Sept. 15, 2013

Shared Prosperity?
By Bill Spriggs 

(TriceEdneyWire.com) - The AFL-CIO recently held its quadrennial constitutional convention in Los Angeles. The convention had committees that included many nonunion partners to create an agenda directing the AFL-CIO toward a movement that can include the voices of all working people-those covered by collective bargaining agreements, those who are retired, those who are unemployed and those who work without the benefit of a union contract. Shared prosperity, the goal of the AFL-CIO, must be inclusive.

The challenge is huge. The U.S. Bureau of Labor Statistics (BLS) shows a labor market that isn't growing fast enough to provide shared prosperity. The payroll numbers that are released at the beginning of the month are preliminary. Additional data becomes available later. So, the payroll numbers are adjusted later. Recently, the preliminary numbers for June and July were both adjusted-downward. June was knocked down from 188,000 to 172,000, and July went from 162,000 to 104,000. That means the preliminary number for August of 169,000 needs to be interpreted with some caution. So, despite promising news of accelerating job growth that even reached 332,000 jobs in February; since April job growth is decelerating.

Slow job creation has continued the trend that started in the spring of 2009 of unemployed workers being more likely to exit unemployment by dropping out of the labor force than finding a job. And, that was clear in the household survey released by the BLS showing the unemployment rate fell because of a drop in the size of the labor force-those people who are employed or actively searching for work. And, among the employed, a discouraging sign is the growth of workers who could only find part-time work. In August, 2.7 million workers were in part-time jobs because they could not find full-time work, up from 1.1 million back during the labor market's last peak in January 2008.

The frustration of workers can be found in their declining job mobility. The BLS recently reported that the median tenure of workers with their employer continues to trend up and is now at 4.6 years. In part, this reflects the aging of the workforce-older workers tend to stay put with their employer, but it also reflects data in the BLS Job Opening and Labor Turnover Survey (JOLTS) showing that employed workers are not switching jobs. Those shifts also help create openings for other workers to fill; fewer shifts mean fewer job openings for unemployed workers to fill. In July there were 3.1 unemployed workers to each job opening, a slight uptick from June. Movement among employed workers shows a heated labor market, it helps workers shift to higher paying jobs, and it shows that firms are actively expanding trying to find highly productive workers. So, this helps to explain the low pressure on wage growth in the economy now.

And the quality of the jobs created has also been discouraging. Manufacturing, which helped to get the growth in jobs launched, has added only a net of 20,000 jobs of the 2.2 million created since August. On the other hand, retail trade has added 392,000 jobs and fast-food and restaurants has added 353,000 jobs. These are industries with lots of part-time and low-wage positions. The realization that these jobs may signify the new normal has made workers in these industries start to fight back. On Aug. 29, they staged walk outs demanding decent pay. Roughly 30 million workers languish at low pay while Congress fails to act on legislation that would raise the minimum wage to $10.10 an hour.

The AFL-CIO Convention heard from Economics Nobel Laureate Joseph Stiglitz that the problem the U.S. economy faces is simple: low aggregate demand. He said we could boost demand by raising wages and government investment. The current fixation of Washington on debt and deficits is a harmful divergence of time and political space from getting job growth back up and wages up. The gap between what the nation could produce at full-employment and where we are now with 58.6 percent of Americans employed, below the 62.9 percent during the peak in January 2008 and the 64.7 percent of April 2000, is the deficit policy must focus on closing.

The AFL-CIO Convention passed resolutions to create a new set of actions so the labor movement can respond to this environment where all workers are under attack-from negligence of their key issues of more jobs and higher pay to their rights at work and their rights to organize. Clearly the movement has to broaden itself to include the un-organized because only if workers are united can new policies be put in place to change the situation.

Americans are not suffering from the laws of economics; American inequality is exceptional. It is not possible to explain the level of American inequality using the theories of market supply and demand; the same forces of globalization and technological change affect all countries. But, American policies are unique. Low minimum wages, the lack of collective bargaining in wage setting and corporate governance that lets corporate CEO pay skyrocket are uniquely American.

