We Are Living In The Conservative Recovery, And It’s Pretty Terrible
In talking about the economy, the Republican presidential candidates are quick to blame government spending for our current woes. “On my first day in office, I will send five bills to Congress and issue five executive orders that will get government out of the way and restore America to the path of robust economic growth that we need to create jobs,” said former Massachusetts Governor Mitt Romney when he unveiled his jobs plan in September. Likewise, in his plan, Texas Governor Rick Perry touts spending cuts as part of the road toward renewed economic growth: “The cut, balance, and grow plan paves the way for the job creation, balanced budgets, and fiscal responsibility that we need to get America working again.”
The problem, as Neil Irwin reports for The Washington Post, is that sharp cuts to government have been terrible for the recovery. Thanks to lower revenue, limited federal aid, and budget-cutting state legislators, the public sector has cut 455,000 jobs since the beginning of 2010, sending the proportion of government jobs to 16.7 percent, the lowest level in three years. These cuts have been a huge drag on the recovery -– to wit, October saw private-sector job growth of 104,000, which was offset by the loss of 24,000 public-sector jobs, for a net increase of 80,000 jobs. This dynamic has been true of every month since the recovery officially began.
Far from unleashing the power of the private sector, cuts to government have prolonged the economic pain, as demand is removed from the economy without an adequate replacement. Despite this, conservatives continue to press for further and greater cuts to government spending –- the Pentagon notwithstanding. What conservatives refuse to acknowledge is that we are living through the recovery they say they want, and it’s been disastrous.
By: Jamelle Bouie, The American Prospect, November 7, 2011
Quality Vs Quantity: Yes, We Need Jobs. But What Kind?
On Thursday, President Obama will deliver a major speech on America’s employment crisis. But too often, what is lost in the call for job creation is a clear idea of what jobs we want to create.
I recently led a research team to the Rio Grande Valley in Texas, where Gov. Rick Perry, a contender for the Republican presidential nomination, has advertised his track record of creating jobs. From January 2000 to January 2010, employment in the Valley grew by a remarkable 42 percent, compared with our nation’s anemic 1 percent job growth.
But the median wage for adults in the Valley between 2005 and 2008 was a stunningly low $8.14 an hour (in 2008 dollars). One in four employed adults earned less than $6.19 an hour. The Federal Reserve Bank of Dallas reported that the per capita income in the two metropolitan statistical areas spanning the Valley ranked lowest and second lowest in the nation.
These workers aren’t alone. Last year, one in five American adults worked in jobs that paid poverty-level wages. Worker displacement contributes to the problem. People who are laid off from previously stable employment, if they are lucky enough to find work, take a median wage hit of over 20 percent, which can persist for decades.
To understand the impact of low wages, in the Valley and elsewhere, we interviewed a wide range of people, including two directors of public health clinics, three priests, a school principal and four focus groups of residents. Everyone described a life of constantly trying to scrape by. One month they might pay for the phone, another, for utilities. Everyone knew how long each company would carry unpaid bills before cutting service. People spoke not only of their fear of an unexpected crisis — an illness, a broken car — but also of the challenge of paying for basic needs like school supplies. Many used the phrase “one paycheck away from homelessness.”
Because their parents cannot afford child care, children move among relatives and neighbors. They watch too much TV. They don’t finish their homework. Older children grow up too fast from parenting their younger siblings. As one person observed, “All you think about is which bill is more important.”
Economic stress strains marriages. Parents cannot afford quinceañeras for their daughters. In church youth groups, teenagers ask why they should stay in school if all they can get are low wages.
Many children are latchkey kids. Accidents are frequent; we heard of an elementary school student who badly burned himself in a science experiment, with his older brother watching. Their father couldn’t take time off from work to visit his son in the hospital. Children come to school sick. Parents miss teacher conferences because they can’t afford time off. Type 2 diabetes is a scourge in the Valley. Since Type 2 diabetics can be asymptomatic for years, many don’t buy medicine; as time passes, they become severely ill, often losing sight or a limb.
The director at one clinic, with nearly 70,000 visits a year, estimated that half of its patients had anxiety or depression. Often people can’t get to the clinic because they cannot afford to lose work time or because gas costs too much. When they go, they take their families, because they have no child care.
And yet the Valley is not hopeless. Teachers stay late to help with homework. They make home visits to meet parents. Health clinic employees work overtime. The community organization Valley Interfaith has pushed for training opportunities and living-wage jobs. There is no “culture of poverty,” but the low-wage economy has corrosive and tragic consequences.
Must we choose between job quality and quantity? We have solid evidence that when employees are paid better and given more opportunities within a company, the gains outweigh the costs. For example, after a living wage ordinance took effect for employees at the San Francisco International Airport, in 1999, turnover fell and productivity rose.
Contrary to the antigovernment rhetoric, there is much that the public sector can do to improve the quality of jobs.
A recent analysis by the Economic Policy Institute reported that 20 percent of federal contract employees earned less than the poverty level for a family of four, as opposed to 8 percent of traditional federal workers. Many low-wage jobs in the private sector (notably, the health care industry) are financed by taxpayers. The government can set an example by setting and enforcing wage standards for contractors.
When states and localities use their zoning powers to approve commercial projects, or offer tax incentives to attract new employers, they can require that workers be paid living wages; research shows this will not hurt job growth.
Labor standards have to be upgraded and enforced, particularly for those employers, typically in low-wage industries, who engage in “wage theft,” by failing to pay required overtime wages or misclassifying workers as independent contractors so that they do not receive the benefits to which they are entitled.
