This morning, I'm going to incorporate two pieces from today's NY Times into one post, since, as you'll see, they're essentially about the same topic: Bob Herbert's op-ed column, "
A Sin and a Shame," and Catherine Rampell's business lede on the front page of Saturday's paper, "
With Recovery Slowing, the Jobs Outlook Dims." Summing-up the combined messages of the two pieces into one sentence:
Underscored by the dimmest-and-still-getting-dimmer U.S. jobs outlook in generations, corporations are achieving record profitability, in large part due to their draconian approach to slashing U.S. headcount.
Today, IMHO, Herbert pinpoints the problem as he closes out his column...
A Sin and a Shame
By BOB HERBERT
New York Times Op-Ed
July 31, 2010
...There can be no robust recovery as long as corporations are intent on keeping idle workers sidelined and squeezing the pay of those on the job.
It doesn't have to be this way. Germany and Japan, because of a combination of government and corporate policies, suffered far less worker dislocation in the recession than the U.S. Until we begin to value our workers, and understand the critical importance of employment to a thriving economy, we will continue to see our standards of living decline.
NY Times Business Editor Catherine Rampell explains it all in the paper's lede, today...
With Recovery Slowing, the Jobs Outlook Dims
By CATHERINE RAMPELL
New York Times
July 31, 2010
There is no more disputing it: the economic recovery in the United States has indeed slowed.
The nation's economy has been growing for a year, with few new jobs to show for it. Now, with the government reporting a growth rate of just 2.4 percent in the second quarter and federal stimulus measures fading, the jobs outlook appears even more discouraging.
"Given how weak the labor market is, how long we've been without real growth, the rest of this year is probably still going to feel like a recession," said Prajakta Bhide, a research analyst for the United States economy at Roubini Global Economics. "It's still positive growth -- rather than contraction -- but it's going to be very, very protracted."
A Commerce Department report on Friday showed that economic growth slipped sharply in the latest quarter from a much brisker pace earlier, an annual rate of 5 percent at the end of 2009 and 3.7 percent in the first quarter of 2010. Consumer spending, however, was weaker than initially indicated earlier in the recovery.
Many economists are forecasting a further slowdown in the second half of the year, perhaps to an annual rate as low as 1.5 percent...
Meanwhile, Herbert tells us...
The treatment of workers by American corporations has been worse -- far more treacherous -- than most of the population realizes. There was no need for so many men and women to be forced out of their jobs in the downturn known as the great recession.
Many of those workers were cashiered for no reason other than outright greed by corporate managers. And that cruel, irresponsible, shortsighted policy has resulted in widespread human suffering and is doing great harm to the economy.
We learn in Herbert's column of an analysis of this nightmare by Andrew Sum, a Northeastern University economics professor and director of the Center for Labor Market Studies.
Summing up Sum (sorry, couldn't resist that one)...
In all of his years studying U.S. labor he's "...never seen anything like this." Millions of American workers were wantonly "thrown" off payrolls while millions more stayed on the job only to see their hours cut. He found quantitative evidence that...
"...the carnage that occurred in the workplace was out of proportion to the economic hit that corporations were taking. While no one questions the severity of the downturn -- the worst of the entire post-World War II period -- the economic data show that workers to a great extent were shamefully exploited..."
Sum noted that, at the end of 2008, corporate profits went into overdrive and then continued to grow into the first quarter of this year, to the tune of $572 billion. Meanwhile, during the same period, U.S. workers' wages and salaries dropped by $122 billion.
He also noted that, over the past three years, we've witnessed, "...the most lopsided gains in corporate profits relative to real wages and salaries in our history." Continuing on this theme, he labelled it a phenomenon that "...had never been seen before in all the decades since World War II."
Shifting over to Ms. Rampell's lede, we're informed that things are projected to get worse for the American worker in coming months, and for the jobs situation, in general. Focusing upon a couple of themes I discussed in yesterday's diary, as well as my post from Wednesday, we're ending the 8- and/or 9-month "inventory restocking" phase of our "jobless recovery" and most of the government's fiscal stimulus measures have expired or are expiring.
Rampell quotes Christina Romer, chairwoman of the president's Council of Economic Advisers:
"We need 2.5 percent growth just to keep the unemployment rate where it is...If you want to get it down quickly, you need substantially stronger growth than that. That's what I've been saying for the last several quarters, and that's why I've been hoping that we'll please pass the jobs measures just sitting on the floor of Congress."
However, even with the unlikely passage of a modest jobs measure(s) sitting on the floor of a Congress where practical politics (playing hardball with obstructionist Blue Dogs and Republicans) tells us we have to struggle just to keep the unemployed from being forced out into the streets, we're talking about only a small fraction of a solution comprehensive enough to reasonably and fully address our nation's unemployment problems.
Rampell notes that, "...businesses seem to be investing more in equipment than in hiring."
She also picked-up this trenchant quote from John Ryding at RDQ Economics, "...you can understand that businesses don't have to pay health care on equipment and software, and these get better tax treatment than you get for hiring people..."
At this point, I hope you'll take the time to read these two articles, discussed herein, in their entirety. (Links are at the top of the diary.) Together, IMHO, they provide a very good, 360-degree snapshot of where things stand, today, with regard to our economy and our workforce.
And, as far as my overall sentiments on these critical matters are concerned, I'll leave you with Herbert's closing paragraphs from his previous column, from this past Tuesday: "Long-Term Economic Pain."
Long-Term Economic Pain
By BOB HERBERT
NY Times
July 27, 2010
...Policy makers seem bewildered by the terrible economic state of ordinary working Americans, including those once considered solidly in the middle class. Despite warnings back in 2008 that we were on the verge of another great depression, the big financial institutions and corporate America seem to be doing just fine now. But average Americans are hurting with no end to the pain in sight.
More than 14 million people are out of work and many more are either underemployed or so discouraged they've just stopped looking. Big corporations, sitting on fat profits even as the economy continues to struggle, have made it clear that they are not interested in putting a lot more people back to work any time soon.
Policy makers have dropped the ball completely in terms of dealing with this devastating long-term trend of ever-increasing economic insecurity for American families. Long-term solutions that have to do with extensive job creation and a strengthening of the safety net are required. But that doesn't seem to be on anyone's agenda.
As I've been repeating it for weeks, "In an era of converging emergencies, the concept of incrementalism is inherently flawed because, in many instances, it incorrectly assumes that we have TIME to affect change, incrementally."
Expressing my sentiments even more simply: "How does one effectively sell the political concept of incrementalism to a voter that's unemployed, homeless and primarily focused upon where they're getting their next meal?"
(And, if you think this last sentence is an exaggeration of our Party's political reality in 2010, I would respectfully suggest that you get out more often.)