The December employment report
released Friday by the US Labor Department reflects an economy mired in crisis.
It shows that five years after the official onset of recession and three and a
half years after the recession’s official end, the US has failed to generate a
recovery in jobs and incomes for the vast majority of the American people.
US non-farm payrolls saw a net
increase of 155,000 jobs, somewhat lower than economists’ projections and
barely sufficient to keep pace with the normal monthly growth of the
working-age population. The official unemployment rate was set at 7.8 percent,
the same as the rate for November, which was upwardly revised from 7.7 percent.
The net increase in jobs in
December was in line with the monthly average for 2012 of 153,000. At that
rate, according to various estimates, it will take between 7 and 12 years to
return to the employment levels that prevailed prior to the start of the
recession in December of 2007.
The number of unemployed people
actually rose by 164,000 to reach 12.2 million. More people -192,000 - entered
the labor market, but the number of people with a job rose by only 28,000.
Fewer than one in five unemployed
workers found a job last month, and the total number of jobs remained 4 million
below the peak at the start of 2008.
Some 22.7 million people were
either unemployed or “underemployed” in December, meaning they were jobless or
working part-time but wanting a full-time job. The broader official jobless
rate -including those who are unemployed, underemployed or wanting work, but
not actively looking because they have become discouraged - was 14.4 percent.
Long-term unemployment (jobless for
27 or more weeks) remained at post-World War II record levels. Some 39.1
percent of the 12.2 million unemployed - 4.8 million people - have been out of
work for more than half a year.
According to the National
Employment Law Project, more than 6 million workers have totally exhausted
their unemployment benefits since the recession began in December 2007, and
that number will continue to climb as a result of a reduction in the duration
of federal extended jobless benefits brokered by the Obama administration last
February and cuts in benefits being imposed at the state level.
The New York Times quoted John
Ryding, chief economist at RDW Economics, as saying, “Job creation might firm a
little bit, but it’s still looking nothing like the typical recovery year we’ve
had in deep recessions in the past… We’re a long way short of the 300,000 job
growth that we need.”
The response of the Obama
administration to the Labor Department report was predictable. As in previous
months, administration spokesmen oozed complacency and indifference in the face
of a social disaster that is engulfing ever-wider layers of the population.
Alan Krueger, chairman of the White
House Council of Economic Advisers, said the report provided further evidence
that the US economy “is continuing to heal from the wounds inflicted by the
worst downturn since the Great Depression.”
Secretary of Labor Hilda Solis
declared, “For nearly three years, steady gains have occurred across different
sectors of the economy, and December finishes a strong year of consistent
growth.”
These statements make it clear that
the administration has no intention of proposing policies to address the worst
jobs crisis since the Great Depression or the growth of poverty, hunger and
homelessness resulting from that crisis. Instead, it will continue to focus its
efforts on protecting and expanding the wealth of the corporate-financial
elite. Central to that effort is keeping unemployment at historically high
rates so that big business can use the scarcity of jobs to drive down wages and
working conditions.
A major factor in the continuing
crisis is the attack on public sector jobs, which continued in December. While
private-sector payrolls grew by 168,000, federal, state and local payrolls fell
by a net 13,000.
Since the recession officially
ended in June of 2009, the public sector has lost 645,000 jobs -including
21,000 federal, 102,000 state, and 522,000 local jobs, with most of the local
losses in education.
New York Times economic columnist
Floyd Norris placed the unprecedented assault on public jobs under Obama in
historical perspective in a blog post on Friday. He pointed out that there were
697,000 fewer government jobs in December than at the end of 2008, a decline of
3.1 percent. This was “by far the largest four-year decline in government
employment since the 1944-48 term,” when government jobs plunged after the end
of World War II. The only other post-1948 four-year decline was during Reagan’s
first term, when public jobs fell 0.6 percent.
Norris noted that the December jobs
figures showed there were 725,000 more private sector jobs last month than at
the end of 2008, a gain of only 0.6 percent. Taking into account the massive
decline in public jobs, the total number of people with jobs in the United
States today is up by a paltry 28,000—or 0.02 percent—from four years ago.
The assault on public jobs, bound
up with brutal cuts in social services and programs, will only intensify as
Obama focuses his second term on cutting basic entitlement programs such as
Medicare, Medicaid and Social Security in the name of deficit-reduction.
There are many indications of
stagnation and likely decline in the private sector as well. Retailers cut
11,300 jobs in December, further evidence of depressed holiday sales.
The retail giant Target reported
Thursday that its sales in December were flat, and Macy’s said it would close
six stores in 2013. Bookseller Barnes & Noble reported a 10.9 percent fall
in sales at its stores and on its web site in the nine-week holiday period to
the end of December.
Sales at stores open for at least a
year rose on average 2.3 percent in December among 19 retailers that reported
figures on Thursday, according to Thomson Reuters. This is well below the 3.5
percent figure for December 2011.
The tepid holiday sales reflect the
mounting economic distress of working families across the country. Meanwhile,
the banks, corporations and speculators are celebrating record profits and
bulging stock portfolios. They are benefiting from government policies designed
to push up stock prices and subsidize Wall Street even as the real economy
continues to flounder and the living standards of the broad masses of people
continue to fall.
In particular, the Federal Reserve
is pumping nearly $100 billion into the financial markets every month and
holding interest rates down to near-zero, effectively handing the banks free
money, with no strings attached. The banks, for their part, are using the money
to make super-profits from various forms of speculative activities, while
refusing to invest in job-creating productive ventures.
In an article published last week
and headlined “Can Bank Stocks Continue to Party in New Year?” the Wall Street
Journal noted that the financial sector of the Standard & Poor’s 500 stock
index soared 25 percent in 2012, more than twice as much as the overall S&P
500 index.
Bank of America stock rose 104
percent, Citigroup jumped 48 percent, and JPMorgan Chase, Wells Fargo, Goldman
Sachs and Morgan Stanley each racked up increases of 23 percent or more.
