North America
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North America
Corporate dominance greater in US than other advanced capitalist countries. . But US Spring budding.
by Sean http://weknowwhatsup.blogspot.co.uk/
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USA - Wisconsin workers fight on
First Recall Petition Will Be Filed Todayby James Parks, Apr 1, 2011 The first recall petition will be filed today against a Wisconsin Senate Republican who joined the rigged vote to take away public employees freedom to bargain. Organizers say volunteers have gathered more than the 15,588 signatures needed to trigger a recall election of Sen. Dan Kapanke, who represents the La Crosse area. Recall supporters say they plan to take the petitions to Madison after a rally today at La Crosse City Hall. This is the first of 19 active recall efforts registered between Feb. 24 and March 2 against 16 senators. The filing comes just before the halfway point in the 60-day window the recall committee has to gather signatures in the district. The state Democratic Party provided infrastructure support but “not a single paid canvasser was needed to trigger the recall versus Dan Kapanke,” said party spokesman Graeme Zielinski, who credited volunteers for collecting more than 20,000 signatures in less than 30 days. “It took on a life of its own,” said Pat Scheller, who filed the original paperwork to launch the recall effort. Scheller is a banker and is not a member of any party. The state Government Accountability Board could order an election on the sixth Tuesday after determining the petition is in order. If there is more than one challenger, that election would be a primary followed by a general election four weeks later. Democrats need three additional senate seats to gain a majority. Kapanke is one of three targeted Republicans who won the last election with less than 52 percent of the votes. 200,000 demonstrate -
by Todd Richmond 12 March 2011 MADISON, Wis. — Thousands of pro-labor protesters turned out for more demonstrations at the Wisconsin Capitol on Saturday, seemingly undeterred by the fact that a contentious collective bargaining bill had been signed into law the day before. The demonstrators insisted the fight wasn't over, and many said their focus would now be on recalling the Republican lawmakers who had pushed through the bill. Efforts to recall from office eight Republican state senators and some of the 14 Democratic state senators who fled to try to prevent a vote on it have already started. Democratic senators were expected to make their first appearance in Madison since fleeing the state later Saturday. Their departure had left the Senate one vote short of the number needed to pass measures spending money. Republicans got around that by breaking out the collective bargaining provisions of the legislation, which could be passed with fewer members present. The proposal to eliminate most of public workers' collective bargaining rights touched off a national debate, and its passage was a key victory for Republicans who have targeted unions in nationwide efforts to slash government spending. But labor leaders have said they plan to use the setback to fire up their members nationwide and mount a major counterattack against Republicans at the ballot box in 2012. Saturday's protest got a boost from a parade of more than 30 tractors driven by farmers supporting the union workers. Thousands of people lining the sidewalks cheered as tractors rolled by bearing signs with messages such as "Planting the seeds for a big season of recalls." The farmers thrust their fists in the air in response. Tod Pulvermacher, 33, of Bear Valley, drove a tractor towing a manure spreader carrying a sign that read, "Walker's bill belongs here" – a reference to Republican Gov. Scott Walker. "Farmers are working-class Americans," he said as the crowd around him started to cheer. "We work for a living as hard as anybody, and this is about all of us." Pulvermacher said the fight against the law was "everybody's fight" and it was just beginning. "If we can keep the energy high, we can change a lot of things in Wisconsin in the next year," he said. Tears and Anger after Anti-Union Bill passesBy Katrin Dauenhauer, http://www.ipsnews.net/ - Emotions are running high at the State Capitol in Madison, Wisconsin after Republican senators passed a revised version of a budget repair bill that will take away public workers' collective bargaining rights in an ad hoc session Wednesday night. Democratic senators fled the state more than two weeks ago to prevent a vote on the controversial piece of legislation. But this week, Republican lawmakers stripped the bill of financial components to circumvent a quorum that would have required 20 senators, and thus at least one Democratic senator, to be present. The bill passed the Assembly Thursday and was signed into law by Governor Scott Walker early Friday morning. Outside the capitol building, protesters expressed anger and frustration over the Republican maneuvre by shouting "Shame, Shame" and "Liar, Liar". Earlier chants of "This is what democracy looks like" have