U.S. government officials announced that the deepest recession since World War II ended in June 200920 months ago. But the large number of jobs the bosses eliminated have not been replaced. In 2008-2009, 8.5 million workers were fired from their jobs, some 6 percent of the workforce. Yet in 2010 only 1.1 million jobs were added, according to the U.S. Department of Labor. This is less than the number of workers who entered the labor force for the first time.
In a speech at the National Press Club February 3, Federal Reserve chairman Benjamin Bernanke asserted that a self-sustaining recovery in consumer and business spending may be taking hold. He pointed to data showing that households increased their spending by 4.4 percent in the fourth quarter last year.
In January service industries grew at the fastest pace since August 2005, and auto sales at GM and Chrysler increased by more than 20 percent over the previous month. At the beginning of February the Dow Jones Industrial Average closed above 12,000 for the first time since June 2008.
U.S. factory orders have risen for five of the past six months, increasing by 0.2 percent in December. But they remain far below the December 2007 level.
This increase in production occurs with most companies deciding not to hire new workers or rehire many of those who had been laid off. Instead, bosses are driving their current workforce harder through speedup and attacks on workplace safety. Productivity was up 3.6 percent in 2010 and 3.5 percent in 2009. In 2010 labor costs fell 1.5 percent after a similar decline in 2009, boosting company profits. This is the first time since 1962-63 that unit labor costs fell in two consecutive years, noted the Wall Street Journal.
In manufacturing the productivity rate was even higher, at 6 percent through 2010. At the same time workers wages have been stagnant. Over the past year household incomes increased by just 1 percent, according to a Labor Department report. The small wage gains have essentially been wiped out by rising prices, especially for food and energy.
Unable to get full-time job
About one out of every six U.S. workers is unable to get a full-time job. Besides the officially unemployed theres a high number of discouraged workers, who the government does not count as part of the workforce, as well as more than 8 million who can only find part-time work.
Signs of a recovery have not affected long-term unemployment, which remains at a record-high level. Nearly 44 percent of those on the unemployment rolls have been without a job for more than six months.
The bosses are taking advantage of this situation to extract deeper concessions in wages and benefits. Between 2007 and 2009, around a third of those workers who held full-time jobs for more than three years and then succeeded in finding new full-time jobs did so at wages that were on average 20 percent below the wages they received in previous jobs, wrote Desmond Lachman of the American Enterprise Institute in The American.
The article concluded, If President Obama is serious about economic change, little time should be lost in addressing the stagnating living standards of the American worker that threaten to undermine social cohesion in the country.
The governments official unemployment rate for January is 9 percent, down from 9.4 percent in December, even though a separate report said that employers added only 36,000 jobs last month. The lower jobless rate comes in part from a new estimate of the size of the U.S. population. The report says it declined by 347,000, meaning those with jobs are a higher percentage of the workforce than if the previous population figure was used.
U.S. govt abets states in cutting health care
California governor aims to slash social programs
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