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Vol. 75/No. 3      January 24, 2011

‘Post-recession’ joblessness
longest, deepest since WWII
(front page)
U.S. business profits are booming while growing numbers of working people face the prospect of long-term joblessness.

In the third quarter of 2010 annual corporate profits rose by $1.66 trillion. This is the seventh consecutive quarterly increase.

At the same time more than 21 million workers are without jobs. The official unemployment rate in December was 9.4 percent. This is the 20th consecutive month the official rate has topped 9 percent, “the longest such streak on record,” noted the Associated Press.

December’s jobless rate dropped from 9.8 percent in November. The decline, however, was not because more jobs were available, but because more workers were not being counted as part of the workforce. Those categorized by the government as “discouraged” topped 1.3 million in December, with 5 million other workers who want a job not counted.

U.S. government officials say the recession ended in June 2009. But massive joblessness is continuing much longer and deeper than coming out of any other recession since World War II. The last long jobs drought, from 2001 to 2004, was finally overcome after 47 months by the expansion of debt through massive housing and credit speculative bubbles. This is something few capitalists expect to see happen again soon. And jobs losses from the most recent recession are triple the 2 percent decline recorded in 2001.

According to government figures, a little more than 1 million jobs were created in 2010, making a small dent in the 8.5 million cut in 2008 and 2009. At this pace, “it would take 70 months—or until late 2016—to make up for the rest of the jobs lost,” stated the Wall Street Journal.

These figures don’t even account for the many new workers seeking jobs for the first time. “The U.S. labor force is now smaller than it was before the recession started,” economist Heidi Shierholz of the Economic Policy Institute told CNNMoney, “though it should have grown by over 4 million workers to keep up with working-age population growth over this period.”

U.S. companies are not planning to do much hiring. They’re already sitting on $1.8 trillion in cash reserves. They prefer to use this money to “make money” by speculating in stocks, bonds, currency, or derivatives, instead of investing in capacity-expanding plants and equipment.

At a Senate Budget Committee hearing January 7, Federal Reserve chairman Benjamin Bernanke insisted the economy was recovering but expected years of high unemployment. “It could take four to five more years for the job market to normalize fully,” he stated—“normal levels” being 5 percent to 6 percent unemployment prior to the onset of the latest recession.

The same day, President Barack Obama praised the economy for 12 straight months of private-sector job growth. “That’s the first time that’s been true since 2006,” he stated. This increase of 1.1 million jobs, however, is less than the number of “discouraged” workers who are no longer counted as part of the workforce over the same time period.

The president is considering further proposals to stimulate the economy, cut business taxes, and write off the costs of equipment and capital investments, in hopes of convincing bosses to hire workers. To further these objectives, he appointed Eugene Sperling the new director of the National Economic Council, the same job he had under President William Clinton. In addition, William Daley, another former Clinton appointee and top executive at JPMorgan Chase, is Obama’s new chief of staff.
Related articles:
Workers’ pensions on the chopping block
Most in U.S. now lack retirement fund  
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