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Vol. 74/No. 6      February 15, 2010

Gov’t job proposals
offer little for workers
(front page)
In his State of the Union talk January 27 and in appearances since then, President Barack Obama says job creation will be his “number one focus in 2010.” But his proposals, pegged around providing tax breaks to small businesses, offer little prospects for jobs for some 18 million workers currently unemployed.

In response to Republican criticism of big spending, Obama said in a January 30 radio address, “As we work to create jobs, it is critical that we rein in the budget deficits we’ve been accumulating for far too long.”

According to the Labor Department, the number of persons without jobs has nearly doubled over the past two years to 15.3 million, or 10 percent of the workforce. In addition there are 2.5 million persons “marginally attached” to the workforce who the government doesn’t even count. Add in the 9.2 million forced to accept just part-time hours and the actual number of workers without full-time jobs is 27 million.

Among those hardest hit are Blacks, with a 16.2 percent unemployment rate, and teenagers, who face 27.1 percent unemployment. With declining capitalist production, 2.1 million manufacturing jobs have been cut over the past two years and 1.6 million in construction.

“We’re still facing years of mass unemployment,” wrote New York Times columnist Paul Krugman January 29, a fact widely acknowledged in capitalist ruling circles. “The latest projections from the Congressional Budget Office say that the average unemployment rate next year will be only slightly lower than the current, disastrous, 10 percent.”

Under the Obama administration’s jobs plan, $30 billion from the Troubled Asset Relief Program (TARP) bailout funds will be given to community banks to encourage them to make loans to small businesses. In addition, employers will get a $5,000 tax credit for each worker hired in 2010, with a limit of no more than 100 workers per company. Congress must pass this proposal.

The president is projecting the creation of 2 million jobs through doubling U.S. exports over the next five years to $2 trillion in 2015. No plans were offered on how this would be accomplished in a worldwide depression economy. White House officials have just said an export promotion cabinet would be set up.

Obama has also called for improving the nation’s infrastructure through the creation of “green” jobs, and $8 billion in grants toward building high speed train lines nationwide.

A report issued last year by the American Society of Civil Engineers on the crumbling U.S. infrastructure noted that it would take $2.2 trillion over five years to get the roads, bridges, levees, schools, water supply, and other infrastructure into decent shape.

Among those hailing Obama’s jobs program is AFL-CIO president Richard Trumka. “We were pleased to see that the President embraced two of the job creation proposals we have made—investing in infrastructure and helping small businesses get credit through TARP funds,” he said in a January 28 statement released to the media. The head of the federation made no attempt to present any independent labor program for jobs that the union movement could fight for. Instead he continued to tie labor’s prospects for coming out of the depression to the Democratic Party regime.

“How loud do the alarms have to get?” asked liberal New York Times columnist Bob Herbert January 23. “There is an economic emergency in the country… . and the politicians, including the president and his Democratic allies on Capitol Hill, seem not just helpless to deal with the crisis, but completely out of touch with the hardships that have fallen on so many.”

Herbert noted that from 2000 to 2008 “the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million.” A total of 91.6 million “fell below 200 percent of the federal poverty line, which is a meager $21,834 for a family of four.”  
Three-year spending freeze
In its budget proposals for fiscal year 2011 the Obama administration is also calling for a three-year spending freeze on many domestic programs. While the Pentagon, Homeland Security, Medicare, and Social Security are exempt from the freeze for now, federal funds to state and city governments will be cut, accelerating the pace of layoffs and reductions in social programs that state and local governments have already begun to implement.

The day after Obama’s speech, New York City mayor Michael Bloomberg, for example, said that under his budget proposal 11,000 of the city’s 79,000 teachers could have their jobs eliminated. Also on the chopping block are 20 fire companies, 15 senior centers, some city swimming pools, a 24-hour center for the homeless, and a halt to financing for 500 soup kitchens and food pantries. Library funds would be slashed and nurses in some elementary schools would be eliminated.

As the rate of unemployment remains high, earnings are being depressed. The Labor Department reported January 29 that wages and benefits for 2009 rose by just 1.5 percent, the lowest amount in 27 years. In 2008 they rose by 2.6 percent.
Related articles:
U.S. in ‘statistical recovery and a human recession’
Fight for a workers recovery  
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