The current level of inequality in the U.S. is bad economics. It is the creation of raw greed-market power, not market forces. The shrinking share of income for the bottom 99 percent is not a system that is healthy. And, it is not sustainable. Unless the deficit of jobs and wage incomes is addressed, it will fuel another downturn in the economy. If we understand the cause was inequality we can fix this economy, but if we continue to create more inequality we will break the economy. Shared prosperity, not this weak recovery, is what will get us to sustainable growth.

Follow Spriggs on Twitter: @WSpriggs.

Sept. 15, 2013

Cuts in SNAP: No Food for the Hungry
By Julianne Malveaux

(TriceEdneyWire.com) - Steven and Laurie, a White married couple that live near Richmond, Va., work at a big box store.  She as a cashier; he in the storeroom.  Each earns about $9 an hour but neither works 40 hours a week.  Indeed, they are lucky to pull 40 hours a week combined.  Sometimes weeks they are fortunate enough to pull 45 hours a week between them.  Some weeks their combined hours are just 30.  I met Steven and Laurie  (not their real names) on a telephone press conference back in April.  They said they had three children and also mentioned that they were white because “everybody thinks only black people get these benefits.”

Seven and Laurie were troopers.  They talked about buying clothes at thrift shops, searching for food bargains and planning menus around coupons, and managing to occasionally eke out a few pennies to buy occasional new things for their children.  They didn’t complain, but spoke matter-of-factly about their financial situation.  They also spoke of looking for new jobs, but fining little available in their community.

Because neither works enough hours, neither Steven nor Laurie qualified for health insurance.  Their combined incomes are so low – between about $16,000 and $21,000, that they are officially poor (the poverty line for a family of five is $27,540).  They qualify for food stamps, (called SNAP, or Supplemental Nutrition Assistance Program) and they consider them the blessing that helps them make ends meet.

Sometime this month, though, Congress will come up from the Syria conversation to, perhaps, cut allocations for SNAP.  The cut of $40 billion would deny between four and six million people food stamps.  The new legislation would also allow states to require SNAP recipients to work.  Some of the 12 million unemployed may not qualify for SNAP assistance, nor will childless adults who do not have work.  Some restrictions may also limit SNAP assistance to three months every three years.  While some states have waived SNAP requirements because of their high unemployment rates, federal legislation may prevent such waivers.

The proposed cuts in SNAP is twice those proposed back in May.  These cuts are being driven by Republicans who, in their budget cutting frenzy, have been indifference to poverty.  After all, the “p” word is used to infrequently in political debate, that one might think that poverty has magically gone away.  Or, perhaps our legislators just don’t care.

The people who receive SNAP assistance don’t conform to any stereotypes.  According to the Center for Budget and Policy Priorities, about twenty percent of those receiving SNAP have college degrees.  Half of the recipients are white.  A third of the women who get help from SNAP are over 40.  Fifty thousand of those who receive SNAP assistance are veterans.

So many families are food insecure because of the employment situation.  The unemployment rate dropped just a tick in August, slipping from 7.4 to 7.3 percent.  Still, there are 11.3 million unemployed people.  More than 4.3 million people have been unemployed for more than half a year.  These folks, still looking for work after more than 27 weeks, would be no longer eligible for SNAP assistance.

The unemployment rates, as reported by the Bureau of Labor Statistics, clearly understate unemployment.  When we count people who work part-time but want full time work, those who are marginally attached to the labor force, the overall unemployment rate rises from 7.3 percent to 14.6 percent.  The black unemployment, reported at 13 percent, soars to 26 percent, a depression level of unemployment.  It is undeniable that the unemployment rate is improving, with overall unemployment dropping from 8.1 percent a year ago to 7.3 percent today.  But the downward pace has been glacial, with the level of job creation (169,000) too slow to keep up with job loss.  Millions will remain unemployed for the next six months or so.

