Unemployment nearing Great Depression levels for African Americans and Latinos

Below are the findings of a new report compiled by the Economic Policy Institute of the impact of the recession on 50 major U.S. cities:


* In 2009, the national annual unemployment rate was 9.3%. Five of the 50 largest metropolitan areas had unemployment rates over 11.3%—2 percentage points above the national rate—while seven experienced rates that were less than 7.3%—2 percentage points below the national rate.
* Only one metro area had a white unemployment rate above 11.3% (Detroit, 13.8%). Nine metro areas had a Hispanic unemployment rate above 11.3%, and 14 had a black unemployment rate above that level.
* No metropolitan area had a black unemployment rate below 7.3%, and only two areas had Hispanic unemployment rates below 7.3%. Nearly half of the areas—24—had white unemployment rates below that level.
* In all but two metropolitan areas, the white unemployment rate was lower than the overall rate. For the 50 largest metropolitan areas, the average white unemployment rate is 0.8 times the overall rate.
* The Hispanic-white unemployment ratio was highest in Providence, R.I. In Providence the Hispanic unemployment rate was double the white rate, and the gap was 11.3 percentage points.
* The black-white unemployment ratio was highest in Minneapolis and Memphis. In these metropolitan areas, the black unemployment rate was three times the white rate.
* In many instances, disparities are visible in unemployment rates even when we compare racial subgroups with the same level of education. We need to ensure that nonwhites have equal employment opportunities in the labor market.

Recovery for whom?

by Joel Wendland

This economist is predicting the end of the recession by the end of this year by with 11 percent unemployment. Why is it that unemployment rates are the last thing on anyone's mind when it comes to economic issues? How could he say there is a recovery with such high unemployment? Even with the end of an official recession, a second stimulus will be needed to make the economy come back and to protect working Americans from this "recovery."

From CNBC:

Nouriel Roubini, the economist whose dire forecasts earned him the nickname "Doctor Doom", told CNBC Monday that the economic recovery is going to be "very ugly."

Nouriel Roubini
cnbc.com

"The recovery is going to be subpar," Roubini said. "I see a one percent growth in the economy in the next few years. There will also be 11 percent unemployment next year and the recovery is going to be slow. It's going to feel like a recession even when it ends."

Asked about his comments in a speech last week about the recession ending in 2009, Roubini said, "I've been saying all along the recession is going to last 24 months. It started in December of 2007 and my view is that it won't be over until December of this year."

Read more and watch the video...

Light at the End of the Unemployment Line? (May 28th)

Light at the End of the Unemployment Line?
PoliticalAffairs.net

March 27th marked the 100th day since the passage of President Obama's economic recovery act. To observe the occasion, the administration released a report on the progress of the stimulus package and the economic recovery since.

The report provided anecdotal evidence of the impact the recovery act has had in different parts of the country. So far $112 billion from the recovery act have been obligated for various projects like infrastructure construction to job training, environmental clean-up, small business loans, expanded unemployment benefits, public education, science research grants, public safety, and green technology.

At the release of the report, Vice President Joe Biden said, "We’ve done a lot in 100 days. But we know there is still much to do... You know, as we do, that the road to full recovery will be long and not always smooth. But we also know that, working together, there is no doubt that we will reach the end of that road. When we do, America will be better and stronger than ever."

Rob Nabors, deputy director of the Office of Management and Budget, explained to reporters, "We have a long way to go, but today we have more hope for an economic turnaround than we did 101 days ago."

"We are starting to turn a corner," Nabors added.

Read the whole story here...

Auto crisis: Which states are most threatened by industry collapse?

According to all available data, more than 3 million workers are tied directly to or are dependent on a thriving auto industry for work.

If the auto industry collapsed, workers in all 50 states in a wide variety of manufacturing and service industries would lose work and possibly lose their jobs.

But according to new analysis at the Economic Policy Institute, the six states most harmed by an auto industry collapse include Michigan, Ohio, Indiana, Kentucky, Tennessee, and Alabama.

The loss of auto jobs would grow those states' unemployment rates by 4 to almost 9 percent, EPI reports.

EPI estimates that the crisis would lead to a quick loss in revenues to states by about $150 billion.

Other states that would face severe crisis in these events would include South Carolina, North Carolina, Wisconsin, Illinois, Mississippi, Oregon, Missouri, Nebraska, and many more, with these states seeing unemployment jump by 2.3% to 3.9%.

See more detail here.

Official Unemployment Reaches 6.7%

by Norman Markowitz

Official government statistics announced today that unemployment had reached 6.7%, far exceeding "official" forecasts. I say official because serious progressive economists and labor sociologists have long contended that the "official statistics" seriously and deliberately undercount unemployment numbers. This was in effect alluded to by the press reports, which mentioned that "a mass departure from the work force helped to hold down the unemployment rate...." The government in the Clinton administration in response to longterm criticisms from labor and progressive academics began to compile an "underemployment rate" which includes part time workers seeking full time jobs and those who have "officially" been dropped out of the statistics because they are longterm unemployed.