turned into "This is what tyranny looks like." "This was totally dirty politics," Ben Kaker, a teacher from Madison told IPS. "The vote clearly shows that Walker isn't after the money but after busting unions. Financial goals might come later, but they are not paramount. This also shows that Walker was lying the whole time." "What happened last night was a travesty of democracy," said Don Smith, a union member from Madison. "I am almost speechless because it amounts to rape of the American way. This vile creature [Walker] and his 17 criminals with their total disregard for what America stands for totally corrupted democracy and sold it to an oligarchy that must be defeated at all costs." Democrats and protestors are questioning the legality of the procedure. Participants had only been informed about the meeting less than two hours prior. Open meeting laws by the state, however, require the notification of participants and the public at least 24 hours in advance. "I am completely horrified that such an illegal thing took place. It's different if you read about it. But if you actually saw how the vote went down, you can't but cry. This is a 'F**k you' to the American people," Leah Thomas from Madison told IPS. "Similar initiatives are going on in other states right now. They are all looking to Wisconsin to see how things turn out. If Wisconsin will serve as a precedent for legislation in other states, we are in big trouble," she continued. "I am appalled. I think what happened last night was the culmination of the Republican Party's disrespectful behaviour of the last couple of weeks. This is the furthest thing away from democracy that I can think of. I am not in a position to say if it was unlawful but at the very least it was unethical. My faith in democracy has been shaken," Dawn Wavra from Waunakee told IPS. "I am hoping this vote will not stand. Otherwise it is looking pretty tough for Wisconsinites," Dough Joseph from Eau Claire told IPS. Protesters also criticise the increased difficulties to enter the capitol building. While in the beginning the building was open to the public day and night, a Mar. 3 court order declared that people could not occupy the capitol after hours. And during the day, long lines await people who want to get inside. Bag checks and metal detectors are in place. "I was here during the vote. They [the police] dragged us out of the vestibule by picking us up one by one, even though I was part of a public hearing. It's disgusting. They started out by saying it's about the budget and it's not about collective bargaining. Scott Walker is a liar. You can't get any more blatant about a lie than this," Tim Wersland with Iron Workers Local 383 told IPS. Meanwhile, unions asked members to join the recall efforts against Republican senators in the eight districts where the process is already underway. Calls for a recall of Republican senators and Governor Walker have also been made by many protesters. "Walker is taking this state backwards, this is very unsettling. Hopefully, we can recall him. Walker is saying he is not listening to polls, but he ought to be, because right now, the majority of the people has turned against him," Sue Brumberg from Eau Claire told IPS. "He is dividing the state, people are getting polarised. It is very disheartening. Hopefully, we can turn things around," she said. The possibility of a general strike is also being discussed. "This is not just a vote on union organisation. This is a larger attack on the working class and amounts to class warfare," Michael Koc from Industrial Workers of the World (IWW) told IPS. "It is sad to see that the best thing Democrats could do is leave. But this also shows that we cannot rely on either party within the system, but need to use direct actions to fight for our rights." "We are a long way off from a general strike, but we have to organise to make our voices heard," he added. Protesters are closely watching the upcoming Wisconsin Supreme Court election, which could help turn the tide in making their voices heard. Currently, the court has a four- to-three conservative majority. One of the judges, David Prosser, is up for reelection on Apr. 5. Running against him is JoAnne Kloppenburg. As activists expect the Supreme Court to rule on the legality of Wednesday's vote, they stress the importance of a liberal majority with Kloppenburg on the court. Despite the passage of the bill, protesters are determined to continue their demonstrations. Another big rally is planned for this Saturday. "We think it's completely unfair that they are not listening to the peaceful protesters right outside their window. But we are not going away. And the weather is only getting better," Shelley Hoernke, a teacher from Oshkosh, told IPS. "I am embarrassed for my state, which has a proud history of progressive politics. I am not proud of last night's vote but we will prevail," said Paul Klein from Steven's Point. "People are mad." With No ‘SHAME,’ Republicans Ram Walker’s Bill Through Assembly http://blog.aflcio.org
