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The Political Difference Between 7 and 23

Trey Smith

The White House, and most headline writers around the country, are crowing that the November jobless rate of 7.0%, reported Friday by the Bureau of Labor Statistics, is the lowest since 2009 when President Obama took office, when it was 7.3% and rising.

But is this number really something worth cheering?

Not if you look behind it.

That 7.0% number is the BLS’s so-called U3 figure, which is the percentage of the labor force currently unemployed, and it is significantly lower than the figure for November 2012, which was 7.8%. But U3, known as the “official unemployment rate,” doesn’t really count everyone who is unemployed. It doesn’t include, for example, anyone who has even one hour a week of work, or who has not had a job for more than six months, or who in despair has given up looking.

A better number to look at, in terms of getting a true picture of the health of society and the economy, is the BLS’s U6 number, which also counts as unemployed those who are “marginally attached to the labor force,” meaning discouraged people who are not working and have given up looking for work, but who told BLS interviewers that they have looked within the past year and would take a job if one were available. U6 also counts as unemployed those who are currently working part-time for “economic reasons,” meaning that they want full-time work but cannot find it.

The U6 measure of unemployment for November is 13.2%, and while that too is down from 14.4% in November 2012, it is historically very high. Furthermore, as the analytical website ShadowStats points out, even U6 doesn’t tell the whole story. The BLS U6 figure, as ShadowStats’ John Williams notes, doesn’t count long-term discouraged workers -- people who have given up trying to find work because they cannot find a job. This group was “defined out of existence” by the BLS during the Clinton presidency in 1994. You can understand why that was done: adding these people to the total gives a current unemployment rate of a whopping 23% -- a number that, unlike the U3 and even U6, has been continuing to rise since the start of the so-called Great Recession in late 2008, even through the last four years of “economic recovery.”
~ from BLS 7% Jobless Rate for November is Nothing to Cheer About by Dave Lindorff ~

In the past, I have shared with you numerous snippets from Paul Craig Roberts who, like Lindorff above, draws attention to the work of John Williams at ShadowStats. It is not that Williams is some sort of magician or soothsayer; he merely takes the time to pore through the government's own data. Sadly, the mainstream media doesn't follow suit!

Because the mainstream media either is patently lazy OR they simply are in bed with the governmental elites, they continue to trumpet figures that don't do much justice to the situation.

Let's be honest here. Pretending that only 1 in 14 workers is unemployed is a far cry from admitting that it's really more like 1 in 4. But doctoring statistics has become the norm in this political climate. Bush did it and the Democrats decried it. Now Obama does it and the Democrats are silent.

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The Twiddling of Young Thumbs

Trey Smith

One of the mantras of conservatives is personal responsibility. One of the ways that young people learn about the utmost importance of personal responsibility is through work. Often, this key life lesson is instilled in young people by their first employers. Work hard in a responsible manner and you can get ahead!

With all the emphasis conservatives place on personal responsibility, hard work and good morals, you would think that helping young people land those first jobs would be damn important. Well, apparently not!

For the fourth consecutive summer, teen employment has stayed anchored around record lows, prompting experts to fear that a generation of youth is likely to be economically stunted with lower earnings and opportunities in years ahead.

...In 1999, slightly more than 52 percent of teens 16 to 19 worked a summer job. By this year, that number had plunged to about 32.25 percent over June and July. It means that slightly more than three in 10 teens actually worked a summer job, out of a universe of roughly 16.8 million U.S. teens.

And why are teens finding it so difficult to find gainful employment? Because, with good jobs harder and harder to find, adults are taking the jobs that teenagers used to get. So, it seems to be a bad picture all around.

"Made in America" Soon Won't Mean Made in America

Trey Smith

Don't like the trade deficit, low GDP and the public outrage over the offshore outsourcing? Change the accounting method to make it go away! Such is the agenda of government statisticians it appears. How they are going to incorporate statistical lies into national accounts is shocking. Production location no longer matters, the thing that will count is ownership of the final product.

We have a new definition, Factoryless manufacturing. Did you know we can have U.S. manufacturing without actually making any goods in the United States? That's the plan to count corporations and their products who are located in the U.S. but offshore outsource their manufacturing abroad as part of the U.S. manufacturing base. Get that?

Factoryless” manufacturers, as defined by the U.S. OMB, perform underlying entrepreneurial components of arranging the factors of production but outsource all of the actual transformation activities to other specialized units.