The press rarely reports the underemployment rate but did this time. It jumped from 8% to 12.5% the largest it has been since the BLS began to calculate it. If the underemployment rate is a more serious calculation of the employment crisis and its likely trajectory as I think it is, we are in the very early stages of a depression, not simply the "longest recession" since the 1930s, which the Bush administration is now admitting even though it denied through the election that the U.S. was by "official' statistics in a recession until very recently.

By the way these statements are also being made by establishment business analysts who are predicting massive layoffs particularly if the auto industry collapses (the auto industry is more than simply jobs for auto workers but connects to jobs for a wide variety of connected businesses).

Spokesmen for finance capital(meaning here Wall Street and big bank analysts) are deeply "pessimistic" predicting significant decline in GDP and significantly higher "official" unemployment statistics for 2009. They have no solution, except to say that there aren't any "quick fixes" or likely "quick rebounds" in the near future.

Essentially what they are saying is what Andrew Mellon said to Herbert Hoover in the early stages of the Great Depression, that is, let the crisis run its course, with one important caveat: they are preaching what Mellon practiced when he left the position of Secretary of the Treasury so his banking empire could receive bailout money from the Reconstruction Finance Corporation, that is, bail us out and as for the people, let them bear the brunt of unemployment, sharply declining
real incomes for the employed, home foreclosures, family breakups,
rising crime rates, and all of the the other consequences of letting the crisis run its course.

Government must act and act now, as FDR used to say. It must begin to address the peoples depression. Nationalizing the banks would be a radical solution but one, if it were connected with a restructuring of bank credit card debt, providing massive debt relief for tens of millions of Americans, might both help those citizens and their families and begin to revive consumer purchasing power relatively quickly.

It might also, if it were connected to public control of the mortgage division of finance capital, see a relatively quick revival of the construction industry(which would also benefit from major public works projects) increased minimum wages and most of all, increased trade union membership by the passage of the Employee Free Choice Act as a beginning to the repeal of all post WWII anti-labor legislation and a partnership between the trade union movement and the Obama administration to rapidly increase union membership would empower working people to protect themselves from the depredations of capital while increasing their mass purchasing power.

Since I am not a utopian, I do not expect this to happen immediately and most of our readers, I am sure, have great doubts that most of it will ever happen. But it should be what we are fighting for in 2009 as we seek through mass struggle to lead an administration move in that direction, not the direction that the spokesmen for finance capital are projecting, that is bailouts on a piecemeal basis and encouraging the people to learn to live with double digit unemployment, much higher levels of the double digit underemployment we already have, until the crisis rides itself out and prosperity once more "trickles down" to the people.

Needed: 17 million full-time jobs now!

Data released by the Economic Policy Institute last week reveal a worsening unemployment rate has combined with a 14 year high in the underemployment rate. The underemployment rate counts unemployed workers, "involuntary" part-time workers, and people who are "marginally attached" to the labor force by want and need steady full-time work.

According to EPI, "The underemployed currently includes about 9.5 million unemployed workers, 6.1 million involuntarily part-time workers, and 1.6 million workers only marginally attached to the workforce."

That is more than 17 million people who need steady, full-time work.

Unemployment and Inflation: Is This Just a Recession?

by Norman Markowitz

Unemployment rose in May, from 5 % to 5.5%, the largest one month jump in over twenty years. The national average for a gallon of gas reached four dollars today, with the upward spiral continuing. Those of us who visit supermarkets find that what are now advertised as "sale" prices for basic foodstuffs are above what the regular prices were a few months ago. And the Bush administration is still denying that a "recession exists" and the Republican presidential candidate, John McCain is talking about ending the federal gas tax, which, even if you discount the various middlemen hustling in to increase their profits, would only reduce gas prices as the moment, by around 15 to 18 cents a gallon. And this would not in any way affect the "market" speculation and manipulation of oil companies and various oil producing states (which would mean that gas that cost $3.80 a gallon this month would probably be up to $4 a gallon next month. Of course, McCain is addressing unemployment and wage stagnation by advocating new corporate tax cuts.

First, we should remember that the difference between "recessions" and "depressions" has always been artificial. At the beginning of the 1930s "depression" was a euphemism for what had previously been called "panics" and "crises," a soothing public relations term ("we are merely in a depression") until the term came to represent what was really happening, that is catastrophic mass unemployment, wage decline, and general decline in living standards. By the late 1930s, the term "recession" came into general use as an alternative to "depression" with economists developing the view that unemployment and other vital economic statistics had to be declining for a set period of time for the economy to be first in "recession" and then in "depression."

