Despite claims of an economic recovery, 50,000 people showed up in downtown Detroit seeking applications for assistance with utility bills and mortgage payments. The political leaders in the U.S. have failed to stem the crisis while millions suffer daily.
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Gallup Poll shows gov’t hides real figures
By Fred Goldstein
Published Mar 3, 2010 9:29 PM
A Gallup Poll released on Feb. 23 revealed that in January 30 million workers in the U.S. were either on forced part-time or out of work altogether. This number, based on a poll of over 20,000 adults over the age of 18 and conducted from Jan. 2 to Jan. 31, amounts to 20 percent of the workforce.
Conducted by one of the most prestigious and conservative polling institutions in the capitalist world, the poll used samples taken from all regions of the country and all age groups.
No wonder this poll was barely mentioned in the big-business press. It shows that the government is undercounting millions of workers who suffer from the unemployment/underemployment crisis. It documents, at a minimum, that the statisticians in the Bureau of Labor Statistics and the National Bureau of Economic Research have been dishonest about the true level of unemployment.
This Gallup Poll also shows the racist disparities that have been made worse by the economic crisis. It reveals African-American and Latino/a underemployment to be 27 percent and 29 percent respectively, compared to white underemployment at 17 percent. There was nothing revealed about immigrant workers, but other studies have shown a drastic increase in underemployment among undocumented workers in particular, especially those in the construction industry.
According to government agencies, the level of what is called “total unemployment,” a measurement called U-6, is only 16.5 percent, not the 20 percent revealed in the Gallup Poll.
To make things worse, it is important to know that the official government number for “total unemployment” includes not only workers who are unemployed plus those who are forced to work part time when they need a full-time job, but also those who have dropped out of the workforce because they have given up looking.
According to AOL News online, “What’s striking about the Gallup numbers is that the polls didn’t even include people out of work so long they are no longer counted in the workforce.” In the month of January, according to the government, 1.1 million workers were officially classified as “discouraged workers.”
Thus the Gallup Poll itself is an undercount if the official government number of 1.1 million workers who have given up looking for a job is added to the 30 million compiled by Gallup.
4.4 million workers drop out
Yet the government coverup is even wider than would appear from the Gallup Poll. The Economic Policy Institute, whose former head, Jared Bernstein, is the chief economist and economic policy adviser to Vice President Joseph Biden, says: “Since the recession started in December 2007, the labor force — people who are either working or seeking work — has declined by 700,000 workers, even though the working-age population has increased by 3.7 million. The shrinking labor force is largely a reflection of discouragement with the labor market; as jobs have become scarce, many job seekers have given up looking for work.”
Thus, according to the EPI, almost 4.5 million workers have dropped out of the work force, not the 1.1 million counted by the government. And among those who have dropped out, a drastically high proportion are youth. The labor force participation rate for workers age 16-24 has decreased from 59.1 percent to 54.7 percent in the 25 months since the recession started, representing a loss of 1.3 million young workers. In the Gallup Poll, people ages 18 to 29 had the highest level of underemployment, at 31 percent.
On the other end of the age scale, people over 55 have increased their workforce participation because they cannot afford to retire. In their senior years they wind up working, often forced to compete with youth for low-paying jobs.
Under “normal” conditions of capitalist exploitation — i.e., in between boom-and-bust crises, when jobs are more available — youth, and especially Black, Latino/a, Asian and Native youth, have the highest unemployment and the lowest wages. Now that there is a capitalist crisis, the crisis for youth has become massive.
The talk of “recovery” for workers of all ages is a myth. The only recovery is for the bosses, and for the biggest and richest ones at that.
The talk of a decline in layoffs was contradicted at the end of February by the announcement of a rise in first-time claims for unemployment insurance.
Unemployment claims rise, home sales drop
In its report on jobless claims on Feb. 25, the Labor Department said first-time claims for unemployment benefits rose 22,000 to a seasonally adjusted 496,000. Wall Street analysts had expected a drop to 455,000.
The four-week average of jobless claims rose 6,000 to 473,750. The average had fallen sharply over the summer and fall from its peak last spring of about 650,000. This year, the improvement has stalled. The four-week average has risen about 30,000 in the past month. It’s now well above the 425,000 level that many economists said would signal net hiring. It is a commentary on U.S. capitalism that the layoff of 425,000 workers in one week would be considered a “positive” signal of net hiring.
Furthermore, new-home sales dropped 11.2 percent in January, the largest drop in more than 50 years. A drop in new home sales spells further layoffs for construction workers.
One of the causes for the drop is the massive number of foreclosures as speculators and even some individual home buyers try to get bargain-basement prices by picking from the millions of foreclosed homes. But even with that, existing home sales dropped 7.2 percent in January.
More foreclosures are coming by the hundreds of thousands as unemployed workers cannot afford to keep up their mortgages, and even those who are employed are “underwater” — i.e., they owe far more than their homes are worth on the market.
The banks and lenders will not adjust loans, will not suspend payments for the unemployed, and are ruthlessly trying to squeeze every last nickel out of homeowners. Millions more foreclosures are in the offing unless the masses of people unite and demand an end to foreclosures and evictions.
To the 30-million-plus workers with no jobs or part-time jobs, with no health care plan, no pensions, no benefits, no vacations and the unbearable economic pressure of trying to stay afloat, the very idea that the economy has been “recovering” for six months must sound like a cruel joke.
Who will buy the goods?
One question that needs to be asked is what prompted the Gallup organization to undertake such an extensive poll? The contradictory numbers coming out of government offices and from the Obama administration have probably made sections of the ruling class nervous. Investment advisers, corporate economic forecasters, even economic policy advisers, have a large stake in getting reliable information about the economy. The ruling class cannot rely on the government agencies alone, which are bound to understate the seriousness of the situation for political reasons.
One of the few details made public in the recent Gallup Poll was how much less money was being spent in the market by underemployed workers, compared to those employed. The discrepancy between a supposed spending average of $75 a day for the employed compared to $48 a day for the underemployed, even if exaggerated, is a hard fact for those authorities to contemplate when considering the prospects for a capitalist “recovery.”
The public heard little of the poll and most of the information gathered was kept private, undoubtedly for the eyes of the ruling class and their advisers.
But the ruling class is teetering between recovery and renewed capitalist crisis. Everyone knows that the stabilization of the capitalist economy, the temporary halt to the downward spiral of the economic and financial crisis, was predicated upon the massive bailout of the banks and the stimulus to the economy.
The conventional calculations are that anywhere between 1.5 million and 2 million jobs were created or saved by the stimulus package of $787 billion. The stimulus money is supposed to run out in the middle of 2010. Credit for first-time home buyers has now been extended to those who have previously purchased homes.
The government and bosses and bankers are waiting to see what happens when the stimulus money and the incentives run their course. Everyone is holding their breath hoping that the limited capitalist expansion now underway will keep going.
But the ruling class has a fundamental contradiction in the present crisis. It is making a profit recovery based on layoffs and intensifying the exploitation of the remaining workers. No recovery can be sustained on that basis. Only renewed crisis can be the outcome of this course.
The working class, the oppressed, the communities, the students and youth, and all who are being victimized by this capitalist crisis must not hold their breath and wait for salvation to come from an economic recovery.
The only way out of this crisis for them is to organize and struggle with a fighting program. At the top of the agenda must be a demand for a government program that guarantees a job at a living wage with full benefits and the unhampered right to union representation for every worker who needs one.
The trillions of dollars being given to the banks, the corporations and the military can support such a program as well as guarantee a free quality education for all youth, from grade school to college.
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