Jobless in the US

Oct 24, 2010 Editorial

With almost every Guyanese having a relative in the US, and receiving some sort of assistance from those relatives, it is still difficult for us to appreciate that their remittances inject more revenue into our economy that all of sugar and rice – or indeed all agriculture.
For this reason, if none other, we ought to be very concerned about what is going on in the US economy in general and its unemployment rate in particular.
Earlier this month, the U.S. Bureau of Labour Statistics revealed that 95,000 jobs were slashed in September, while only 64,000 were added. This meant, the Bureau claimed, that unemployment was holding steady at 9.6 percent. But these figures understate the magnitude of the jobs crisis. The broadest measure of unemployment and underemployment (which includes people who want to work but have stopped actively searching for a job, along with those who want full-time jobs but can find only part-time work) reached 17.4 percent in October, which appears to be the highest figure since the 1930s.
And for large swaths of society—young adults, men, minorities—that figure was much higher (among teenagers, for instance, even the narrowest measure of unemployment stood at roughly 27 percent). One recent survey showed that 44 percent of families had experienced a job loss, a reduction in hours, or a pay cut in the past year.
There is unemployment, a brief and relatively routine transitional state that results from the rise and fall of companies in any economy, and there is unemployment—chronic, all-consuming. The former is fairly painless, while the latter is a pestilence that slowly eats away at people, families, and, if it spreads widely enough, the fabric of society.
Indeed, history suggests that it is perhaps society’s most noxious ailment. The 2008 recession was halted by the Obama stimulus programme – $814-billion in direct stimulus and a $700-billion financial institution bailout. The money went towards shoring up teetering banks and inefficient mega-corporations (such as General Motors).
While the economy grew by 2.2 percent, promises of job preservation came to naught as the banks and firms laid off their workforce without embarrassment.
The Centre on Budget and Policy Priorities has a sober assessment: “A jobs recovery patterned after the 1980s, if it started right now, would require average job growth of more than 500,000 per month and would take 15 months (until January 2012) to boost the number of jobs in the economy back to where it was in December 2007, when the recession began.”
Almost 44 million Americans now live under the poverty line (that is 14.3 per cent of the population). The line is set at $10,830 for a single adult, or $22,050 for a family of four. Not many people can survive on such a modest income.
In late 2009, the U.S. Department of Agriculture revealed that 49 million Americans lack consistent access to food. The department considers them in a condition of “food insecurity”. They will not use the word “hunger” as it has been banned by the government since the Reagan administration.
This did not stop the President: not long after the report came out, Obama said, “Hunger rose significantly this year.”
The US seems unable or unwilling to make the necessary changes to turn its economy around and reduce its public debt. There is only gradual acceptance that the economy has structural problems and that the traditional US exhortation of the merits of hard work and enterprise will not turn the tide. The US Treasury optimistically cites “the Zarnowitz rule” – that deep recessions are followed by steep recoveries. It has not, and will not, happen this time.
So the leadership continues to blame illegal immigrants and urge legislation to deport them – even as every study shows that these immigrants contribute positively to their economy. Or they blame China – as if the Chinese are holding a gun to their heads to import their goods – on credit.
Guyanese, therefore, would be well advised not to expect their remittances to continue unabated and to cut their cloth accordingly.

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