Friday, Oct 2, 2009, 3:05 pm
Recession Still Going Strong. Will Congress Act (Again)?Many economists think the recession may be over, but 85 percent of voters surveyed in September for the Economic Policy Institute disagree, with more than three-fifths expecting joblessness and a poorly performing economy to remain problems a year from now.
The monthly unemployment report today explains why: last month payrolls shrank by 263,000 for the twenty-first straight month–the longest decline in 70 years–pushing the unemployment rate to 9.8 percent.
The jobless rate would probably have topped 10 percent if the labor force hadn’t contracted from workers dropping out. Indeed 17 percent of the workforce is unemployed, underemployed or so discouraged that they’ve given up actively working.
Although manufacturing and construction are still shedding jobs, the biggest increase in job loss came from the public sector and education, reflecting government budget crises and cuts, as well as retail.
Men, minorities and youth continue to be harder hit, and now over a third of the 15.1 million unemployed have been out of work for six months, beating the previous peak in 1983 as a share of the labor force. Work hours continue to decline, albeit more slowly.
The stimulus package has helped avoid even worse conditions, but EPI figures 10.7 million new jobs are needed, or about 573,000 new jobs a month for two years.
Overwhelmingly, voters surveyed for EPI thought the big banks and Wall Street had been helped by government policies, but only 10 percent thought policies had helped them a lot, or 13 percent saw the average working person helped a lot. If attitudes like that continue, along with high unemployment, the Democrats could suffer at the polls next November.
Economically and politically, the nation’s economy needs added stimulus, and a bigger deficit needs to be defended as essential for people’s welfare and a sustained recovery. Over four-fifths of voters want Obama to do more, and 53 percent say unemployment concerns them more than deficits (42 percent more concerned with deficits).
But 52 percent blame Bush primarily for deficits, and 73 percent believe that the government now needs to invest to get the economy growing rather than cutting the budget.
But will Congress agree?
David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at firstname.lastname@example.org.