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Robert Reich writes, "Overall, the number of unemployed Americans - 13.7 million - is about the same as it was last month. The number working part time who'd rather be working full time - 8.3 million - is also about the same. But to get to the most important trend you have to dig under the job numbers and look at what kind of new jobs are being created. That's where the big problem lies."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)



The Real News on Jobs

By Robert Reich, Robert Reich's Blog

05 March 11

 

re we making progress on the jobs front? The Bureau of Labor Statistics reports 192,000 new jobs in February (220,000 new jobs in the private sector and a drop in government employment), and a drop in the overall unemployment rate from 9 to 8.9 percent.

We're heading in the right direction but far too slowly to make a real dent in unemployment. To get the unemployment rate down to 6 percent by 2014 we'd need over 300,000 new jobs a month, every month, between now and then.

Overall, the number of unemployed Americans - 13.7 million - is about the same as it was last month. The number working part time who'd rather be working full time - 8.3 million - is also about the same.

But to get to the most important trend you have to dig under the job numbers and look at what kind of new jobs are being created. That's where the big problem lies.

The National Employment Law Project did just that. Its new data brief shows that most of the new jobs created since February 2010 (about 1.26 million) pay significantly lower wages than the jobs lost (8.4 million) between January 2008 and February 2010.

While the biggest losses were higher-wage jobs paying an average of $19.05 to $31.40 an hour, the biggest gains have been lower-wage jobs paying an average of $9.03 to $12.91 an hour.

In other words, the big news isn't jobs. It's wages.

For several years now, conservative economists have blamed high unemployment on the purported fact that many Americans have priced themselves out of the global/high-tech jobs market.

So if we want more jobs, they say, we'll need to take pay and benefit cuts.

And that's exactly what Americans have been doing.

Employers have demanded wage and benefit concessions from their unionized workers and often got them. Detroit is creating auto jobs again - but new hires are getting about half the pay that auto workers were getting before. Airline workers are taking home 30 to 50 percent less than they did years ago. And so on.

Conservatives say it's not enough. That's why unions have to be busted - and why some governors are seeking to abolish laws requiring workers to become dues-paying union members in order to get certain jobs. Hence, the fights brewing in the Midwest.

Meanwhile, millions of non-union workers have accepted cuts in pay and benefits just to keep their jobs. Health benefits have been slashed, pension contributions from employers dramatically cut, wages dropped or "frozen."

Millions of private-sector workers have been fired and then re-hired as contract workers to do almost exactly what they were doing before, but without any benefits or job security.

The current attack on public-sector workers should be seen in this light. The charge is they now take home more generous pay and benefit packages than private-sector workers. It's not true on the wage side if you control for level of education, but it wasn't even true on the benefits side until private-sector benefits fell off a cliff. Meanwhile, across America, public-sector workers have been "furloughed," which is a nice word for not collecting any pay for weeks at a time.

At this rate, the unemployment rate will continue to decline. But so will the pay and benefits of most Americans.

Conservative economists have it wrong. The underlying problem isn't that so many Americans have priced themselves out of the global/high-tech labor market. It's that they're getting a smaller and smaller share of the American pie.


Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

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+28 # PhilO 2011-03-05 11:49
Cuts to the salary and benefits of public-sector employees is no different that a tax aimed specifically at those people. Isn't it ironic that the REAL high wage people are not being taxed that way. It's ANOTHER example of the poor and middle getting poorer, and the rich getting richer!!
 
 
+21 # Tucker 2011-03-05 12:17
I have a friend who works as a production employee for a graphic design company. She was "laid off" from her job and rehired as a freelance employee for less money, no over time pay and a cut in benefits! Is she counted among the new jobs being created? Will controlled disintegration of the economy be the method used to turn back the clock on all the advances we have made in protecting workers rights?
 
 
+22 # Sharon Toji 2011-03-05 14:09
I am a small business employer. Most of our work is ADA signs (accessible to disabled) for public projects. The last three years we have lost money. Up until a year ago, our employees were all full time, got fully paid health care, 12 paid holidays, 12 paid days of personal and sick leave, and from 1 to 3 weeks of paid vacation. Our own salaries were not the highest in the company.

