New study says entire regions of US will remain in slump until the 2020s
TO
KEEP PROFITS SOARING, THE DEMOCRAT PARTY IN COLLUSION WITH THE GOP AND
WALL STREET, MUST STICK IT TO WHAT IS LEFT OF THE AMERICAN MIDDLE CLASS.
THAT MEANS ENDLESS HORDES OF ILLEGALS JUMPING OUR BORDERS, JOBS AND
WELFARE OFFICES!
New study says entire regions of US will remain in slump until the 2020s
By
Jerry White
21 March 2016
A new study by a University of California-Berkeley economist says that at current sluggish levels of job growth, entire regions of the
United States, which were hit hardest by the Great Recession will not
return to “normal” employment levels until the 2020s. This amounts, to
“more than a ‘lost decade’ of depressed employment” for “half of the
country,” wrote economist Danny Yagan.
The new study is one of many showing that the fall of the official
unemployment rate, touted by the Obama administration and the news media
as proof of a robust economic recovery, if not a return to “full
employment,” is largely based on the fact that millions of workers fell
out of the labor force in the years preceding and following the 2008
financial crash.
The labor-force participation rate fell to a 38-year low of 62.4
percent last fall, and only climbed up to 62.9 percent in February.
According to the Economic Policy Institute, February’s official jobless
rate of 4.9 percent—the lowest since the pre-recession level of 4.7
percent in November 2007—would really be 6.3 percent if the country’s
“missing workers” were included. These include 2.4 million workers who
have given up actively looking for work.
Yagan based his findings on a detailed study of some 2 million,
similarly paid workers in the retail industry in order to calculate
employment patterns across different local areas and to account for
occupations that might have been particularly hard hit in one region.
He found that the areas hardest hit by the recession, which began in
December 2007 and officially ended in June 2009, continued to have high
levels of joblessness in 2014. His map of these distressed areas
includes all of Florida and parts of Arizona, Nevada, California,
Colorado, New Mexico, the Dakotas, Michigan, Indiana, Ohio, Georgia,
Connecticut, New Hampshire and other states.
While different areas of the country are often hit differently by an economic downturn, an article in the Wall Street Journal
on Yagan’s study noted, these economically distressed areas generally
return to normal levels of employment chiefly because workers move to
find work in areas with a higher demand for labor. In the case of the
“Great Recession,” however, the mass layoffs resulted in “muted
migration,” according to other studies cited by the Journal, and workers simply fell out of the labor market.
“Unlike the aftermath of the 1980s and 1990s recessions,” Yagan
wrote, “employment in hard-hit areas remains very depressed relative to
the rest of the country.” Living in areas like Phoenix, Arizona, or Las
Vegas, Nevada means confronting “enduring joblessness and exacerbated
inequality,” Yagan wrote. “If the latest convergence speed continues,
employment differences across the United States are estimated to return
to normal in the 2020s—more than a decade after the Great Recession.”
The lack of decent job opportunities in large swathes of the country
has created a reserve army of unemployed and underemployed workers who
are competing for a shrinking number of jobs in areas that are more or
less permanently distressed. Last month’s Labor Department employment
report noted that the average annual unemployment rate in 36 states,
plus Washington, D.C. was higher in 2015 than the average unemployment
rate for those states in 2007.
The majority of unemployed people in the US do not receive
unemployment insurance benefits, according to the National Employment
Law Project, with just over one in four jobless workers (27 percent), a
record low, receiving such benefits in 2015.
The details of these studies will come as no surprise for tens of
millions of workers across the United States who face unprecedented
levels of economic insecurity, ongoing mass layoffs, and more than a
decade of stagnating or falling real wages. This has fueled the growth
of enormous discontent and the initial stirrings of class struggle by
American workers, which the trade unions and both big business parties
have sought to channel in the direction of economic nationalism and
hostility to workers in China, Mexico and other countries.