Against this backdrop Congress has the temerity to propose legislation that will deny millions of families SNAP benefits.  Their indifference to joblessness and poverty is amazing.  They’ve not exhibited similar indifference for those at the top, maintaining tax breaks for them.

Steve and Laurie struggle to make ends meet.  They are good, hardworking, and people just like millions of others. They work part time for economic reasons, preferring full time work.  They need food stamps, and it is not clear, under proposed legislation, whether they will qualify for them.  I worry about Steve and Laurie, and I also worry about the 11.3 million unemployed people, the 4.3 million who have not worked in half a year, and the two to four million families who will not qualify for SNAP.  Worry is not enough, though. 

This is yet another reason why a people's uprising is necessary.  The uprising must transcend race lines – it ought to reflect Dr. Martin Luther King’s Poor People’s Campaign.  Congress won’t change its indifference to the poor unless somebody makes them.

Julianne Malveaux is a DC based economist and author.

Sept. 15, 2013

Blackonomics

Economic Crime and Punishment          
By James Clingman   

(TriceEdneyWire.com) - We talk a lot about criminal justice and crime in the streets, especially among Black people.  Mass incarceration of Black men, disparate sentencing, private prisons, legal slavery inside prisons based on the 13^th Amendment, and all the other plagues that beset us vis-à-vis our criminal justice system and prison industrial complex, dominate our conversations regarding crime and punishment.  But, there is another take on crime that we often overlook or simply ignore; it’s the economic crimes we commit against ourselves.

Amos Wilson posed two questions in his book, Black on Black Violence: “Does the African American community, by continuing to permit itself to be ‘legitimately’ economically exploited by non-African-American communities thereby de-legitimize itself and permit itself to be criminalized while de-criminalizing its exploiters?  Has the African-American community – addicted to wasteful and nonsensical consumerism, with its unwillingness to invest its wealth and human resources in itself, in America, and uncommitted to controlling its own internal markets – contributed in no small way to the criminalization of its sons, to the increasing impoverishment of its children, to the violence which prevails within its households and neighborhoods?"

If you are familiar with Amos Wilson’s work, you know he wrote very long sentences, but I believe it was because he had so much to say (See the volume of work he compiled in Blueprint for Black Power), and he knew the urgency with which he had to say it.

Wilson’s questions are not only interrogatory, they are declarative as well.  They paint a dismal picture of who we are and what we are about when it comes to crime and punishment.  They suggest, of course, that Black folks are not taking care of our business economically, thus, actually causing much of the crime we lament in our neighborhoods.

It is indeed a crime to “allow” ourselves to be economically exploited, and we can be considered sick if we simply consume the products made by others but never invest in producing and purchasing products of our own.   We commit economic crimes against ourselves; our children commit violent crimes against one another; and we are collectively punished as a result of such crimes.  Are we able to break this vicious cycle of self-annihilation?

Our being both the perpetrator and the victim of the same economic crimes is totally unreasonable and just downright stupid.  We commit the crimes of waste and conspicuous consumption, and then we are punished because of it.  We refuse to develop, grow, and support our own businesses, and then we are punished by having to depend on someone else to fill our basic needs.  We fail to help provide jobs for our youth, and they end up committing crimes against us and one another, while their unemployment rate nears 50%. Economically, our own actions accuse us, indict us, convict us, and punish us.  How can we demand respect when we are begging others to fill needs that we can fill for ourselves?  What must our children think of us, as we show them we can’t take care of them?  Some of us don’t even know how to grow a tomato for our families, and we want “respect.”

There is no denying that many of us are doing well and “doing good” at the same time.  There are many conscious Black business owners across the country that are carrying probably 90 percent of the load for us by doing the right thing; they get up each day determined to help empower us in some way.  Hats off to them!  They certainly deserve our kudos.  But it’s the rest of our people, the vast majority of us, who are in jeopardy of falling off the economic cliff.