Right now, iPhones are counted as imports and rightly so. Apple has offshore outsourced manufacturing and final assembly to China. Most parts are not manufactured in the United States and components come from China, Japan, South Korea and Germany. Very obviously an iPhone is no more American than that cheap plastic good marked Made in China.

Yet if the government statistical agencies have their way, that iPhone will be an American manufactured good, despite the fact that 1 million Chinese made the thing while Apple does not provide Americans jobs of scale and maintains their strong profit margins.

The target date for this statistical fraud is 2017. There is a Factoryless Production Group, involving all of the statistical agencies, working out the incorporation to count offshore outsourcing as U.S. manufacturing.
~ from America's Outsourcers to be Reclassified as Manufacturers by Robert Oak ~

Sigh.

I get tired of reporting how the Obama administration (and the Bush administration before it) is undertaking these strong efforts to "cook the books", but it seems like a new one is revealed every month or so. It continues to remind me of Orwell's Nineteen Eighty-Four! Official language keeps getting reinvented to hide vital information.

If this change is implemented -- I don't see why it wouldn't be -- then the "Made in America" label won't mean a damn thing! If it no longer has a substantive meaning, then it will encourage those companies who still manufacture products in America to reconsider that strategy.

Why pay American workers x, when you can pay foreign wage-slaves y?

Why put up with certain environmental regulations here, when you can bribe some impoverished nation to look the other way?

Why worry about complying with health and occupational safety rules, when you can ship the jobs to a place where those same rules are more lax or nonexistent?

What will the incentive be to make anything in America anymore?

The Chief [Not So] Hidden Corporate Subsidy

Trey Smith

Low-wage workers can't even care for their own health without giving up some other necessity. According to the Center for Economic and Policy Research, it took a minimum-wage worker 130 hours to earn a year's worth of health benefits in 1979. That is only three-and-a-half weeks of full-time, minimum-wage work. By 2011, the same health coverage cost 749 hours, or 19 weeks of full-time, minimum-wage work. Working nearly half the year to afford only healthcare, and nothing else, is a ridiculous demand to make of low-wage workers.

The low minimum wage is also as costly for the government as it is cheap for companies. While McDonald's or other fast food companies save pennies and boost their profitability by paying a low wage, their workers cannot survive on that amount and often end up taking welfare benefits. In 2012, 4.3 million people received welfare benefits and 47 million received food stamps. The number of Americans getting food stamps – a national hunger crisis – has risen in tandem with the number of people unemployed or out of the workforce.

The minimum-wage salary is eaten up fast by necessities like food and healthcare: US minimum-wage workers don't just lack cash; they lack benefits, and this ends up costing the government. Each of the 23 million households on food stamps is getting an average benefit of about $274 a month from the government to pay for meals. About 40% of food stamp recipients live in a household where at least one person is earning money, according to the US Department of Agriculture.
~ from How Low Can You Get: the Minimum Wage Scam by Heidi Moore ~

I recently read that the US Chamber of Commerce is on a big lobbying push to try to convince lawmakers to do away with the minimum wage. Yes, the insufficient federal minimum wage -- a paltry $7.25/hour -- is too much of a burden on big business! Even though Wall Street is flying higher and higher these days, they are whining that their wings are clipped. Imagine how high they could get with cheaper wage-slaves!

As Moore points out, a low (or nonexistent) federal minimum wage is the biggest corporate handout of all. Bailouts are for fixed periods; the low minimum wage is the gift that keeps on giving!

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Fire in the Sky

Trey Smith

If I told you that government officials possessed ironclad proof that an imminent threat to this nation had the capacity to create a 9/11′s worth of injuries and deaths every year at an annual economic cost of a quarter trillion dollars, ask yourself: Would you say we should do something about it?

I’m guessing you would. Out of a basic sense of patriotism, you would probably at minimum support some new security regulations and investments in enforcing those regulations, even if that meant paying slightly higher taxes. After all, you profess to love America, and that’s the least we should do in the face of such a threat to our country, right?

Now ask yourself: Would your response to the original query change if you discovered that the threat at hand was not from a terrorist, but from unsafe workplaces — and that because of that unaddressed problem, these casualties and costs have already become a fact of life in America? Come on, admit it — your response probably would change. Yes, many who would reflexively support more regulations and enforcement in the face of a foreign terrorist threat would suddenly scoff at more regulations and enforcement in the face of unsafe workplaces. Why the double standard?
~ from America’s Greatest Threat: Unsafe Work Conditions by David Sirota ~

I have held onto this Sirota column for a month because I knew it wouldn't be that long before we had another deadly accident in the workplace. Right on cue, there have been two explosions with fatalities and injuries -- both in Louisiana -- within the past two days. The first one happened on Thursday in Geismar at a chemical plant. One person died and 73 were injured. The very next day a nitrogen plant only 10 miles from the chemical plant exploded resulting in one death and 7 injured.