by Mike Hall, Feb 25, 2011 The Republican-controlled Wisconsin State Assembly early this morning unexpectedly cut off debate and quick-marched a vote on Gov. Scott Walker’s (R) bill to eliminate the right of public service workers to bargain for middle-class jobs The bill passed 51-17 with 28 lawmakers—all Democrats, three Republicans and an independent—abstaining in protest. The bill still must pass the state Senate and Wisconsin workers continue their fight against the bill. There were still more than 15 speakers still scheduled to speak out against the attack on workers and more amendments poised for votes. But according to the Milwaukee Journal-Sentinel Republican leaders invoked rarely used rule to end the debate before voting on the bill. That rule requires a motion seconded by 15 members and then a roll call vote. Assembly Chief Clerk Patrick Fuller said afterward he was not sure whether that had occurred, saying he had heard the order to start a vote on the final passage of the bill and had done so. Later Rep. Kelda Helen Roys (D-Madison) said, “We never imagined they would do it as they did, not even properly using the nuclear option.” After the rapid fire vote, Democratic Assembly members begin a chant of “Shame! Shame! Shame!” that was quickly picked up the legions Wisconsin workers in the packed Assembly gallery. Teachers, nurses, state parks workers and other public employees and their supporters have been in Madison for nearly two-weeks in a historic protest against Walker’s assault on good jobs. Republican lawmakers immediately left the chamber without comment. Assembly Minority Leader Peter Barca called the action a sad day for day for this state when we are willing to ignore the traditions that people died for in this state, that people fought bitterly for.,we ignore our forefathers who made this a great state. The bill still must pass the state Senate and Wisconsin workers continue their fight against the bill. Also hundreds of solidarity rallies are on tap across the country this weekend and we’ll bring you more on these later today.  Sunday, February 20, 2011 02:57 AM http://www.dispatchpolitics.com Protesters gather outside the Capitol in Madison, Wis. The largest crowd since protests began showed up yesterday. MADISON, Wis. - A state Capitol thrown into political chaos swelled for a fifth day with nearly 70,000 protesters, as supporters of Republican efforts to scrap the union rights of state workers challenged pro-labor protesters face to face for the first time. GOP leaders insisted again yesterday that there was no room for compromise.
Up to 30,000 people overwhelmed the Wisconsin State Capitol amid weeklong protests in Madison. Members of the Super Bowl Champion Green Bay Packers and President Obama have made statements in support of public workers’ unions. Tom Morrello leads singing of World Wide Rebel Song and reads solidarity message from EgyptAs the standoff entered its second week, thousands braved cold winds and freezing temperatures to march again on Monday, waving signs that said “Stop the attack on Wisconsin families” and “solidarity.” The protests drew a high of 68,000 people on Saturday. A standoff in Wisconsin between Republican state lawmakers and their Democratic counterparts, as well as public workers and unions, has put the state capitol at center stage of a national struggle for workers’ rights, with peaceful protests not seen since the Vietnam War 40 years ago. Republican leaders are ignoring the interests of 200,000 state employees and their families, and so far are choosing to stand with big business and campaign contributors over working families. Under the guise of pushing through debatable budget cuts, Governor Scott Walker is also trying to push through legislation that would curtail collective bargaining rights for public workers in violation of their democratic rights and in what many say is an un-American assault on labor unions and workers. He is using the fiscal crisis to advance an extremist agenda against the middle class. At a time when many public employees have taken freezes and furloughs already, Governor Walker proposed to cut the pay and benefits of workers as much as 10 percent. These are middle class families on the line, and Governor Walker’s blatant disregard for their democratic rights as workers to form a union and collectively bargain is a blatant power play by Republican big money interests and a blow to working families in Wisconsin. Governor Walker would destroy the voice of educators, nurses, sanitation workers, police officers, firefighters, bus drivers, and other public employees by destroying their unions. His legislation would placate big business and his campaign contributors, abandoning 200,000 public employees. This does not solve the state’s budget problems, and would instead unfairly penalize the people of Wisconsin. We stand with the working families in Wisconsin and wish them luck in their struggle. by Northwestern Living Wage Campaign Jobs With Justice
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Check Out Great Video and Audio Clips from Wisconsin Events by
Tula Connell, Feb 22, 2011
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TONS of great video clips from Wisconsin.