Even by those standards, as Jared Bernstein, a labor oriented economist noted, "we simply have never had five months of net job losses without being in a recession."

Even economists who work for pro business and Wall Street firms are making the point that the combination of huge gas prices and a very bad "labor market" for workers is creating general public pessimism and fear as reported in opinion analysis that is significantly greater than in the last two recessions.

And there are many "traditional" dimensions to the present crisis. One 1.5 million unemployed face a cutoff in their unemployment insurance benefits, which progressives in Congress appear ready to extend for another thirteen week, but which may face a presidential veto, since Bush administration spokesmen are contending that benefits have never been extended with the unemployment rate "so low." Unemployment among African Americans jumped to 9.7%, more than twice the jump in the general unemployment rate, and unemployment among people ages 16-19 rose by 3.3 %, from 15.4 to 18.7%. Of course, the "discouraged workers" or longterm unemployed are not counted any more (the official story is that they are "no longer looking for work" since they have failed to find it, a Catch 22 moment if ever there was one).

Also, economists are making the point that many companies, after years of job reduction through attrition, simply can't "shrink payrolls" much anymore. Instead they are cutting hours of employees and of course cutting their wages in the process.

What no one is really saying is that all of this is reminiscent of the "great depression," when unemployment shot up and the majority of the employed faced significant wage reductions. When the "stagflation" crises of the 1970s hit, as no one is saying, about one fourth of the
labor movement was unionized, personal consumer debt was much smaller than today, the U.S. was far less dependent on oil imports, and was still the leading creditor nation on earth. Today, the number of workers in unions as a percentage of the work force is less than half of what it was in the 1970s and less than a third of its peak in the early post WWII period. The national debt is more than ten times what it was in the 1970s, consumer debt has a crippling effect on the economy, and the U.S. is of course the world's largest oil importer.

Not only is the U.S. in a significant recession but it wil also l take transforming economic policies to address this crisis and keep it from become the "great depression" of the early 21st century.

It will take first of all a national administration which joins with the trade union movement to promote the organizing of the unorganized; a national administration which develops a national policy and agency to relieve the consumer debt crisis just as the New Deal government
established the FDIC, the Commodity Credit Corporation, and other programs to relieve the bank crisis. It will take a national energy policy that begins to both develop rapidly alternative energy sources and also public transportation policies. And it will take at the very least a revival of progressive tax policies. Senator Obama is coming forward with alternative energy proposals. He has also advocated eliminating the Bush tax cuts on the wealthy (although he is still a long way from a progressive tax program). He has also advocated a longterm "green jobs" creation policy, in which the government would through its investments help to produce millions of new environmentally positive jobs.

Senator Obama is moving in the right direction, and is keeping, as Franklin Roosevelt did, his options open. McCain of course is knocking his head against the dead end that is the Bush administration and thirty years of reactionary polices. Progressives as they support the Obama candidacy should actively encourage him to move forward and become bolder in his policy planning, since it will require bold progressive polices to address what is clearly becoming the largest general economic crisis in decades, perhaps of the whole post WWII era.

The Racist Edge of Bush's "Free Market" Agenda

Tax cuts for the wealthy and those who earn millions from capital investments, free trade and tax loopholes for companies who move jobs and production out of the country, federal investment in war and corporate cronies are the hallmarks of Bush's economic theory.

Reward your friends and punish your enemies.

This Bush axiom couldn't be more true in terms of the impact of Bush's economic fundamentalism on African Americans. The entire world saw the inhuman lack of concern and urgency Bush felt in responding to the humanitarian crisis following Hurricane Katrina, especially as it impacted areas where African Americans lived in large numbers. But the Bush economy has been grindingly and painfully eroding small economic African Americans were able to make in the 1990s and has widened the inequality gap.

The Center for American Progress recently published its analysis of economic trends in the African American community under the Bush regime using data culled from government sources. Among its findings were the following:

African Americans’ median income declined by an average of 1.6 percent per year under the current administration. In 2006, African Americans’ median income was $32,132, which is actually $2,603 lower than their median income of $34,735 (in 2006 dollars) in 2000. This is an annualized average growth rate of -1.6 percent. In contrast, this number increased at an annual average growth rate of 3.2 percent from 1992 to 2000. And African Americans’ median income is still substantially lower than Whites: In 2006, their median income was $32,132, as compared to $52,432 for Whites.

African Americans’ usual median weekly earnings have stagnated under Bush. In 2006, the usual median earnings of African Americans employed full-time was $554.00 per week—$136.00 dollars less than that of white Americans. In 2000, the usual median earnings of African Americans employed full-time was $553.14—in 2006 dollars—meaning that their usual median weekly earnings grew by just $0.86 under the current administration.

