What is the real economic crisis facing the American people?
Mass unemployment and growing impoverishment are a national emergency.
What are some of the indicators of growing unemployment and poverty?
The unemployment rate has been over 9% since spring 2009. Underemployment – people working part time who want full time jobs – has remained over 5%, while discouraged workers who want work but have given up looking are another 3-4% of the labor force More than 40% of all American families have been directly affected by unemployment in the last 12 months. At least 15 million children now live in poverty. Real family median income was $5000 less in 2009 than in 2000.
Are some groups especially hurt by mass unemployment and impoverishment?
The worst hit are African-Americans, whose unemployment rate has been over 14% since spring of 2009, Hispanics at over 11%, youth, and blue collar workers. Construction workers accounted for one-quarter of job losses during the initial economic collapse. Now extended joblessness hits all education levels. When the housing and financial bubbles collapsed, the worst consequences fell on African-Americans and Hispanic families, whose net worth declined by more than 50% between 2005 – 2009.
Why is this happening?
The income share of the top 1% of households has tripled since 1975. With the massive tax cuts of the Bush era, these dramatically richer super-wealthy have engaged in lavish consumption and financial speculation but failed to create jobs in the USA. Corporations used their higher profits to move jobs to lower-wage countries and pay bonuses to executives, while cutting payrolls. The bank bailout went to executive bonuses, not to ordinary salaries.
The power of private-sector labor unions has declined, while new attacks on public employee unions threaten to eliminate their bargaining power as well. No one is left to stand up for working people.
What are the effects on the general economy?
Corporations do not reinvest their high profits in productive enterprise, since people cannot buy their products. The windfall income and wealth gains for the top 1% do not compensate for the loss of purchasing power for the bottom 80% of society. In this sense the successful class warfare of the upper class against the working and middle classes is leading to a paradoxical result – a continuing recession and the threat of a deeper depression that could “sink all boats,” including the yachts of the capitalist class.
Who supports serious job creation programs in Congress?
The Congressional Progressive Caucus, with the support of nearly half of the House Democrats, as well as a few Senators, has prioritized a “big, bold jobs plan”. The initiatives focus on rebuilding the economy with emergency jobs legislation while beginning to implement longer-term job creation strategies.
What legislation is being proposed?
The Humphrey-Hawkins 21st Century Full Employment and Training Act, introduced by Rep. Conyers, would create a national Full Employment Trust Fund to put the long-term unemployed and Americans living in our hardest-hit communities to work rebuilding our infrastructure, weatherizing homes, fixing our schools, tutoring our children, and expanding high speed broadband access in urban and rural communities.
Rep. Schakowsky’s Emergency Jobs to Restore the American Dream Act would provide $227 billion over two years to directly increase employment by 2.2 million jobs for teachers, police and firefighters, child care workers, and youth in community service programs.
Rep. Barbara Lee’s Emergency Unemployment Compensation Expansion Act would extend unemployment compensation for an additional 14 weeks.
Isn't this what President Obama is suggesting?
Obama has proposed creating jobs, but it’s not enough. Much of his bill goes to business incentives rather than straight to job creation. And much of it just replaces expiring parts of the stimulus, keeping existing jobs in place but not adding new ones.
How Can We Pay for Creating Jobs?
Today the federal government can borrow at extremely low interest rates. A small tax on the trading of financial assets by banks, hedge funds, and other financial institutions could raise several hundred billion dollars over the next decade. Directly employing millions in jobs needed to provide adequate educational and health services, while promoting manufacturing for mass transit and green technologies in the USA eases unemployment, creating greater consumer demand that would encourage the private sector to hire and restart economic growth. We need to restore progressive taxation on wealthy individuals and corporations and end military waste.
What is to be done?
All of these constructive proposals will encounter the obstacles posed by the Budget Control Act and the so-called Super-Committee. Congress can get past these excuses for inaction either by expanding the mandate of the Super-Committee to prioritize job creation or by exempting job creation measures from the limits of the Budget Control Act. It will require demonstrations, organizing of the unemployed, and intensive political agitation to compel more than token measures and to make real the goal of decent jobs for all.