While Americans tend to be more worried and frightened by potential terrorist attacks, far more people die each year at work -- often because of greed and lax safety standards. Sirota is right to ask "Why the double standard?"

It is an easy question to answer. Our political leaders drive the unrealistic fear of imminent terrorism, while covering up for the shortcomings of workplace safety. Terrorism is a moneymaker for the elite. Worker safety is a cost. Faced with the choice of making oodles of money versus spending it, corporations and their political lackeys almost always choose the former.

Graduation "Gift"

Trey Smith

So, you went off to college to prepare yourself for the workaday world. You are now deeply in debt to the tune of tens of thousands or, maybe, hundreds of thousands of dollars. As you walk through the line to receive your degree, the nation is waiting to give you your graduation "gift." Here it is, wrapped with a big bow.

In April, unemployment among workers under the age of 25 was at 16.1 percent, more than double the national rate.

While the unemployment rate for young college graduates between the ages of 21-24 who are not enrolled in further schooling is 8.8 percent, the underemployment rate, a gauge of those only working part time or who want a job but have given up looking, is at 18.3 percent. The jobless rate for this group was 5.7 percent in 2007; the underemployment rate was 9.9 percent.

Have at it, kiddos. Welcome to the world of underemployment!

What Could Be Coming Around the Next Bend

Trey Smith

Now that we're into May, people around the nation are starting to feel the impacts of the federal budget sequester that went into effect on March 1. There is a story by Tim Murphy at Mother Jones that offers a state-by-state look at some of the services being reduced or cut completely.

During the lead up to March 1, we were told that there was much handwringing in Washington as leaders from BOTH parties tried to forge a compromise that might avert the sequester.  That is difficult to take seriously because, now that the sequester has become a reality, little work is being done -- unless it involves inconvenienced business travelers -- to try to mitigate or reverse the situation.

Folks, what we have here is austerity, American-style.  If you want some idea what could be coming around the next bend, all we have to do is to take a look at what is happening in Europe, that region that got a head start on us in the austerity craze.

Unemployment in the euro zone hit another record in March, climbing for the 23rd consecutive month, with no end in sight to the economic and social catastrophe gripping Europe.

The unemployment figures came as hundreds of thousands of people marched throughout Europe and Greek workers launched a one-day general strike in opposition to the austerity measures being carried out across the continent.

The official unemployment rate in the 17-member euro zone hit 12.1 percent, the highest level on records dating back to 1995, according to figures published Tuesday by Eurostat, the statistical office of the European Union. This is an increase of 1.1 percentage points from a year earlier.

There were 19.21 million people unemployed in the euro area, a number that has grown by 1.72 million in the past year.

The countries that have undertaken the most savage austerity measures — Greece, Spain and Portugal — posted Depression-era unemployment rates, with 27 percent of the population of Greece officially unemployed, followed by Spain with 26.7 percent and Portugal with 17.5 percent.

Do you remember the mantra of Republicans when they took back the majority from the Democrats in the US House? They told us that their #1 priority was the unemployment problem. Well, neither they nor the Democrats have chosen to tackle that issue and, if we follow the same trajectory as Europe, the "official" unemployment rate is set to become a lot worse in the coming months than it is today.

But don't you fret none. Wall Street is flying high! Isn't that what really matters anyway?

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On the Cheap

Trey Smith

Terrorism, as we all know, occurs when Muslims attack the US or her allies in an effort to kill and maim as many people as possible to further their own "warped" religious and political objectives. At least, that's the definition that so many Americans go by. As I've mentioned before, a group or person's economic agenda doesn't factor into this definition. I think the primary reason that economics is shielded from inclusion is because it generally is employed by us, not "them," and America is not a terrorist organization.

Try telling that to the people of the Dhaka suburb of Savar, Bangladesh! On Thursday, hundreds of them lost their lives when the sweatshop they were working in collapsed. This certainly isn't the first such "accident" to occur in this region. In fact, these sorts of "accidents" happen more frequently than you might guess.

