Public Comment

Confronting Our Fragile Economy

Harry Brill
Friday August 21, 2015 - 04:09:00 PM

How would the Department of Labor's Bureau of Labor statistics (BLS) report the following? Simple arithmetic would tell us that If employers convert, say, 1000 jobs into half time positions, the outcome would double the number of jobs even though not even a single hour of work has been added. Yet the BLS in its employment and unemployment reports would interpret this change without explanation as a 100% improvement. Although the new, part time jobs very likely will offer fewer benefits or no benefits at all, anyone reading just the reported numbers, which is only the number of new jobs created, would conclude understandably that things are getting much better. 

But actually eliminating full time jobs to create part time employment is not good news at all. Although the BLS statistics are reassuring, more and more full time jobs are disappearing in favor of marginal part-time and even temporary work. Moreover, the BLS is covering up other dismal labor force developments as well. The real unemployment rate is more than twice the rate reported by the BLS. Particularly serious, the BLS underestimates the long term unemployment rate because discouraged workers are excluded in calculating its count. They have either given up looking for work or are not looking frequently looking enough to satisfy the BLS. As one economist observed, unlike earlier years, when unemployed workers returned to their old jobs, a lot of jobs are no longer coming back. So as the Wall Street Journal recently reported, the number of full time jobs is now lower than it was prerecession peak eight years ago. 

Getting a realistic portrait of the economy is not difficult. The large corporations generally announce their layoffs. For example, Microsoft just announced its plans to eliminate 8700 jobs. In the aggregate, almost 400,000 jobs have disappeared since the beginning of this year. Particularly worrisome, the job loss represents a 34% increase since the same period last year 

Clearly, the reality is that the economy is very fragile. The Economic Justice Committee of The Wellstone Democratic Party's Economic Justice Committee, which I am a member of, has put together a paper spelling out what must to be done. I'll distribute the paper to you when the final draft is completed. Other progressive organizations are drafting similar proposals. 

Most of all, we need to replace the current RAW DEAL that Americans are getting with a NEW DEAL, which would actively involve the federal government in job creation programs, protecting the rights of labor, and assuring a living wage for all working people. Seventy percent of our domestic economy depends on consumer spending. Since the vast majority of consumers are working people, higher wages in secure jobs are indispensible to building a sound economy. Particularly important, special attention must be given to racial and ethnic minorities, whose jobs are less secure, whose income is much lower than the average, and who experience substantially a much higher rate of unemployment. 

Keep in mind that we cannot achieve any of our goals without government intervention. But particularly important, the government cannot enact and enforce our progressive agenda without our intervention. This takes a lot more than making persuasive arguments. Building political power is mandatory. A strong mass movement will create a more favorable electoral ambiance. Also, an effective movement, like the civil rights movement and the earlier labor movement struggles, can exert leverage by making it very difficult for the private sector to do business as usual. 

Conservatives believe that aggressively adopting programs which improve our standard of living is the problem. How wrong they are. It is the solution!