Americans have long believed that there should be a floor below which job quality does not fall. Today, polls show widespread support for upgrading employment standards, including raising the minimum wage — which is lower, in inflation-adjusted terms, than it was in 1968. It’s time for the federal government to take the lead in creating not just more jobs, but more good jobs. The job-growth mirage of the Rio Grande Valley cannot be our model.
By: Paul Osterman, Op-Ed Contributor, The New York Times, September 5, 2011
The Politics Of Austerity: It’s Not Too Late To Change Priorities
In a statement this morning, Republican National Committee Chairman Reince Priebus blamed rising unemployment on “ out-of-control spending.”
Perhaps now would be a good time for reasonable political observers to call this what it is: dangerously stupid.
The latest jobs report is truly awful, and comes just a month after a May jobs report that was nearly as bad. Overall, it’s the worst back-to-back trend in nine months, and in the private sector, the worst two-month stretch since May/June of last year.
The question is what policymakers are prepared to do about it.
When the jobs reports were looking quite good in the early spring, Republican leaders were eager to take credit for the positive numbers they had nothing to do with. Needless to say, GOP officials are no longer claiming responsibility, and are in fact now eager to point fingers everywhere else. It’s a nice little scam Republicans have put together: when more jobs are being created, it’s proof they’re right; when fewer jobs are being created, it’s proof Obama’s wrong. Heads they win; tails Dems lose.
To put it mildly, GOP whining is misguided — whether they want to admit it or not, the economy is advancing exactly as they want it to. The private sector is being left to its own devices; the public sector is shedding jobs quickly; and the only permitted topic of conversation is about debt-reduction.
This is the script the GOP wrote. When it’s followed to the letter, Republican complaints are absurd.
Indeed, the great irony of the 2010 midterms is that voters were angry and frustrated by the weak economy, so they elected a lot of Republicans who are almost desperate to make matters worse.
At this point, the GOP agenda breaks down into two broad categories:
* Ignore the problem: Republicans have invested considerable time and energy into measures related to abortion, health care, NPR, and calling the loyalty of Muslim Americans into question. To date, Republicans have held exactly zero votes on bills related to job creation.
* Make the problem worse: When they’re not fighting a culture war, Republicans are fighting tooth and nail to take money out of the economy, against tax cuts they used to support, and against public investments proven to create jobs, all while threatening to send the economy into a tailspin through voluntarily default. By some measures, the GOP may even be trying to sabotage the economy as part of an election strategy.
We know austerity doesn’t make things better, in large part because it’s not supposed to. That’s the point on austerity — to impose pain and sacrifice, not to grow and flourish. We can already see the results at the state and local level, where officials are forced to cut spending and laying off thousands of public-sector workers. These were preventable job losses, but the congressional GOP refuses to consider state and local aid. Worse, they intend to duplicate the results at the federal level.
It’s not too late. We can boost public investments. The Federal Reserve can stop worrying about inflation that doesn’t exist. We can stop pretending spending cuts can create jobs.
If the politics won’t allow for measures to make things better — if, in other words, Republicans refuse to consider steps to create jobs — then it’s probably time for the public to change the politics.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, July 8, 2011
Kicking The Unemployed When They Are Down
Recent highly publicized national jobs reports showing private-sector gains being offset by public-sector losses have drawn attention to the macroeconomic costs of the austerity program already underway among state and local governments, and gaining steam in Washington. But the effect on the most vulnerable Americans–particularly those out of work–is rarely examined in any systematic way.
At The American Prospect, Kat Aaron has put together a useful if depressing summary of actual or impending cutbacks (most initiated by the states, some by Congress) in key services for the unemployed and others suffering from economic trauma. These include unemployment insurance, job retraining services, and family income supports. In some cases, federal funds added by the 2009 stimulus package are running out. In others, the safety net is being deliberately shredded.
A recent report from the Center for Budget and Policy Priorities notes that the most important family income support program, TANF (the “reformed” welfare block grant first established in 1996) is becoming an object of deep cuts in many states, precisely at the time it is most needed:
States are implementing some of the harshest cuts in recent history for many of the nation’s most vulnerable families with children who are receiving assistance through the federal Temporary Assistance for Needy Families (TANF) block grant. The cuts will affect 700,000 low-income families that include 1.3 million children; these families represent over one-third of all low-income families receiving TANF nationwide.A number of states are cutting cash assistance deeply or ending it entirely for many families that already live far below the poverty line, including many families with physical or mental health issues or other challenges. Numerous states also are cutting child care and other work-related assistance that will make it harder for many poor parents who are fortunate enough to have jobs to retain them.
This is perverse precisely because such programs were once widely understood as “counter-cyclical”–designed to temporarily expand in tough economic times. Not any more, says CPBB:
To be effective, a safety net must be able to expand when the need for assistance rises and to contract when need declines. The TANF block grant is failing this test, for several reasons: Congress has level-funded TANF since its creation, with no adjustment for inflation or other factors over the past 15 years; federal funding no longer increases when the economy weakens and poverty climbs; and states — facing serious budget shortfalls — have shifted TANF funds to other purposes and have cut the TANF matching funds they provide.
This retrenchment, mind you, is what’s already happening, and does not reflect the future blood-letting implied by congressional Republican demands for major new cuts in federal-state safety net programs–most famously Medicaid, which virtually all GOPers want to convert into a block grant in which services are no longer assured.
If, as appears increasingly likely, the sluggish economy stays sluggish for longer than originally expected, and both the federal government and states continue to pursue Hoover-like policies of attacking budget deficits with spending cuts as their top priority, it’s going to get even uglier down at the level of real-life people trying to survive. If you are unlucky enough to live in one of those states where governors and legislators are proudly hell-bent on making inadequate safety-net services even more inadequate or abolishing them altogether, it’s a grim road ahead.
By: Ed Kilgore, Democratic Strategist, June 10, 2011
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