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Double-digit unemployment fuels growing social crisis in Oregon
By Hector Cordon
24 November 2009
Oregon’s October unemployment figure, released last week, remained unchanged from September and showed a nearly 1 percent drop from May 2009’s high of 12.2 percent. The report, however, was far from good news for workers.
The unemployment level remained in the double digits—a level first reached in February of this year—staying at 11.3 percent. This compares to the US figure of 9.8 percent in September and 10.2 percent in October.
While October’s unemployment rate appears to have plateaued, net job losses remain high—1,900 in October, seasonally adjusted, following September’s revised loss of 6,000 jobs. Job losses for the previous seven months averaged 5,100 per month.
The drop in the unemployment rate from last May’s 12.2 percent and its flattening in October is largely the result not of any improvement in the economy, but rather the abandonment by large numbers of workers of an active search for jobs.
In September, more than 11,000 left the official jobless rolls. State officials attribute the decline of job seekers to many enrolling in school, citing an increase in enrollment of 5,000 just in the state university system. But many more have exhausted all possible employment avenues.
The official jobless figures provide faint encouragement for the just over 210,000 Oregon workers still on the unemployment rolls. In fact, the continuing hemorrhage of manufacturing—which has lost 61,700, or 27.5 percent, of jobs since January 2000—indicates that Oregon will never return to pre-recession job levels. A recent analysis by the state Employment Department forecasts that the “manufacturing industry is the only broad sector expected to lose jobs between 2008 and 2018.”
Three key sectors of Oregon’s economy reported downsizing in October: manufacturing, with 2,400 jobs lost; construction, which lost 1,900 jobs; and leisure and hospitality, which lost 1,500 jobs. Over the past year, manufacturing jobs declined by 26,300 and construction jobs fell by 13,300.
According to the Oregon Labor Market Information System (OLMIS), more than 100,000 workers have lost their jobs in the past year. “Seasonally adjusted employment has fallen by 104,400 jobs over the past year, and employment is now 124,300 lower than at its peak in December 2007,” the agency reports.
Oregon has the sixth highest unemployment level in the nation, following Michigan, Nevada, Rhode Island, California and South Carolina. According to a Families USA report, Oregon had the largest increase in unemployment in 2008-2009—5.2 percent, followed by Michigan’s 5.1 percent increase.
In the wake of the large job losses, Oregon leads the nation with the biggest increase in uninsured working-age adults, going from 22.0 percent to 25.1 percent.
Those who remain employed are earning lower wages due to shortened hours and furloughs. An OLMIS report states that “average weekly hours have dropped substantially and continuously for Oregon manufacturers throughout the past year…from 40.7 in December, 2007 to 35.4 in March, 2009.” This represents a startling 13 percent decline in work hours and a roughly corresponding drop in earnings.
In a comparison by OLMIS of first-quarter wages in 2000 to first-quarter wages in 2009, adjusting for inflation, average wages dropped by 1.4 percent. Manufacturing workers saw a decline of 5.1 percent, construction workers earned 3.3 percent less, and the low-wage leisure and hospitality sector lost 6.1 percent in wages over the decade.
In 2008, Oregon was one of eight states to sustain an increase in its poverty level in the first year of the recession. The Census Bureau reports that 13.6 percent of Oregon residents—more than 506,000 people—lived in poverty in 2008. The poverty level is set at the absurdly low cutoff of $22,050 for a family of four.
Oregon’s historically high level of unemployment is at the core of the high percentage of its population who experience hunger, homelessness and poverty. A 2007 study by OLMIS shows that in 25 of the previous 32 years—since 1975—Oregon has sustained unemployment above the national average.
The Oregon Food Bank reported in September that in the previous fiscal year it had distributed a record-high 897,000 emergency food boxes. This represents a 14 percent increase over a year ago. Food bank CEO Rachel Bristol stated, “This is unprecedented. It is by far the largest number of emergency food boxes the OFB Network has ever distributed in a single fiscal year.”
The rate of “food insecurity” has remained relatively stable since 2003-2005, at 13.1 percent, or one in eight households, which is not dissimilar from the national level. However, the number of people experiencing “very low food security” increased 6.6 percent. This affects 1 in 15 households and represents a significant increase from the 2003-2005 rate of 3.9 percent. Of the 50 states and the District of Columbia, Oregon and Mississippi had the largest increases in their rates of very low food security.
The November 17 issue of Oregon Public Broadcasting news quotes Oregon State University sociology professor Mark Edwards, who states, “Even ten years ago, we found that Oregon had high hunger rates, even among people who were working—and had full-time, year-round jobs. So there’s something else going on in Oregon that I suspect has to do with the cost of housing compared to the income people are bringing in.”
Oregon has the ignominious distinction of having had the highest homeless population in the US in 2008. Housing and Urban Development says that Oregon’s per capita rate is 0.54 percent and that Oregon’s homeless population has increased by 35 percent over last year.
A one-night statewide homeless count conducted in January found more than 17,000 individuals and nearly 2,400 households composed of one or two parents with children living on the street, in homeless shelters or in other “transitional housing.” Recent estimates by homeless service providers are that 30 percent of the homeless in Portland are children.
The Department of Human Services released figures in September showing that food stamp use is soaring. Since the recession began, the number of food stamp recipients has increased by nearly 32 percent. August of this year saw more than 635,000 persons, or one out of every six Oregon residents, receiving food stamps.
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Once again: Obama and the jobs crisis
24 November 2009
The Obama administration has flatly rejected appeals for the federal government to take any direct action to create jobs and alleviate the mounting toll of unemployment in the United States. Obama reiterated this position in his Saturday radio/Internet address, and it was echoed by top aides in media interviews over the weekend.