We did everything to save, including cutting our salaries, putting almost our entire modest savings into the company, and increasing the co-pay on the heath insurance.

Then we cut vacation. Next we cut down on paid days off. Finally, we totally did away with all paid time off, but kept health care. Then we put people on half time (they still qualified for health care). Finally, I have had to actually let people go, but I'm trying to hang on to everyone with children to support, and persons with disabilities.

Yes, we probably needed to "tighten our belts," but this is ridiculous, and not necessary. Those employees who tried to find other work have searched in vain for months. And yet there is plenty of work to be done, if our government could just overcome the "Teaparty Taliban" and step up with jobs and building projects. Wake up, America!
 
 
+10 # Tucker 2011-03-05 16:56
Yes, Sharon. I truly appreciate your responsible and humane perspective on the situation you and many other business owners find yourselvelves in. This is exactly what small business owners are being forced into! It's sad that hard working people like yourself are forced to make these kind of heart wrenching decisions simply to keep up with effects of a rapidly eroding economy. The replacement of an economy based on physical development with one based on monetary "magic" has created such displacement of wealth and rampant inflation that it is becoming impossible for any business not somehow involoved in unscrupulous business practice to stay alive. Restoring Glass-Steagal standards banking regulation and clearing away much of the fraudulent debt the United States "owes" the speculators is a must, along with a general bankruptcy style re-organization of the nations economy. If our President does not have the courage to immediately begin taking these types of steps we will soon live in a world under Wal-Mart, without a mom and pop shop in sight.
 
 
-7 # MrGoodrant 2011-03-05 13:58
I looked at the report that Reich cites. It doesn’t say what he says it says. According to Reich, the report says, “the biggest gains have been lower-wage jobs paying an average of $9.03 to $12.91 an hour.” These figures appear to come from the report’s Table 1, which does show that the top-gaining industry pays $12.91 an hour and the fifth-place industry pays $9.03 an hour. But the industries in 2nd, 3rd, and 4th place pay more than that, and the 2nd and 3rd place industries actually pay more than (what I take to be) the average for all industries at the bottom of the table! Worse, the 2nd place industry, which pays an average of $19.76 (and which gained almost as many jobs as all the industries listed as job losers!), is, guess what, “durable manufacturing.”

In short, three of the five top-gaining industries pay more than Reich claims the top-gaining industries pay, two of them pay more than the average for all industries listed, and the 2nd-top-gaining industry is precisely the one that one endlessly hears “offers good jobs at good wages”! Who does Reich’s fact checking??
 
 
+1 # funnyfarm12 2011-03-07 22:26
Personally, I'd like to see 9.03 an hour. I just got a hard earned raise, all the way to 8.25. Woot!
 
 
-4 # MrGoodrant 2011-03-05 14:24
OK, Reich must have been looking at Figure 2, not Table 1. Figure 2 sums job losses and gains for all industries by wage level, not just the top performers. (One can quibble over whether his statement is clear on that.) But Figure 2 seems inconsistent with Table 1: if you add the jobs gained in industries paying $19.05 or more (and net out job losses in other high-wage industries, in the bottom part of that table) you get 284,000 jobs created in those industries, whereas Figure 2 says 179,000. And even if you accept Figure 2’s numbers, Reich omits to mention that the sum of job gains in high- and mid-wage industries (i.e., all jobs in industries paying above an average of $12.92 or more) exceeds the gains in low-wage industries. Plus it remains true that the 2d-highest job-gaining industry was durable manufactures and that the next two best-performing industries pay average wages of $13.50 or more.
 
 
+4 # DPM 2011-03-05 15:06
Employers have been using all kinds of "tricks" to lower their labor costs. For many very small (mom and pop) businesses, it has been the only they they have been able to survive the hard times. Nothing new there.
However, if there is more wealth at the top, it had to come from somewhere and I suspect much of it has come from higher profits, in part due to lower labor costs, in part due to lower wages and benefits and fewer people doing more work.
Conservatives, the real big shots not your run of the mill Republican neighbor, have been tightening their economic grip on the people of this country for 30 years. And it continues. They will use conservative moral issues to fire up their broader base, but it is the money they are after.
If the Koch's and Murdoch's of this world are not checked you'd better start growing your own food, making your own clothes and strengthening your legs for that long work to your slave wages job!
 