Here is a list of links. Check them out and get inspired.
- Matt Wisniewski created this inspiring video that’s getting tons of deserved attention: http://vimeo.com/20089255
- Wisniewski’s follow up video: http://vimeo.com/20168864
- Egyptian union leader’s message of solidarity to U.S. workers: http://www.michaelmoore.com/words/must-read/statement-kamal-abbas
- United Steelworkers (USW) President Leo Gerard on the battle in Wisconsin in an interview with Bill Press (audio): http://www.billpressmedia.com/nsmpc/bps022111-gerardFREE.mp3
- Wisconsin students support their teachers (audio): http://www.laborradio.org/
- Things to know about Wisconsin from a transport worker: http://www.youtube.com/watch?v=Spm428PGOG4
"What's Disgusting? Union Busting!" Chant Wisconsin Crowds That Swell to 30,000; Key GOP Legislators Waver
"I have never been prouder of our movement than I am at this moment," shouted Wisconsin AFL-CIO President
Phil Neuenfeldt, as he surveyed the crowds of union members and their
supporters that surged around the state Capitol and into the streets of
Madison Wednesday, literally closing the downtown as tens of thousands
of Wisconsinites protested their Republican governor’s attempt to strip
public employee unions of their collective bargaining rights.
Where Tuesday’s mid-day protests drew crowds estimated at 12,000 to 15,000, Wednesday's mid-day rally drew 30,000, according to estimates by organizers.
Madison Police Chief Noble Wray, a veteran of 27 years on the city’s
force, said he had has never see a protest of this size at the Capitol –
and he noted that, while crowd estimates usually just measure those
outside, this time the inside of the sprawling state Capitol was
“packed.”
On Wednesday night, an estimated 20,000 teachers and their supporters
rallied outside the Capitol and then marched into the building, filling
the rotunda, stairways and hallways. Chants of "What's disgusting? Union
busting!" shook the building as legislators met in committee rooms late
into the night.
Protestors to Wisconsin Gov. Scott Walker's proposal to eliminate
collective bargaining rights for many state workers demonstrate in at
the State Capitol in Madison, Wis., Wednesday, Feb. 16, 2011. (AP
Photo/Andy Manis) The country was starting to take
notice, as broadcast and cable-news satellite trucks rolled into town.
The images they captured were stunning, as peaceful crowds filled vast
stretches of the square that surrounds the seat of state government.
Republican legislators -- who had been poised to pass the governor’s plan Thursday, and might yet do so – were clearly paying attention. Two GOP senators broke with the governor, at least to some extent. Dale Schultz from rural southeastern Wisconsin and Van Wanggaard from the traditional manufacturing center of Racine, proposed an alternative bill that would allow limit bargaining rights for public employees on wages, pensions and health care for the next two years but allow them to continue to bargain on other issues.
While that’s hardly an attractive prospect to state workers – as it would also require them to make significantly higher pension and health-care contributions – the measure rejects the most draconian component’s of the governor’s plan. Other Republicans resisted the proposal, however, offering only minor amendments to the governor's plan.
If Schultz and Wanggaard actually vote "no" Thursday, when the measure is to be taken up, just one more Republican senator would have to join them in order to block the bill.
That the first real movement by Republicans came after Wednesday’s rally was hardly surprising, as few state capital’s have seen the sort of mobilization that occurred at mid-day, and that is likely to reoccur at nightfall as teachers from across the state are expected to pour into the city for a rally and candlelight vigil.
In some senses, Wednesday’s remarkable rally began Tuesday evening, when Madison Teachers Inc., the local education union, announced that teachers would leave their classrooms to spend the day lobbying legislators to “Kill the Bill” that has been proposed by newly-elected Republican Governor Scott Walker.