White House Chief of Staff Rahm Emanuel told the Wall Street Journal, “There are two engines to our economic message, two ways to generate jobs. One is small business, the second is energy.” He implicitly rejected any suggestion of direct government hiring for public works projects in favor of tax credits or eased lending terms for private, profit-making businesses.
The Journal article published Monday began: “The White House is lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit, administration officials said.” Besides Emanuel, the newspaper cited opposition by Treasury Secretary Timothy Geithner to a tax on financial transactions that would finance a jobs program, as proposed by some House Democrats.
Obama’s Saturday speech was remarkable for its callous indifference to the plight of the unemployed. He gave lip service to the problem, declaring at the beginning, “As we emerge from the worst recession in generations, there is nothing more important than to do everything we can to get our economy moving again and put Americans back to work.”
“Everything we can” turns out to be little more than talk—a White House forum on jobs, to be held December 3, and perhaps more tax cuts for corporate interests. “In order to keep growing, we need to spend less, save more, and get our federal deficit under control,” Obama said. “It is important that we do not make any ill-considered decisions—even with the best of intentions—particularly at a time when our resources are so limited,” he concluded.
“Limited resources” were not a consideration when it came to bailing out Wall Street. The US Treasury and the Federal Reserve made available trillions to the financial institutions. But when it comes to the working class, Obama has repeatedly demanded austerity measures.
The administration forced General Motors and Chrysler into bankruptcy and imposed sweeping wage and benefit cuts on the auto workers. Obama has insisted that any health care legislation “not add a dime to the deficit,” and now the White House rejects any direct job-creation measures in the name of reducing the deficit.
The barely concealed contempt of Obama and other top administration officials for working people is all the more remarkable under conditions of double-digit unemployment and reports that 49 million Americans faced hunger last year and that home foreclosures are continuing at record rates. The jobs crisis is downplayed as a “lagging economic indicator.” The hunger report, released last week, evoked a perfunctory response from Obama, who warned that worsening malnutrition among children was dangerous because it threatened America’s global competitiveness.
Meanwhile, Obama congratulates himself for restabilizing the banks while Wall Street reaps bumper profits and prepares to award its executives and traders with record bonuses next month, secure in the knowledge that the administration opposes any real restrictions on bankers’ pay.
Obama voiced his hard line against new spending to create jobs in an interview during his China trip with the right-wing Fox News. “There may be some tax provisions that can encourage businesses to hire sooner rather than sitting on the sidelines. So we’re taking a look at those,” he said. “I think it is important, though, to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a way that could actually lead to a double-dip recession.”
It is no accident that Obama took time from his China trip to reiterate his opposition to any major increase in social spending. This was in large part intended to reassure the Chinese, who hold some $800 billion in Treasury notes and are the biggest creditor of the United States.
Central to the global strategy of the American ruling class, which has more than doubled the federal deficit in order to bail out the banks, is a sharp reduction in the wages and living standards of American workers, whose conditions must be brought more closely in line with those of super-exploited workers in Asia. On the basis of what Obama calls “lower consumption,” the US is to pare down its debt and transform itself into a cheap-labor center for exports to the world market.
This policy of “everything for the banks, nothing for jobs” is so blatantly hostile to the working class that some of Obama’s nominally liberal supporters have issued appeals for the president to change course, warning that otherwise he risks a social and political explosion.
Congressman Peter DeFazio of Oregon told CNN, “It’s pretty embarrassing for a Democratic administration and a Democratic Congress to be identified with total attention to Wall Street and nothing for Main Street and jobs.”
A joint statement by the AFL-CIO, NAACP and four other organizations, issued November 16, urged Obama to adopt a five-point jobs program, including an effort to “directly create jobs that put people to work helping communities meet pressing needs, especially in distressed communities facing severe unemployment.”
Perhaps the most remarkable expression of concern came from economist Paul Krugman, a columnist for the New York Times who has been a fervent supporter of Obama’s health care plan. He took note of Obama’s comments to Fox News about the danger of growing federal deficits, then observed: “It took me a while to puzzle this out. But the concerns Mr. Obama expressed become comprehensible if you suppose that he’s getting his views, directly or indirectly, from Wall Street.”
Krugman has blurted out the real social base of the Obama administration. Obama, Emanuel, Geithner & Co. echo the views of bankers and speculators because that is whom they represent and serve. Obama heads an administration of, by and for the most powerful financial interests.
This is not a government of reform that is being led astray by right-wing pressure, or can be pushed to the left by counter-pressure from below. It is a government of social and political reaction.
Ultimately, the policies of the Obama administration are determined by the objective historical decline of American capitalism. Even in the depths of the Great Depression, the Roosevelt administration could enact limited social reform policies because it had at its disposal the vast economic reserves of American capitalism, then the industrial powerhouse of the world.
In the intervening decades, the United States has undergone a dramatic economic decline, expressed in its most concentrated form in the decay of its industrial base and the transformation of the US into the global center of financial speculation and parasitism. The result is unprecedented levels of social inequality, relentless attacks on the conditions of the working class, and the rise of a financial aristocracy that dominates the political system and dictates basic government policy.
The Obama administration embodies this process. Its social and economic policies demonstrate that the US ruling elite is incapable either of reforming itself—by curbing the profit-gouging on Wall Street that triggered the financial crisis—or of providing social reforms that would benefit the masses of working people.
Obama’s refusal to take action on the jobs crisis and his undisguised indifference to the suffering which has swept over working class America are increasingly recognized by millions of working people. Initially, this is reflected in plummeting poll numbers. Soon enough, it will be expressed in the eruption of major struggles as workers and young people abandon illusions in the phony promises of “hope” and “change” and take action to defend their independent social and class interests.