Two long years. That’s how long it’s been since Kimberly lost her job at a Los Angeles restaurant. She’s looked for work ever since. “But there’s nothing going for me,” she says. “I was on my way to a job at Los Angeles International Airport. Then all of a sudden, September 11 happened, and that was it.”
Eight months ago, Kimberly moved back to her hometown of Chicago with her kids. “I rely on family now, and it’s wearing them down,” she says. “There’s no income at all for me, so they have to work harder for my family, when they’re supposed to be working harder for them.”
That’s a story that millions of other working families know well. Kimberly is one of the 1.7 million people classified by the government as long-term unemployed–out of work for more than 26 weeks. Despite the media talk about light at the end of the economic tunnel, that number continued to grow throughout last year, and at a faster pace than the overall jobless rate.
And last month, the hardest hit got another kick in the teeth–when Bush and the Republicans refused to extend an emergency program of federal jobless benefits for workers whose state unemployment has run out.
Members of both parties claim that they’ll make emergency benefits their top priority when the new Congress convenes in January. But even if the program is extended–and some Republicans claim that it’s too costly–workers who were cut off will face a four- to six-week gap in checks. That can be the difference between barely scraping by–and hitting bottom.
More than 8 million people are unemployed in the U.S. today–about 6 percent of the labor force, according to government statistics, a relatively low number compared to previous recessions. But that’s just the official count. Economists agree that there are a substantial number of “discouraged workers” who don’t figure in the statistics–people who’ve given up looking for work.
Thus, the growth of the U.S. workforce began slowing in early 2000–a sure sign “of a weak labor market in which potential job seekers avoid even attempting to enter the workforce,” according to the newly published State of Working America 2002-03. Plus there’s the underemployed–people who make do with part-time work because they can’t find full-time jobs. All told, the real jobless rate is significantly higher that the official figure.
The overall statistics also mask another trend–the destruction of good-paying jobs with benefits. The manufacturing sector of the U.S. economy has been hardest hit by the recession–and responsible for the brunt of job losses. According to Economic Policy Institute economist Jared Bernstein, between March 2001 and November 2002, 1.5 million manufacturing jobs were lost–accounting for almost all of the net total of 1.6 million jobs lost over the period.
People like William Blaine are taking the hit. He took a job in North Carolina with Nortel at the height of the telecommunications boom a few years ago. But when the boom went bust and he was laid off, the 54-year-old William found that jobs in his industry had dried up. Now he makes ends meet with a part-time position at a boating store–run by his son. The other job “opportunity” that he’s considering? Security guard. “You feel like someone has pulled the plug on you,” he told the Chicago Tribune.
For the victims of the layoff ax, there’s not much help available. In most states, unemployment benefits cover just half of lost wages, or less–and they only last for 26 weeks. Compare that to France, where jobless workers get around 80 percent of their earnings for up to two years. And this is for the lucky few who qualify.
During the mid-1970s recession, three-quarters of laid-off U.S. workers got jobless benefits. Last year, only 43 percent of the unemployed got checks. Over the past three decades, politicians have only added to restrictions on the unemployment insurance system–requirements for hours worked, length of time on the job and so on.
Thus, Chicago restaurant worker Rodney Wilson has been out of work for a year. But he fell a couple hundred dollars short of qualifying for benefits–so he’s gone empty-handed the whole time. “There isn’t anything out there,” he says. “I’m looking for anything I can get. But it’s real tough.”
The unemployed themselves aren’t the only victims of unemployment. Employers know very well that job insecurity strengthens their hand with workers still on the job. Wage growth has slowed at all income levels, but especially at the lower end of the scale, as a direct result of increasing competition for scarce work.
And employers now take it for granted that they can provide fewer benefits to workers. Health care is an especially popular target for “cost-cutting.” Indeed, workers are less likely today to have employer-provided health insurance than they were 30 years ago–and those who do have it pay a bigger share of the cost.
Meanwhile, Corporate America is using the recession to undermine the power of unions. For example, telecommunications equipment maker Lucent Technologies claimed poverty when it slashed nearly 1,000 union jobs at its North Andover, Mass., plant this year. But at the same time, management hired a labor contractor, Solectron, to fill jobs at the factory. Masking tape on the plant floor marks the dividing line for union and nonunion workers.
Whether they’re working or laid-off, Lucent workers are paying a steep price. But according to Ed Peters, chief investment analyst for the Boston firm PanAgora Asset Management, that’s the way the free market is supposed to work. As he told the Chicago Tribune, “We overinvested not only in technology, but also in people.”