In fact, US workers are being subjected to the same attacks as
workers around the world. The reports on the employment situation in the
US coincide with a continual massacre of jobs in the world’s steel, oil
and mining industries, with 1.2 million steel and coal mining jobs
targeted for destruction in China alone.
Continual layoffs in the US have been driven by the plunging price of
steel, petroleum, coal and other commodities, which has been generated
in large measure by the fall in demand from China and other so-called
emerging economies. Last week, St. Louis, Missouri-based Peabody Energy,
the largest coal mining company in the world, announced it could soon
file for Chapter 11 bankruptcy, after its share values fell 46 percent
over the last six months.
Peabody has already cut 20 percent of its global workforce since
2012, while spinning off large sections of its operations in order to
cheat retirees out of their pensions. The company’s announcement follows
bankruptcy filings by both Arch Coal and Alpha Natural Resources and a
similar threat from coal mining giant Foresight Energy. In its press
release, Peabody pointed to the collapse in the coal market, where the
price per ton has fallen to $40 from $200 in 2008.
The steel industry continues to wipe out jobs, with 12,000
steelworkers already laid off or facing imminent job cuts. The largest
US steelmaker, US Steel, has slashed thousands of jobs in Texas,
Illinois, Ohio, Indiana and Pennsylvania. The aluminum giant Alcoa is
just weeks away from closing its smelter in Warrick County, Indiana,
wiping out another 600 jobs. Meanwhile, the United Steelworkers (USW)
union is pushing for protectionist measures against China, Brazil,
Russia and other countries, even as it pushes through concession-laden
contracts at US Steel, Allegheny Technologies and now ArcelorMittal.
Early last year, the USW betrayed the strike by thousands of oil
refinery workers, blocking any struggle against the brutal restructuring
of the industry that is now underway. The plunging of oil prices
triggered more than 258,000 layoffs in the global energy industry in
2015—with the number of active oil and gas rigs in the US falling 61
percent. Analysts anticipate a new round of job cuts and bankruptcies in
early 2016.
Texas has lost 60,000 energy-related jobs alone, or one-fifth of the
workforce in that sector in the state, with North Dakota and
Pennsylvania also being hard hit. The current US unemployment rate for
the oil, gas and mining sector is 8.5 percent, but could top 10 percent
by February, double the national jobless rate.
Last month, the air conditioner maker Carrier announced it was
eliminating 1,400 jobs at its Indianapolis plant and a nearby facility,
and shipping production to Monterrey, Mexico where wages are
approximately $6 an hour. A video shot by a worker, capturing the
explosive anger at a meeting of plant workers when a manager makes the
announcement, has been viewed millions of times.
Far from organizing any resistance to the closure of the factory and
destruction of jobs, however, the USW is collaborating with United
Technologies Carrier management to carry out an orderly shutdown and the
retraining of displaced workers for lower-paying jobs.
The USW is hostile to any fight to unite American workers with their
brothers and sisters in Mexico, who have been engaging in growing
resistance to the exploitation by the transnational corporations. USW
officials are telling workers to rely on the Democratic Party to
implement protectionist trade measures to “save jobs” and “take our
country back.” Local and regional union officials have had nothing but
kind words about Donald Trump’s efforts to swindle workers with economic
nationalist appeals.
The unions have long used economic nationalism to undermine the
class-consciousness of workers and to promote the corporatist outlook of
“labor-management partnership.” In the name of making the corporations
“competitive,” the USW and other unions have suppressed every struggle
against plant closings, job cuts and the destruction of wages and
benefits.
This has coincided with the political subordination of workers to the
Democratic Party, which under the Obama administration has spearheaded
the attack on workers’ jobs and wages and the historic transfer of
wealth from the bottom to the top.
USW Local 1999, which claims to represent Carrier workers, is urging
them to support Democrat John Gregg for Indiana governor. A former land
agent for Peabody Coal and lobbyist for Amax Coal Company, Gregg served
as the honorary chair of Hillary Clinton’s 2008 campaign in Indiana, and
was a proponent of austerity and corporate tax cuts while Speaker of
the state Legislature.
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