 
+12 # disgusted American 2011-03-05 17:31
The goal is to have large numbers of unemployed for a long time to make people so desperate, they'll work for peanuts.

"Creating jobs" is pandering to the people. Democrats and Republicans are involved in the same agenda. The difference is Republicans are up front about not giving a damn while Democrats don't want you to know, so they make a few weak squeaks now and then to rally the base, but are mostly silent.

Removing bargaining rights for unions will affect all workers - also part of the plan. Democrats are merely keeping a low profile.

Arundati Roy said making people poor and too tired to do anything stops dissidence. Maybe she's wrong, and people will continue to rise up out of anger.

The ruling class has started a war against the people, and if the people back down, they will become slaves.

It's about control and depopulation. Obamacare is set up to slowly euthanize us while the gov't/corporati ons steal our money/property. Obamacare and the failed MA plan are siblings, and neither are about affordable, comprehensive health care for all.

Things will get worse because of ruling class/wealthy elite greed. They must depopulate for fear of not having enough for themselves. And they must continue their empire-building , profiteering wars, using us and innocent civilians as dispensible cannon fodder.
 
 
+2 # Tucker 2011-03-05 20:51
Well said.
 
 
+2 # maryla sandberg 2011-03-05 17:49
The Baby Boomers are about to retire in big numbers. What effect will this have on the jobs statistics?
 
 
+1 # Spence 2011-03-05 23:45
Quoting maryla sandberg:
The Baby Boomers are about to retire in big numbers. What effect will this have on the jobs statistics?


The propensity is for it to have a positive effect on the labor force. Less workers should produce more jobs to fill. The retiring workers will have some mony to spend thanks to SS.

If we really cared about creating jobs we would not raise the retirement age but drop it to age 60.. or less. Obviously we have too many workers.
 
 
+5 # Rita Walpole Ague 2011-03-06 03:05
PROTECT WORKERS' RIGHTS!...
VILLAINAIRES, GO TO HELL!!!

The new slogan/logo I've made into 'poor girl/poor boy' car window stickers, and enlarged and held up in street corner protests and carried in yesterdays' Manitou Springs Carnivale Parade, gets 'thumbs upped' and cheered for by a most encouraging number of passersby and onlookers. No big suprise in the precious hippy haven of Manitou Springs, but when that happens here in Colorado Springs, neo-con haven and super fusion center of the U.S. of (greed and power) A.(ddiction), then maybe, just maybe there is hope that we the sheeple are beginning to wake up and take off the blinders.

Thank you, Reader Supported News, and all your great contributors, Reich included, for helping so much in spreading the truth, and countering all the karlroving spin, manipulation, and distraction we wallow in. Lots of pain and suffering ahead for us as we do what it takes to.....

UNDO THE COUP!
 
 
+2 # DPM 2011-03-06 11:53
Well said and welcome, ritaague! Too many are willing to sit on their keesters and complain, but are afraid to stand up and be counted. Obviously, you are willing to be counted in the war against oppression!
 
 
+2 # David Murphrey 2011-03-06 12:58
Mr. Reich: I am totally dismayed that no one has had the presence of mind to publicly recognize or remember who and what is essentially responsible for the loss of jobs and livable wages in America-- even as conservatives publicly blame it on Democrats...

The fundamental reason the job market in America is--and will continue to become more--dismal, is because conservative corporate CEOs have taken the most vital industrial and livable wages from Americans and given them to third-world dictator's corporate cronys who have keeped their peoples poverty stricken and hostage to working for $1.00 to $2.00 an hour since the 1970s.

Jobs and and living wages will continue to be evacuated from the US economy until American citizens recognize how they have been increasingly duped or denied understanding of this by 90% conservative corporate-contr olled media and the people of America take power over these corporate monsters.
 

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