Unemployment, the Sequester and the Continuing Economic Crisis

Abayomi Azikiwe, Pan-African News Wire editor, holds the infamous MECAWI leaflets that required a federal court order to distribute at a "avoid foreclosure" fair in downtown Detroit. (Photo: Cheryl LaBash)., a photo by Pan-African News Wire File Photos on Flickr.

Unemployment, the Sequester and the Continuing Economic Crisis

Failure to create jobs and income reveals the shallowness of a recovery

By Abayomi Azikiwe
Editor, Pan-African News Wire

Unemployment inside the United States is still a major issue even though the existence of tens of millions of jobless and part-time workers does not warrant serious discussion within the halls of Congress, the White House or Wall Street.

On July 5, it was announced that some 195,000 new jobs had been created but that the unemployment rate remained at 7.6 percent. These two seemingly contradictory figures given to the media and the public reveal that there is no real rebound to the world’s largest economy and that the growth rate during the first quarter stood only at 1.8 percent.

The federal government through the Congress and the White House has not advanced any plans or programs for the realization of full-employment. Wall Street which sets the agenda for the corporate community and the state apparatus in the U.S. is seeking numerous ways to lower wages, slash benefits and consequently drive even millions more into poverty.

In the public sector there has been massive job loss through the downsizing of civil servants, human services employees and public education workers. From Philadelphia and Chicago to Detroit, hundreds of schools are being closed and thousands of teachers, bus drivers, service workers, social workers, custodians, clerics and health care personnel are being laid off permanently.

Rather than address the economic crisis at its roots, the federal government and the banks are passing on the implementation of austerity to the state, county and municipal governments. In cities around the country, the banks are dictating the terms of public service and the allocation of tax dollars slated for schools, lighting, assets maintenance and pensions demanding that the resources of working people be allocated for debt payments and the strengthening of the status-quo.

Moreover, the unemployment figures released monthly in no way reflect the actual situation involving joblessness. There are millions of additional workers who are toiling part-time, in menial jobs far below their qualifications, not to mention those who have given up looking for employment because there are no viable options to pursue.

Even Forbes, which is a publication of the major U.S.-based firms and financial institutions, was forced to admit the false character of the jobless figures. “The ‘official’ unemployment rate doesn’t count men and women…discouraged workers who have settled for part-time jobs or have given up looking altogether,” the magazine says. (July 5)

This same source goes on to say that “Tracking those individuals, under what’s called the “U-6″ rate, gives a very different measure of the nation’s unemployment rate: 14.3%. And unlike other jobs figures, the U-6 rate actually got worse in June — it went up by 0.5 percentage points.”

The Sequester and the Federal Deficit

Since the beginning of 2013, the issue of the federal budget deficit has played out at the expense of working people and oppressed communities across the U.S. There were massive cuts instituted in federal departments including transportation regulation, Head Start, public health, education and senior services.

Programs which provide funding for meals for senior citizens and pre-school programs for children have been gutted while the Pentagon and intelligence services have enhanced their spending in the so-called “war on terror.” Earlier in the year there were serious delays in air transport due to the furlough days imposed on transportation workers. An act of Congress alleviated some of the congestion at the airports but further cuts are coming in the future.

At the same time the Sequester has reduced funding for unemployment benefits when these displaced workers need more support than ever. The Emergency Unemployment Compensation program is slated for a $US2.4 billion reduction.

This will force states to trim benefits or halt payments to more long-term employed workers. In some states the cuts will be as high as 22 percent of the amount of the checks they are receiving while others will receive benefits over a shorter period of time.

A study by the National Employment Law Project (NELP) points out the dramatic impact these cuts will have on some of the most marginalized workers throughout the country. With prospects for job creation almost nil, the slashing of benefits will precipitate the dramatic rise in poverty.

"[I]t is the workers who have benefited least from the economic recovery who are bearing the largest share of the burden of these domestic sequester reductions," said the National Employment Law Project in a statement. (U.S. News and World Report, July 3)

According to journalist Danielle Kurtzlebon, “While benefits are cut, long-term unemployment remains a persistent problem. Currently, nearly 4.4 million Americans have been unemployed for 27 weeks or longer. That is down significantly from an early 2010 peak of 6.7 million but is far higher than the levels of around 1.1 million seen in the mid-2000s.”

Program for Full-Employment, Poverty Elimination Needed

It is quite obvious that the federal government and the corporations have no intentions of even raising the notion of job creation and the eradication of poverty in the U.S. This is the program that labor unions, community organizations and all progressive forces should be demanding from Obama administration, Congress and the capitalist class.

There are currently two laws on the books which mandate that the federal government through the Federal Reserve Bank implement job creation program when the rate of joblessness reaches a critical level. The Full Employment Act of 1946 and the Humphrey-Hawkins Bill of 1979 are still considered good law that lack enforcement. A current effort by Detroit Congressman John Conyers to draft additional employment legislation will go nowhere without the force of a mass movement.

It is important that when these unemployment figures are announced monthly, workers and their advocates should answer these grim statistics with demands for public works programs and the reinvestment in jobs and income-generating projects aimed at the hardest-hit of the working class and the nationally oppressed.

There are plenty of resources for bank bailouts, which are ongoing through the Federal Reserve’s “stimulus programs”, and the war machine that is financing Pentagon and intelligence aggression programs throughout the world. The true class bias of the government is revealed when these policies are not halted and funding redirected to lift tens of millions out of joblessness and poverty in the U.S.

These developments point to the failure of capitalism worldwide. From North America, Southern and Western Europe to the African continent, Latin America and the Asia-Pacific, the plight of workers and the poor are worsening while profit levels for the banks and select corporations are growing exponentially.