Bill Knight column for Mon, Tues., or Wed., Sept. 21, 22 or 23
The most recent jobs report seemed to show some affection for the idea of a recovery. The unemployment rate last month was down to 5.1 percent – the lowest level since before the Great Recession started before the 2008 elections. Employers reported creating 173,000 jobs.
But Wall Street and its media chums warned: What would it mean for the Federal Reserve Board’s decision to raise interest rates 0.26 percent when its Open Market Committee meets this month?
There may have been a peck on the cheek in the numbers, but the real caution was feeling spurned.
The Bureau of Labor Statistics noted that 10 percent of U.S. workers are either unemployed, so discouraged they’ve stopped looking for work, or laboring at part-time jobs when they want full-time work. Also, most new jobs are in low-wage positions such as restaurants and bars, temporary work, and health-care assistance.
Oh, yes: Factories lost 17,000 jobs.
There were more than 17 million manufacturing jobs from 1971 to 1997, BLS says, but 1994’s North American Free Trade Agreement (NAFTA) started sacrificing factory work so much that manufacturing was down to 13.9 million jobs by 2007.
NAFTA and other “free-trade” agreements encouraged moving jobs to Mexico, China or other countries with sweatshops, leading to more importing and less exporting, and they contributed to an over-valued dollar, which also worsened the trade deficit.
Another report released this month, the National Employment Law Project’s “Occupational Wage Declines since the Great Recession,” demonstrates that the economic recovery has not only left wage-earners behind; it’s hurt them. The research details the inflation-adjusted decline in wages during the recovery from the financial collapse. Hourly wages have declined at every income level, with the lowest-wage workers getting hit the worst. Real median hourly wages declined by 4 percent from 2009 to 2014.
“Most workers have failed to see improvements in their paychecks,” NELP reported. “In fact, taking into account cost-of-living increases since the recession officially ended in 2009, wages have actually declined for most U.S. workers. Inflation-adjusted, or ‘real,’ wages reflect workers’ true purchasing power; as real wages decline, so too does the amount of goods and services workers can buy.
“The failure of wages to merely keep pace with the cost of living is not a recent phenomenon,” NELP added. “The declines in real wages since the Great Recession continue a decades-long trend of wage stagnation.”
But the apologists for the elite are anxious about the Fed raising interest rates even a teensy amount – above a rate already so low companies should have been investing in expansion and innovation and – yes – employing people.
“The argument is whether the least democratic economic institution should raise interest rates by one quarter of one percent,” said Robert Borosage of the Campaign for America’s Future advocacy group. “Will the gesture reassure speculators that the Fed thinks the economy is strong or spark a stock market rout?”
Again: Who cares – compared to empowering workers with wages decent enough to help them be consumers?
Officials elected to represent regular Americans should be debating how best to rebuild the nation, ease student debt, enact a jobs program for urban and rural America, agree on a federal budget, replace free trade deals with fair trade pacts, and start using federal contracts to encourage good employers to pay decent wages.
Instead, the paralyzed, paranoid GOP-controlled Congress is gearing up to shut down government again because of exaggerated claims about Planned Parenthood, or to drone on about building border walls, or sabotaging a treaty with Iran, or same-sex marriage or the Affordable Care Act…
True, Republican presidential hopefuls are saying a few of the right things. Bush, Christie, Paul, Rubio and Walker all have acknowledged threats to everyday workers and the middle class. However, they’re also announcing more of the same failed policies, like not raising the minimum wage hike, promoting more tax cuts for the rich, and blocking family-friendly policies like paid sick leave to help households that need parents both to work to have a chance to tread water.
“Instead of offering ideas that will improve economic security, boost incomes and support working- and middle-class families, Republicans are simply repackaging the old top-down solutions that favor the wealthy few at the expense of working families,” said Anna Chu and co-authors from the Center for American Progress. “It’s old wine in new bottles.
“Although leading Republicans are talking more about opportunity and mobility,” she continued, “there is a mountain of evidence that many of their proposed policies would hurt average families.”
Enough pretending that there’s kissing (and making up).
It’s past time to kick butt and take names.
[PICTURED: Cartoon by Bob Rich via hedgeye.com.]