Posts Tagged ‘unemployment’


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The details of the agreement between Greece and its European creditors are now available. And there’s no doubt about it: this (as the top-trending Twitter hash tag puts it) is a coup. Greece has been forced to surrender (or, given the upcoming debate in parliament, to have the freedom to consider surrendering) a large part of its national sovereignty in exchange for a new European Stability Mechanism program bailout.

Alexis Tsipras [ht: sk] may or may not be a hero, “who fought like a lion against unfathomably large interests” and made it possible for Greece “to live to fight another day.” But that’s really beside the point. So, in the end, is Greek sovereignty—and, for that matter, the humiliating terms sponsored by Germany.

Because what we’re really witnessing is a coup in Europe as a whole. Merkel, Tsipras, Schäuble, and the rest are just the dramatis personae of a series of events that have turned the European project against its own people.

The dream, of course, was to expand democracy, eliminate national rivalries, and promote universal prosperity. But now the European project has become a nightmare of enforcing the conditions of creating and capturing profits—of large enterprises and banks—across an entire continent. And anything that gets in the way—whether existing pensions and state-owned enterprises or rehiring doctors, nurses, and cleaning women—will be sacrificed on the altar of those free-flowing profits.

And who are the losers? The hundreds of millions of workers, farmers, students, young people, and children who are being forced to endure extraordinary levels of unemployment, poverty, and economic insecurity in order to promote a post-2008 recovery that is benefiting only a tiny minority across the continent. And that’s just as true in Germany as in Greece, in England as in Spain. Not to the same degree, of course. But the current negotiations over Greek debt—in which all of their leaders and finance ministers have participated and to which they have given their assent—have demonstrated to the working people of Europe that nothing will be allowed to stand in the way of the interests of the free deployment of capital under conditions that are administered by the troika.

And if an entire nation has to be humiliated in order to serve as an example, so be it. . .


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Even the Wall Street Journal can’t answer the question.

When U.S. unemployment rates fall, conventional notions of supply and demand predict wages will go up as firms bid for increasingly scarce workers, and there are signs of that, for example, in building trades and restaurants. “Basic economics hasn’t gone out the window,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said in an interview. “When employment grows, wages will start to grow.”

But a Wall Street Journal analysis of Labor Department data points to persistent constraints on worker pay, even as the economy approaches full employment. The Journal found 33 U.S. metropolitan areas­­from the small to the sizable­­where unemployment rates and nonfarm payrolls last year returned to prerecession levels. In two ­thirds of those cities ­­including Columbus; Houston; Oklahoma City; Minneapolis-­St. Paul, Minn.; and Topeka, Kan.­­ wage growth trailed the prerecession pace.

So much for “basic economics”!

As is clear from the chart above, unemployment (whether measured in terms of the headline rate or the total, U6, rate) continues to fall and yet the rate of increase in nominal hourly wages has also been falling.

They throw lots of possible reasons against the proverbial wall, hoping something sticks. But here’s the one that is most compelling:

Companies tapping pools of workers who have disappeared from the U.S. unemployment tallies, creating what economists describe as hidden slack in the economy. Until this invisible labor supply is spent, these men and women, including part-­timers, temporary workers and discouraged labor ­market dropouts, could hold wages down.

The fact is, the rate of change of hourly wages was less than 2 percent in April, while the total unemployment rate in April still stood at 10.8 percent.

It’s what some of us call, without euphemism, the Reserve Army of the Unemployed and Underemployed.


Europe has long been the land of make believe for North Americans. Make-believe royalty, quaint villages, lives free from work, and superb food and wine (OK, the food and wine are, indeed, very good).

Now, it seems, it’s the land of make believe for the Europeans themselves, or at least the tiny elite that is attempting to keep things as they are. Such as the idea that Greece will ever be able to fully retire its outstanding debt, and that continued austerity policies will move it in that direction.

And, now, Potemkin companies in France and across the continent that have been set up to keep the 23.5 million workers who are jobless, especially the long-term unemployed, occupied.*

These companies are all part of an elaborate training network that effectively operates as a parallel economic universe. For years, the aim was to train students and unemployed workers looking to make a transition to different industries. Now they are being used to combat the alarming rise in long-term unemployment, one of the most pressing problems to emerge from Europe’s long economic crisis.

As Bill Blunden [ht: ja] explains,

Faced with the threat of a political uprising the ruling class would prefer that the unemployed dutifully remain on the job treadmill, keep their nose to the grindstone, and stay with the program. Because in doing so workers offer tacit acquiescence to existing political, economic, and social arrangements. To do otherwise might give the unwashed masses a chance to organize and consider alternatives. For the moneyed gentry of the 0.1% that could be truly dangerous.

And that’s exactly why they continue to fabricate a land of make believe.

*According to the same source, 5.1 percent of the European labor force in 2013 had been unemployed for more than one year; more than half of these, 2.9 percent of the labour force, had been unemployed for more than two years.


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