While the immediate responsibility for this incident lies with a sub-contractor, the tentacles reach back to the United States. You see, these sub-contractors work for western retail giants like Walmart. As Vijay Prashad reports,

The big garment producers no longer wanted to invest in factories – they turned to sub-contractors, offering them very narrow margins for profit and thereby forcing them to run their factories like prison-houses of labor. The sub-contracting regime allowed these firms to deny any culpability for what was done by the actual owners of these small factories, allowing them to enjoy the benefits of the cheap products without having their consciences stained with the sweat and blood of the workers. It also allowed the consumers in the Atlantic world to buy vast amount of commodities, often with debt-financed consumption, without concern for the methods of production.

It could easily be argued that requiring workers to ply their trade in a dilapidated structure that is an "accident" waiting to happen is a form of terrorism. Imagine going to work each day with the terror of not knowing whether or not you will make it out of the building alive after the end of your marathon shift for measly wages. You think these workers didn't know that the building they worked in was a candidate for collapse?

Terror comes in many forms. We tend to focus on the more explicit and graphic examples, while ignoring the implicit and structural varieties. We ignore the latter because we believe it is less prevalent and less deadly, but I'd bet the workers in places like Bangladesh would disagree.

So Very Little

Trey Smith

One of the guests on Friday's Real Time with Bill Maher was a young woman (I forget her name) who came to talk about the low minimum wage for workers who receive tips, predominantly waitresses. I had forgotten that tipped workers are exempt from the base minimum wage on the federal level and in most states. Did you know that in 28 states tipped workers earn a wage of $4.00 or less per hour? If based solely on the federal standard, tipped workers earn a measly $2.13 per hour in cash wages! That's only marginally higher than being an indentured servant or a slave!!

As this guest told it -- this was just as true as when Della and I first met when she working as a waitress -- food servers often receive "paychecks" for a zero amount. It is really nothing more than a paper record of the taxes and other deductions for that pay period. The money to pay rent and utilities and to buy food must come from tips -- money that is not mandatory. And so, some weeks food servers will have the requisite funds to meet their needs and other weeks they won't. What a crappy way to live!

As Main Street remains in the throes of the economic downturn, average folks have less money to spend. When you must watch every penny being spent, it means that a lot of people don't tip at all or the tips will be less than sufficient. Here we are in 2013 and our laws still expect food service workers to survive on tip money. It is absolutely insane.

It is not this way in Washington, Oregon or California (the left coast). These states have a minimum wage that is far higher than the federal version. Not only is the minimum wage higher, but it covers tipped workers as well. Here's the interesting upshot: Despite what the restaurant industry will tell you, these mandated higher base wages for tipped workers have not meant that eateries are going out of business left and right! All three states have a thriving food service industry environment. The only difference is that tipped workers aren't treated like absolute dog meat!

It is long past time for the federal minimum wage to incorporate tipped workers into its mandate. To treat tipped workers like second-class citizens is a stain on our national ethos.

When Down Is Up

Trey Smith

It is getting more farcical each month as the previous month's labor statistics are made public. For example, in March, a mere 88,000 net jobs were created. This number is FAR BELOW the amount needed simply to keep pace with population growth. In other words, 88,000 is not enough to break even -- not even close.

It would follow logically that, if we aren't keeping pace with population growth, the unemployment rate would go up. But, of course, we are told the exact opposite. Instead of going up by a few tenths or an entire point, the "official" rate dropped by one-tenth. How can this be?

The answer is the same as it has been for several years now. The federal government is able to keep the "official" unemployment far lower than it actually is by simply not counting all the disillusioned workers who have given up on trying to find meaningful work! With good paying jobs still scarce in many areas of the country, we are talking about a significant segment of the working population.

As Robert Oak of The Economic Populist points out, "The labor participation rate just hit a record low, not seen since May 1979 when many segments of the population were still quite discriminated against in the workforce." As of last month, we had a labor participation rate of 63.3%. That means that 36.7% of working age adults are unemployed! More than one-third of the potential workforce!

If more than one-third of the potential workforce doesn't have a job, how then can the "official" unemployment rate keep going down? In a word, it can't...unless some good old Orwellian "logic" is applied liberally!

Such a Soft Landing

Trey Smith

You want to know one huge difference between the wealthy elite and the rest of us? It concerns the nature of how we are separated from jobs. We peons in the proletariat are lucky to get our last paycheck and are then told not to let door hit us on the backside on the way out, while the elite often are showered with the kinds of compensation and benefits we peons can only dream of.

