Posts Tagged ‘unemployment’

Milanovic

This chart, devised by Branko Milanovic, illustrates the remarkable economic recovery that has taken place in the United States beginning in 2010—a recovery, that is, not for the vast majority of people, but for a tiny minority at the top.

Consider the first period (blue line). It is remarkable that real income of all groups declined. But the hardest hit were the rich, with percentage losses increasing as we move toward to right portion of the graph, and the very poor.  I am not an expert on US welfare system, but it seems to me that the system failed to protect the poorest people from substantial income losses between 2007 and 2010. But for the bulk of the population, the years of the Great Recession meant a modest real income decline. The median person’s real income went down by a little over 3 percent. The upper middle class (the people between the 80th and 90th percentiles) did not see much change in their real income. But the top 10% clearly lost out: notice how the blue line starts decreasing ever more steeply as you move toward the top 1%. The Gini coefficient decreased by less than 1 point.

Now, look at the red line which shows the real change in the second period. It is almost a mirror-image of what happened in the first. The growth was zero or positive along the entire distribution, the strongest among the very poor (around the lowest 5th percentile) and among the rich (the top 10%). Median inflation-adjusted per capita income decreased by just under 1%. For the two top percentiles, which got clobbered by the recession, real income growth was in excess of 10%.

In other words, those at the very bottom lost a great deal during and immediately after the crash and, as a result of special measures (like an expansion of the food stamp program and increases in state minimum wages), they’ve managed to claw back some of what they lost—and they’re still poor. For pretty much everyone else, they lost out (as a result of growing unemployment and stagnant wages) and they still haven’t recovered (even though the unemployment rate has declined but their wages are still pretty much where they were before the crash). And those at the top? They lost a great deal (because of the initial decline in corporate profits and the stock market crash) and, as a result of the nature of the recovery (which has successfully restored the profits of large corporations and Wall Street equities), have now recovered most of what they lost—and they’re still rich.

So, after a brief hiatus (in 2009), the United States is back to having the most unequal distribution of income of all the rich countries on the planet.

And, unless things change (and I don’t mean the Fed’s tinkering with interest rates or one or another corporation raising wages above the federal minimum), that obscenely unequal distribution of income is only going to continue to get worse.

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We really need to go beyond the headlines to make sense of today’s jobs report.

The headlines are replete with “full health” and “strong” gains (in the Wall Street Journal and Reuters, respectively), based on total nonfarm payroll employment rising by 257,000 in January. But the report itself reveals not much has changed: not the official unemployment rate (5.7 percent), the number of unemployed workers (9 million), the jobless rates for different demographic groups (adult men, adult women, whites, blacks, Asians, and Hispanics), the number of long-term unemployed workers (2.8 million), and so on.

In fact, some numbers have gotten even worse—for example, the unemployment rate for teenagers (up to 18.8 percent) and the U6 unemployment rate (up to 11.3 percent).

About the only positive news is the rise in hourly earnings:

In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $24.75, following a decrease of 5 cents in December. Over the year, average hourly earnings have risen by 2.2 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $20.80.

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Even then, from a bit longer view, there’s not much to cheer at all: average hourly earnings continue to limp along at an annual growth rate of about 2 percent, far below previous increases and much below the growth in productivity.

Looking beyond the headlines, one thing then is clear: there’s been very little recovery for the majority of people more than five years after the official end of the Great Recession.

Class War by Other Means

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Greece has gone from tragedy to triumph—from the tragedy of austerity-induced suicides to the triumph of the anti-austerity landslide victory of Syriza.

So, before we get lost in the media hysteria of “radical leftists,” “firebrand” leaders, and jittery international financial markets, let’s be clear about what Greek voters rejected on Sunday.

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Greek workers rejected an austerity program that has led to a decline of more than 25 percent in Gross Domestic Product since 2007.

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They rejected an austerity program that cut government spending by almost 40 percent since 2009.

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They rejected an austerity program that led to a dramatic rise in unemployment—to 29 percent.

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They rejected an austerity program that led to a dramatic rise in unemployment among young people—to over 60 percent.

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And they rejected an austerity program that, in just one year (2013), led to a decline in real wages of 6 percent.

In other words, in decisively rejecting the austerity program, Greek voters have found a way to move beyond tragedy and to give an enormous electoral triumph to Syriza.

 

Naomi Klein, in her book The Shock Doctrine, made us all aware of disaster capitalism—”the rapid-fire corporate reengineering of societies still reeling from shock”—which has occurred across the world, from Pinochet’s Chile to post-Katrina New Orleans.

But what about examples of people creating practices and institutions other than capitalism in societies that are reeling from shock, what we might call disaster noncapitalism?

We certainly saw many examples during the First Great Depression in the United States, of which King Vidor’s long-overlooked film is the best cinematic account.

More recently, beginning in 2000, Argentine workers recuperated more than 180 enterprises, thus creating thousands of jobs, forming a broad network of mutual support among the worker-run workplaces, and generating many community projects.

And now, of course, we have Greece’s solidarity movement, which unfortunately has received much less attention in the run-up to Sunday’s election than the fears stoked by those who want us to believe continued austerity is the only option.

Yes, Greece is a dramatic example of at least some aspects of disaster capitalism, the way a country can be pummeled into submission in order to maintain the privileges of a tiny minority at home and abroad. But it’s also an example of its opposite—of how people are willing to band together, in the worst of circumstances (with soaring unemployment, declining wages, and Draconian cuts to government services), to invent new kinds of economic institutions.

The Peristeri health centre is one of 40 that have sprung up around Greece since the end of mass anti-austerity protests in 2011. Using donated drugs – state medicine reimbursements have been slashed by half, so even patients with insurance are now paying 70% more for their drugs – and medical equipment (Peristeri’s ultrasound scanner came from a German aid group, its children’s vaccines from France), the 16 clinics in the Greater Athens area alone treat more than 30,000 patients a month.

The clinics in turn are part of a far larger and avowedly political movement of well over 400 citizen-run groups – food solidarity centres, social kitchens, cooperatives, “without middlemen” distribution networks for fresh produce, legal aid hubs, education classes – that has emerged in response to the near-collapse of Greece’s welfare state, and has more than doubled in size in the past three years.

“Because in the end, you know,” said Christos Giovanopoulos in the scruffy, poster-strewn seventh-floor central Athens offices of Solidarity for All, which provides logistical and administrative support to the movement, “politics comes down to individual people’s stories. Does this family have enough to eat? Has this child got the right book he needs for school? Are this couple about to be evicted?”

As well as helping people in difficulty, Giovanopoulos said, Greece’s solidarity movement was fostering “almost a different sense of what politics should be – a politics from the bottom up, that starts with real people’s needs. It’s a practical critique of the empty, top-down, representational politics our traditional parties practise. It’s kind of a whole new model, actually. And it’s working.”

The many successes of disaster noncapitalism in Greece are one of the reasons Syriza has a good chance of winning tomorrow’s election.