Under Bush, the percent of African Americans without health insurance has increased from 18.5 percent to 20.5 percent. In 2006, 7.9 million African Americans were not covered by health insurance. The rate of African Americans not covered by health insurance increased by an annual average percent point change of 0.30 between 2000 and 2006. This is a much different picture compared to the 1990s. From 1992 to 2000, the number of uninsured African Americans decreased from 20.1 percent to 18.5 percent, an average annual percent point change of -0.20.

The growth rate of the number of employed African Americans has been 4.2 times slower under the current administration than it was during the 1990s. Between 2000 and 2006, the number of employed African Americans grew on average by just 0.7 percent each year, which is markedly lower than the 2.8 percent annual growth rate experienced between 1992 and 2000. Additionally, this growth rate was noticeably faster than the 1.5 percent that Whites saw between 1992 and 2000, whereas under the Bush administration their growth rates have a difference of just 0.1 percent.

The employment to population ratio for African Americans has declined faster than that of the Whites under the current administration. In 2007, the employment to population ratio —the percentage of the civilian population that is employed—for African Americans stood at 58.4 percent compared to 63.6 percent for white Americans. Between 2000 and 2006, the employment to population ratio for African Americans declined by an average of -0.4 percent each year after increasing by 0.8 percent on average between 1992 and 2000. The employed share of the African-American population grew faster than the employed share of the White population throughout the 1990s, but has shrunk faster than Whites since then.

Unemployment levels for African Americans increased by an average of 0.2 percent each year under the current administration after declining in the 1990s. In 2007, the unemployment level of African Americans stood at a distressing 8.3 percent while white Americans hovered at 4.1percent. This is a sharp contrast to the movement of these levels throughout the 1990s, when African Americans' unemployment averaged an annual decline of -0.8 percent between 1992 and 2000. Importantly, Whites saw a slower decline in unemployment between 1992 and 2000 with an average growth rate of -0.4percent.

The increase in African-American homeownership has been slower under Bush than the 1990s. The homeownership rate for Whites increased three times faster than the homeownership rate for African Americans between 2000 and 2006. During this time, the homeownership rate for African Americans increased by an average annual growth rate of just 0.1, from 47.2 percent to 47.9 percent, whereas Whites’ homeownership rate increased by an average annual growth rate of 0.3 percent. This trend is in part because African Americans have actually seen their rate decline since 2004. Compare this to the 1990s, when African Americans’ homeownership rate increased by an average annual growth rate of 0.8 percent from 1994 to 2000. Whites' rate was 0.6 percent during this time (homeownership data by race are not available before 1994).

More African Americans are in poverty under Bush. More African Americans were in poverty in 2006 than in 2000, just after we saw a vast improvement the 1990s. In 2006, 24.2 percent of African-American individuals were in poverty. Compare this to 2000, when 22.5 percent were below the poverty line, a percentage point change of 0.28. Poverty among African Americans decreased substantially from 1992 to 2000, going from 33.4 percent to 22.5 percent, or an annual average percent point change of -1.36.

Thoughts on Veterans Day

Today, hundreds of events around the country honor military veterans. Politicians will give speeches, smile, and congratulate themselves on their patriotism.

Right-wing pundits and supporters of Bush's war will use the day to push their pro-war agenda. From their air-conditioned offices, they will urge the continued sacrifice of those who serve and their families.

But what of America's veterans? According to a recent study by the National Alliance to End Homelessness, 195,827 veterans were homeless on a given night in 2006, and almost twice that number of veterans went without a home at some point in 2006.

The scandal at Walter Reed hospital showed the impact of privatization (and the right-wing ideology of the free market at all costs) on the declining care provided veterans. Thousands wait for months at a time for needed care. A Bush administration policy of raising fees for services and of simply not telling vets about their eligibility for various programs may have saved money but it has hit veterans hard.

Poverty among vets is on the rise as well. Almost half a million vets pay more than half their income in housing costs. Most of these fall below the federal poverty line, and more than 4 in 10 survive on food stamps.

Veterans returning home from Bush's war are finding it hard to get their old jobs. Many suffer from unemployment or are forced into lower-paying positions.

A Harvard study finds that 1.8 million vets lack health care insurance and close to four million members of veterans families also lack coverage.

It is good that the Democrats in Congress have begun the fight to change this situation by passing laws the expand eligibility and help cover more health problems of returning vets. More funding has been found to improve hospital care.

But until there is an administration that actually cares for people and cares to fund services to protect the health and well-being of those people who selflessly sacrificed their lives, fortunes, and the well-being of their families – even if it was for a lie in Iraq – veterans will get the short end of the stick.

It is utterly offensive that the Bush administration – full of men and women who refused to serve when they were called upon to do so – now demands the continued sacrifice of the men and women who didn't shrink from what they saw as their duty.

On this Veterans Day, let's remember the people who served. Let's remember their needs. Forget smiling politicians with their cynical agendas.