In a post from a few days ago, I mentioned the firing of the Rutgers University basketball coach for his rampantly abusive behavior. The school had known about his behavior for months and the firing came about ONLY after journalists began looking into the situation. Because he had allowed the coach to keep his job when he first learned of the abusive behavior, many in the university and community at large called for the dismissal of Athletic Director Tim Pernetti as well. The chorus grew louder day by day.

Owing to the bad publicity Rutgers is receiving re this situation, Pernetti was "allowed" to resign, but as part of the agreement, he was able to negotiate a very soft landing for himself!

Former Rutgers Athletic Director Tim Pernetti is getting $1.2 million in salary, plus an iPad, car allowance and more than two years of health insurance coverage under a settlement agreement.

The Associated Press obtained details of the settlement Monday through an open records request with Rutgers. The Star-Ledger had previously reported some details.

Pernetti resigned last week after a video was made public showing former men's basketball coach Mike Rice shoving players and berating them with anti-gay slurs. Pernetti suspended Rice last December. The coach was fired last week.

Under his agreement, Pernetti is to be paid his base salary of $453,000 per year through June 2014 and a one-time payment of $679,500 in the next month. He gets the money even if he takes another job.

He also gets his $12,000 per year car allowance through June 2014 and health insurance and pension payments through October 2015.

Pernetti also gets to keep his Rutgers-issued iPad and laptop computer.

What a deal! It might sound a bit extravagant, but it is par for the course for the elite. How often do we read about a CEO for a company that has laid off hundreds or thousands of workers and/or has run the corporation into the ground? Despite being a poor manager, these folks are showered with money, stock options, benefits and all sorts of allowances. They certainly don't go hungry!

Even more galling is that few are unemployed for long. Regardless of how bad their track record is, someone is more than willing to give them a second, third, fourth or tenth chance.

Compare that experience to the rest of us. I was fired from a job once. I wasn't given the opportunity to resign. No, I was summarily fired. I received the wages owed me and not a penny more. I wasn't allowed to keep anything owned by my employer, not even a pencil. Not only did I not receive an extension of ANY benefits, but the agency fought me on my unemployment claim. And I never was able to work in that field again -- no second chances for me!

From Red to Green

Trey Smith

With less than transparency, the AFL-CIO just issued a statement endorsing “expanding the nation’s pipeline system.” Although it did not explicitly endorse the Keystone XL pipeline, the labor federation nevertheless managed to extend its blessing to the project while hiding behind vague generalities. However, the logic of its position is unambiguous: the federation is in favor of extending pipelines in general and without qualification; the Keystone XL is a pipeline. Therefore logic compels us to infer that the federation supports the extension of the Keystone XL pipeline.

The duplicity of the gesture is entirely intentional. The building trades unions have embraced the pipeline and have lobbied the AFL-CIO to do the same. However, the AFL-CIO would prefer not to alienate its environmental allies, who strongly oppose the pipeline. For this reason the federation refrains from mentioning the Keystone XL by name. But its vague generality is just enough cover to provide President Obama with an excuse to support the pipeline, which his administration’s State Department has already secretly embraced. Obama can now point to disunity among his liberal supporters as a justification for ignoring them. He can do exactly what the corporations want while pretending to be unable to satisfy the conflicting and inconsistent demands of the liberal left. The AFL-CIO hides behind language, and Obama hides behind the AFL-CIO.
~ from AFL-CIO’s Own Oil Disaster by Ann Robertson and Bill Leumer ~

In a nutshell, the above snippet exemplifies why I changed my political affiliation from red to green. Though I continue to agree with many socialist concepts and policies, I more fully endorse the green vision for the world.

From my perspective, one of the big bugaboos with viewing the world from a strictly economic perspective has been born out again and again by organized labor. When jobs are dangled before their eyes, any other concerns are swept aside. So what if the Keystone Pipeline might mean grave environmental danger? That danger might create more union jobs too!

This narrow focus on jobs and economics has served as a continual barrier between the labor and environmental movements. Greens tend to be suspicious of labor types because there have been many instances when labor lines up with the greens only to abandon them because a few economic tidbits are thrown their way. The politicians who offer these tidbits often don't deliver the goods, but they understand that the offer itself is enough to cause labor to switch sides!

And it is not that greens don't understand economic ramifications either. The difference is that labor -- like the corporate world itself -- focuses almost exclusively on short-term benefits -- the number of jobs available today. They ignore the long-term implications like the overall costs of certain projects to society and the planet as a whole. 

Yes, supporting a new project like the Keystone Pipeline will mean more jobs for the members of the AFL-CIO, but at what costs to everyone else? That's a question they refuse to entertain!