The teachers showed up en masse in downtown Madison Wednesday morning.
And then something remarkable happened.
Instead of taking the day off, their students gathered at schools on the west and east sides of Madison and marched miles along the city’s main thoroughfares to join the largest mass demonstration the city has seen in decades – perhaps since the great protests of the Vietnam War era.
Thousands of high school students arrived at the Capital Square, coming from opposite directions, chanting: “We support our teachers! We support public education!”
Thousands of University of Wisconsin students joined them, decked out in the school’s red-and-white colors.
Buses rolled in from every corner of the state, from Racine and Kenosha in the southeast to Green Bay in the northeast, from La Crosse on the Mississippi River to Milwaukee on Lake Michigan.
Buses and cars arrived from Illinois and Minnesota and as far away as Kansas, as teachers and public employees from those states showed up at what American Federation of State, County and Municipal Employees union president Gerald McEntee says is “ground zero “in the struggle for labor rights in America.
The moms and dads of the elementary school kids came, and the kids, carrying hand-lettered signs:
“I love my teacher!”
“Scott Walker needs to go back to school!”
“Scott Walker needs a time out!”
And, “We are Wisconsin!
“I’ve been here since the 1960s, I’ve seen great demonstrations,” said former Mayor Paul Soglin, a proud former student radical who was nominated for a new term in Tuesday’s local primary election. “This is different. This is everyone – everyone turning out.”
Everyone except the governor, who high-tailed it out of town,
launching a tour of outlying communities in hopes of drumming up support
for his bill. Most of the support Walker was getting was coming from
national conservative political groups, such as the Club for Growth,
which have long hoped to break public-employee unions. But the governor
held firm, saying after a day of unprecedented protests – in Madison and
small towns and cities across the state – that he still wanted to pass
his bill. He’s got strong support in the overwhelmingly Republican
Assembly. But he cannot afford to lose one more Republican state
senator. And the unions and their backers are determined to find that
one Republican who is smart enough and honest enough to recognize that
the governor's assault of public employees is an assault on Wisconsin
itself.
The state's largest teachers union, the Wisconsin Education Association Council
has called on its 98,000 members to come to rally in their hometowns
and then come to the Capitol. "All citizens of Wisconsin should come to
Madison!" reads the call. Tens of thousands will come. The state, county
and municipal employees will come. The nurses will come. The small
business owners will come. The parents and students will come. They will
ask the question: "What's disgusting?" And they will answer with a
roar: "Union busting!"
© 2011 The Nation
USA: from progressive to rentier
15 February 2010 by Michael Roberts US capitalism is no longer a progressive force in the development of productive forces. What do I mean? An economy is ‘progressive’ in the sense that it develops more and new things that people can use to improve their living standards and reduce their hours of toil. Capitalism is a social mode of production that has been progressive in that sense. ‘Progressive’ does not mean that the capitalist system is fair, equal or just, just that it has raised the production of things we use and need to new heights. But US capitalism has now got old and less and less progressive. The US capitalist economy now has more sectors of its economy that act as a parasites on the productive sectors of the economy, living off the value generated there. These parasitic sectors do not produce value but merely usurp or extract that value from the productive sectors, indeed to the point where they seem more profitable. These unproductive sectors include finance, real estate, insurance (called FIRE), wholesale merchanting, advertising and marketing and government. Many of them may be necessary to capitalism in lubricating the system with credit or providing a healthy and educated workforce. But they are at a cost to the productive sectors, like manufacturing, agriculture, mining, utilities, transport and communications. For US capitalism to be progressive then, these productive sectors must be dominant. They are no longer. I looked at data going back to 1799 (see the Historical Statistics of the United States 1799-1945, published by the US Bureau of Census). Back in 1799, agriculture was the dominant sector in the US economy with 40% of output followed by transport at 24%. Manufacturing was just 5% of output. Just before the start of the second world war in 1937, manufacturing was the dominant sector peaking at 31% of GDP compared to 12% for agriculture by then (transport was more or less the same share). The US did not become a predominantly industrial capitalist economy until 1900, when manufacturing share’s finally surpassed that of agriculture at around 20% of GDP.
