Once again, the job numbers are dismal. In January, the U.S. economy created just 36,000 domestic jobs, far below the roughly 145,000 that economists had forecast. The unemployment rate fell, to 9 percent, but only because more and more discouraged workers are giving up and leaving the workforce.
The U.S. still has a jobs gap of about 14 million jobs, and that number is increasing as the labor force grows. Counting people who’ve given up, or who are working part time when they want full time jobs, the real unemployment number is around 17 percent. America now has about 25 million people either out of work or underemployed.
Meanwhile, corporate profits continue to set records. Profits in the third quarter of 2010 were 1.659 trillion, about 28 percent higher than a year before, and the highest year-to-year increase on record.
What’s going on? Very simply, America’s corporations no longer need America’s workers.
As Harold Meyerson documents in a brilliant piece for The American Prospect, our most admired corporations — GE, Apple, Hewlett Packard, Intel — are creating ever more jobs overseas and relatively fewer at home. This has the double benefit of taking advantage of cheap labor abroad and disciplining workers to accept low wages at home. Along with the high unemployment rates have come declining earnings. Meyerson writes:
“In 2001, 32 percent of the income of the firms on Standard & Poor’s index of the 500 largest publicly traded U.S. companies came from abroad. By 2008, that figure had grown to 48 percent.”
This record contrasts dramatically with that of the right’s favorite whipping boy — Western Europe. Germany is gaining jobs at a rapid clip. Its industrialists are committed to producing at home, and just in case they get ideas of making outsourcing a way of life, they have strong unions who negotiate agreements on where production is located.
Germany’s labor costs are the highest in the world, but Germany nonetheless runs the world’s largest export surplus — 7 percent of GDP — while America runs chronic trade deficits.
Barring drastic policy changes, our jobless recovery is likely to continue. There are three parts to the problem.
First, while the economy is still in deep recession, both the administration and its Republican critics are already talking about steeper budget cuts. President Obama talks a good game about infrastructure spending, but it’s hard to see where the funds will come from as deficit hawks in both parties prevail.
Among the several things conservative Republicans have declared “job killers” are unions and any kind of public health care program, yet countries that are weathering the world recession pretty well such as Germany and japan have stronger labor unions and public health care plans (and retirement plans). They are also kicking our ass in automotive innovation and consumer electronics. That old sally Field movie called Norma Rae where she holds up the sign that says union. Very inspiring. China makes most of the towels and sheets produced in plants like the one Rae worked in. One thing that somewhat puzzles me is America’s business community’s lack of loyalty to the USA. Many of them come across as super patriots who wear their flag pins for photo ops and talk about America being the greatest country in the world as they simultaneously do everything in their power to destroy the middle-class. Even more puzzling is the middle-class keeps voting for politicians – mostly, though not exclusively Republicans – who are no more than water carriers for the businesses exporting core middle-class jobs to Asia.