These are trying times.  We are in serious trouble, and far be from me to downplay that reality.  And it’s not about whether the glass is half full or half empty; this is about survival.  It’s not about what certain celebrities say, if that’s all they’re doing is talking.  It’s not about whose camp you are in when it comes to the President and his critics.  It’s not about hair weaves, gym shoes, soft drinks, the wives of whatever, the names of celebrities’ babies, conspiracies, corruption, the best singer, wall street bankers, al Qaeda, Syria, Iran, influential Blacks, leading Blacks, touchdowns, slam dunks, homeruns, games, sets, and matches.  This is about economic crimes and the resulting punishment that ensues to Black people because of our inappropriate behavior and the inordinate amount of time we spend on “nonsense", as Maria Stewart once said.

The situation we are facing is an ever widening gap between those who have a lot and are self-reliant, and those of us who are dependent upon and beholding to them.  Much of the information we allow to permeate our brains is meaningless, useless, non-recyclable trash.  The vicarious nature of many of our lives will profit us little. My suggestion is that, first, we drop down and send up some serious “knee mail,” and then get up and get to work to stop our own crimes and punishment.

Amos Wilson also said, “When the Black community squanders the economic inheritance of its own children while it fills to overflowing the coffers of the children of other communities…it gets the crime it deserves.”

Sept. 15, 2013

To Be Equal
New Fed Chair Must Be a Proponent of Main Street

By Marc Morial 

(TriceEdneyWire.com) - “The Federal Reserve Chairman is not only one of the most important economic policymakers in America, he or she is one of the most important policymakers in the world.” President Barack Obama

Welcome to the season of big decisions in Washington.  In the coming days, President Obama will have to decide whether to order a military strike against the Syrian regime for using chemical weapons against its own people.  Time is also running out for Congress and the Administration to agree on a budget to avoid an October 1 government shutdown, and lawmakers are on the line to raise the debt ceiling to keep the nation from defaulting on its financial obligations.  In the midst of all of this, the President must decide whom to pick for one of the most important jobs in the world – Chairman of the Federal Reserve.

“The Fed,” as it is commonly called, is the central bank of the United States, responsible for setting monetary policy and credit conditions in support of full employment and stable prices.  The Fed also supervises and regulates banks to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.  Ben Bernanke has held this job since 2006, one year before the start of the Great Recession.  While Bernanke is not without his critics, many believe his policies helped prevent another Great Depression and put the nation on the road to a steady, albeit much too sluggish, recovery.  The August jobs report shows the economy created 169,000 jobs last month, with overall unemployment now down to 7.3 percent.  This translates into 42 straight months of private sector job creation and a total of 7.5 million new jobs.  The economy is moving in the right direction.  But the 13 percent unemployment rate for African Americans and the 9.3% rate for Hispanics make it clear that even as the recovery inches forward, communities of color are still being left behind.

With Ben Bernanke’s term as Federal Reserve Chairman set to expire on January 31, 2014, President Obama must choose a successor who is committed to ending these inequalities while being acceptable to Main Street, Wall Street, and Capitol Hill – an almost irreconcilable team of rivals.  The President’s choices include former Treasury Secretary and Obama Economic Advisor, Larry Summers and current Fed Vice Chairwoman, Janet Yellen.

Opposition to Summers is intense, broad, and diverse.  Everyone, from Nobel Prize winning economist Joseph Stiglitz to the National Organization of Women to Maxine Waters and a growing list of members of Congress, has urged the President to pick Yellen over Summers.  As a leading architect of Wall Street deregulation during the 1990’s, Summer’s policies have been viewed as helping to pave the way to the Great Recession. A recent New York Times editorial concludes that “Mr. Summers has also shown an indifference to the effects of economic decisions on ordinary people.”

We urge the President to consider appointing someone who is more of a friend to Main Street than to Wall Street.  This includes, the highly-qualified Janet Yellen, who would be the first woman to lead the Federal Reserve.  It should also include other women, African American and minority economists who could bring both excellence and diversity to the Fed.

Marc Morial is president of the National Urban League.