It really took off in the interwar period as the US became the greatest manufacturing nation in the world (which by the way it is still is – China has not quite surpassed it yet in billions of dollars of value, although it is about to) .
But by 1937, the productive sectors of the US economy were predominant, contributing nearly 60% of annual output. The really parasitic parts of the economy (FIRE) were still little more than 10% of annual output. But that was the peak. After 1945, US manufacturing became less and less the dominant sector in the economy, dropping from 28% in 1950 to just 11% of GDP now. At the same time, FIRE’s share rose from 11% to just under 22% now, a doubling. The services sector, especially government, also grew significantly in size and the productive sectors of the capitalist economy are now in a minority. The key tipping point was when FIRE’s share of national output exceeded manufacturing in 1985. From then on, US capitalism has become increasingly a rentier economy – more value now comes from interest, rents and dividends than from manufacturing. FIRE’s share of added value has been hived off from the productive sectors (both those within the US and from abroad).
It is well documented that financial sector profits have risen sharply compared with non-financial profits in the US economy, at one point reaching over 40% of all domestic profits. But there has also been an even more significant rise in profits from overseas. That’s nearly quadrupled since 1950, while financial profits have just doubled as a share. US non-financial domestic profits have dropped by one-third. Domestic non-financial profits still constitute the biggest share but we are close to the point when profits from the financial and overseas sectors will contribute more than half of all US corporate profits.
That would make the US truly an imperialist rentier economy. America is no longer the progressive force in the world but a parasite on other capitalist economies. http://thenextrecession.wordpress.com |
Is America recovering?
7 February 2010 by Michael Roberts The January employment figures in the US were totally confusing. The increase in jobs in January was announced as just 36,000, way below most economists’ forecasts. That suggested the US economy is stuttering and would not sustain an economic recovery. On the other hand, the January unemployment rate fell from 9.4% to 9.0%, a huge monthly fall and followed a similar drop in December. That suggests a fast-gathering economic recovery is under way as corporations and small businesses start to hire new staff. Since the figures were announced, economists have written reams
about what is the truth behind these conflicting data. The conflict is
caused by the employment figures being generated from a different survey
than the unemployment figures – the two series are not compatible and
only begin to coincide after a long period (of even longer than a year
sometimes). So one or two month’s data tell you little.
So is American capitalism recovering from the Great Recession? The
best way to answer that question is to look at three economic series.
The first is the state of corporate profits and profitability. This is
the best measure of the health of capitalism and the best indicator of
which way a capitalist economy is likely to go.
The second measure is to look at investment. Capitalists use most
of their profits to invest and without capitalist investment in new
structures and new equipments, economic growth will be weak at best and
fall back at most. And with investment in new technology and buildings,
increased hiring and a rise in employment should follow.
With a rise in employment would come better incomes for the
majority of working people and thus more spending on consumer goods and
services. So the third and lagging measure is the state of employment.
Let’s consider these series, starting with profits and
profitability. We don’t yet have the figures for US corporate profits
for the last quarter of 2010. The data stop in Q3’2010 at the moment.
But they show two things in the graph below.
 First, total corporate profits in $bn are now virtually back to the
level they peaked at in Q3’2006. They fell a staggering 40% from that
peak to a low at the end of 2008. Now they have jumped back by 65% in
the last two years, as corporations drastically reduced costs by sacking
over 9m workers and stopping investment programmes or closing down
plant. So profits have risen $645bn from the low point. At the same
time, corporate revenues have risen just $$540bn, or 7%. So the huge
recovery in profits has mostly been achieved by cost-cutting not by an
increase in sales.
This cost-cutting has also restored corporate profitability. We
can’t measure properly the rate of profit in the US economy right up to
the end of 2010 from a Marxist point of view because the data are not
available yet. But we can get a good proxy for profitability by
measuring corporate profits against gross domestic product. If we do
that, we see that the rate of profit (more strictly, the profit margin)
has climbed back to over 11% of GDP from a low of 7% at the end of 2008.
