO economics,” the two economists write. “The macro-economy is in serious disrepair and policymakers must move beyond temporary patches to fundamentally remake the economy so that it works for workers.”

The EPI economists credit the Obama administration for its moves to correct economic imbalances. The $787 billion stimulus package, the “cash for clunkers” program, initiatives to help the Detroit auto industry and the $500 million “green jobs” initiative have “partially stanched the bleeding,” the report says.

Mishel predicted that, in line with these moves, Congress would pass a second extension of unemployment benefits.

The two economists argue in their report, however, that the economy needs a fundamental restructuring away from the “free market” policies that allow corporations and financiers free reign while the great majority have to tighten their belts.

jwojcik @




John Wojcik
John Wojcik

John Wojcik is Editor-in-Chief of People's World. He joined the staff as Labor Editor in May 2007 after working as a union meat cutter in northern New Jersey. There, he served as a shop steward and a member of a UFCW contract negotiating committee. In the 1970s and '80s, he was a political action reporter for the Daily World, this newspaper's predecessor, and was active in electoral politics in Brooklyn, New York.