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Busted: Unemployment Rise Worst in 20 Years
The corporate media mouthpiece Bloomberg may say the nation’s economy is “stalling” in the wake of today’s announcement that the jump in the U.S. unemployment rate is the worst in more than two decades, but working Americans know the real word for it: Disaster.
Jobs fell by 49,000 after a 28,000 drop in April, according to the U.S. Department of Labor. The unemployment rate increased to 5.5 percent, the fifth straight month in a row that jobs decreased.
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The meltdown in employment is not a random or short-term event, says AFL-CIO President John Sweeney. Rather:
It is a new indicator of a long-brewing problem that is toxic when combined with falling incomes, the mortgage crisis and out-of-control everyday costs. It is high time we recognized the problem with aggressive action.
In fact, the unemployment rate is just the most visible part of the economic crisis that’s gutting the living standards of America’s workers. In the past 30 years, wages have not kept pace with productivity and continue to evaporate. From The New York Times:
Salaries continued to shrink in May, after adjusting for inflation. Workers’ wages grew in May but at an anemic pace, with rank-and-file employees earning just $17.94 an hour, on average. That was a 5 cent increase—or 0.3 percent—from April.
Among African Americans, unemployment rates are even worse, jumping to 9.7 percent in May from 8.6 percent in April. There is one job for every two people seeking work.
Tanking jobs, frozen wages—a scenario compounded by a home equity and mortgage crisis that worsens daily. But just yesterday, presidential candidate John McCain had this to say about the U.S. economy:
I have a great belief that the fundamentals of the economy are very strong. Very strong.
Back to reality: The Federal Reserve yesterday announced home equity dropped to 46.2 percent in the first quarter of this year, a level not seen since the end of World War II. At the same time, homeowner mortgage debt worsened. From the Associated Press:
The total dollar value of equity also fell for the fourth straight quarter to $9.12 trillion from $9.52 trillion in the fourth quarter, while Americans’ total mortgage debt rose to $10.6 trillion from $10.53 trillion.
According to the Mortgage Bankers Association, 8.9 percent—or about one in 11 of all mortgages—are late or in foreclosure. Overall, Americans’ net worth declined by $1.7 trillion in the first quarter of this year—the biggest drop since 2002.
The list of economic crises we face as a nation is massive, but what’s happening is not a series of isolated or random events. The morass we’re in is the long-term result of failed policies by the Bush administration acting on behalf of its corporate funders: The same group who have the ear and the pocketbook of McCain.
Since Bush took office, the nation lost nearly 3.3 million manufacturing jobs (between March 2001 and March 2008) and only gained 5.3 million jobs overall—just slightly more than half the number of jobs needed to keep pace with the 9.8 million people added to the labor force during that period.
Since the late 1990s, average incomes fell by 2.5 percent for those in the bottom fifth of the income scale and rose by just 1.3 percent for those in the middle fifth, according to the Economic Policy Institute. Meanwhile, incomes climbed 9 percent for those in the top fifth, not counting income from capital gains. Meanwhile, the wealthy in the top 1 percent of the income bracket got about half of the overall economic growth between 1993 and 2006.
How would a McCain presidency address our economic nightmare? McCain’s economic plan offers two massive tax cuts for corporations, slashing tax rates from 35 percent to 25 percent, with 58 percent of the benefits going to the top 1 percent of taxpayers—an even larger tax rate cut for the wealthiest taxpayers than Bush gave them. At the same time, McCain would tax our health benefits.Working families can’t stand another four years of economic pummeling.
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Paid for by the AFL-CIO Committee on Political Education Political Contributions Committee, www.aflcio.org, and not authorized by any candidate or candidate’s committee.
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3 Comments
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The economic realities facing working people is actually be a lot worse than is being discussed in the numbers and statistics above. Here is an article that discusses this question with a couple of quotes:
Behind the falsification of US economic data
By Peter Daniels
2 June 2008
http://www.wsws.org/articles/2008/jun2008/data-j02.shtml
“In recent years, it has become increasingly clear to those who follow US economic statistics that there is something dubious about the numbers released by official government agencies and used to guide many aspects of social and public policy.
The details and chronology of the corruption of economic data are presented in a new book by Kevin Phillips, the political commentator and former Republican Party adviser who has become something of a muckraking critic of the “excesses” that he helped set in motion. The book is entitled, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism Phillips summarizes some of his main conclusions in an article in the current issue of Harper’s Magazine.”
“…Phillips convincingly demonstrates that the real unemployment rate in the United States is between 9 and 12 percent, not the 5 percent or less that is officially claimed. The real rate of inflation is not 2 or 3 percent, but instead, between 7 and 10 percent. And real economic growth has been about 1 percent, not the 3-4 percent officially claimed during the most recent Wall Street and housing bubble that has burst.”
Hell this is easy to fix,let’s do somemore of that free trade thing and somemore illegal alien stuff and all will be well.
It was shocking to see a celebrity like Ed McMahon about to lose his home. Because of a neck injury, he has been unable to work the last eighteen months and is in talks with Country wide Mortgage to keep them from foreclosure on his Hollywood home.
This situation only illustrates how easy it is for anyone to get into a financial bind. Most blue collar workers are only about three pay checks from poverty if anything happens to their job.
States should consider not only extending the length of time to collect unemployment benefits but also increasing them at least temporarily until the economy has a chance to right itself. In Missouri the amount of unemployment is $225 after taxes. (Why would you tax such a hiddeously low amount of relief anyway?)
This amount hasn’t been increased in many years. Most families spend $150 a week on groceries. By the time you figure in utilities, mortgage, car payments and insurance, you’re hurting for certain!
As far as Wall Street and John McCain go, they won’t even admit that we’re in a recession yet!