Profitability is still not back at the peak of 12.3% in Q3’2006,
which was artificially bloated by the great credit and financial sector
boom that went bust in 2007-8. But it’s now well above the average
rate of the last ten years.
So the profitability figures suggest that the US economy is
recovering. But for the recovery to be sustainable, investment and
employment growth must follow. If we look at the state of private
investment in the US, the picture is not so positive.
 As the graph shows, private non-residential investment (so this
excludes households buying houses and government investment) fell 18%
from a peak in mid-2008 to a low at the end of 2009. Since then, it
made a 9% recovery in 2010. But corporate investment levels are still
$240bn lower than they were in 2008, some three years later. And the
ratio of corporate investment as a share of GDP is still 2% points below
its peak three years ago. The recovery in US corporate profitability
would suggest that investment will also pick up, but so far it has been
painfully slow.
That brings us to employment, where we started in this post.
Recovering profitability and profits have engendered a weak revival in
corporate investment. And because investment is rising only slowly,
companies are not rehiring , even if they have stopped sacking workers.
The best measure of that, which cuts through the confusions of the
January data, is the employment to population ratio.
 When we look at the US data, we find that the employment to
population ratio took a huge fall during the Great Recession. The ratio
has more or less stabilised since the end of 2009, but shows little
sign of recovering. The ratio is still higher than in the 1970s, but
that’s simply because many women have taken up jobs in the last 40 years
( the male participation rate has systematically fallen over the last
50 years and is now at its lowest level ever). The overall
participation rate (ie the number of those employed compared to those of
working age) fell 8% from the end of 2006 and has not recovered. That
means many Americans cannot get a job, have given up and stayed at home
or gone into education.
As the US Center for Budget and Policy Priorities puts it, although
job losses have bottomed out, 7.7m less Americans are at work than in
December 2007. It’s particularly worse for those long-term unemployed
. Over two-fifths of the 14m Americans who are unemployed have been out
of work for over half a year – that’s 6.2m peple and over 4% of the
labour force. That’s more than 70% worse than in the last big recession
of 1980-2.
New jobs are being created at about 100k a month right now. That’s
not enough to keep up with population growth and nowhere near enough to
get the unemployment rate down. There needs to be an increase in jobs
of 320k a month for two years to get employment back to December 2007
levels and even more to restore full employment. Indeed, the US
Congressional Budget Office reckons even if the US grows at its historic
trend real growth rate of 3.4% a year from now on, it will take until
2016 for the unemployment rate to halve!
Having looked at these three series, we can reach a conclusion.
The capitalist economy is recovering from the Great Recession: profits
and profitability have nearly recovered to previous peaks. But American
corporations are still reluctant or cautious about raising investment
and starting to expand again after huge cutbacks in costs and
‘downsizing’ their workforces. As a result, employment is not yet
picking up much and so American households will not see any improvement
from the cuts in real incomes that they have suffered over the last two
years.
Of course, that loss in the real incomes of average Americans has
not happened to the rich. The richest 1% own more than half of all the
shares of stock traded on Wall Street and the top 10% own the next
40%. And the US stock market has nearly doubled since its low in March
2009. Most Americans have hardly any assets and what they do have is
just a portion of equity in their homes. The collapse in home prices
(30% plus since the peak) has not been restored at all. So for the
average household, wealth is still hugely down.
In the latest quarterly survey of housing-market conditions, home prices continue to drop. They’ve dropped in all of the 28 major metropolitan areas compared to a year earlier. The size of the year-to-year price declines is larger than the previous quarters in all but three of the markets surveyed. And as we have commented on before, Thomas Piketty and Emmanuel Saez have published data recently that show, while the top 1% of American households by income saw a 20% fall in real income during the Great Recession (see my post, No remorse, 13 January 2011). This wiped out half the gains they had made between 2002 and 2007. But the bottom 90% of American households also saw incomes fall by 7%, the largest one-year drop since 1938! And that more than wiped out any increase from 2002 to 2007, leaving real incomes for 90% of American households no higher than they were 15 years ago! For most Americans, there is no recovery at all. http://thenextrecession.wordpress.com |
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