Unemployment and the Declining Middle Class

I know there are plenty of big fish in the skillet these days: the disaster in Japan, the civil war that we’ve forgotten about in Libya, and the fact that the right side of my NCAA bracket has already collapsed like a tent in a tornado.

Still, I’m fretting about unemployment, especially the fact that our economy is not creating or sustaining quality, well-paying jobs. And I’m back to a now familiar theme: the growing divide in this country between those at the top of the economic and job ladder and those at the bottom.

And when you combine those two issues, you get a glimpse at why the debate over public employee jobs and unions — especially in a state like Ohio that has bleed the manufacturing and other jobs that supported a vibrant middle class — is so important and so contentious.

Paul Krugman in his NYT Op-Ed this morning — “The Forgotten Millions” — looks at unemployment and the reality that jobs and job creation are on the back burner these days if they are on the stove at all. Here’s an excerpt:

More than three years after we entered the worst economic slump since the 1930s, a strange and disturbing thing has happened to our political discourse: Washington has lost interest in the unemployed.

Jobs do get mentioned now and then — and a few political figures, notably Nancy Pelosi, the Democratic leader in the House, are still trying to get some kind of action. But no jobs bills have been introduced in Congress, no job-creation plans have been advanced by the White House and all the policy focus seems to be on spending cuts.

So one-sixth of America’s workers — all those who can’t find any job or are stuck with part-time work when they want a full-time job — have, in effect, been abandoned.

It might not be so bad if the jobless could expect to find new employment fairly soon. But unemployment has become a trap, one that’s very difficult to escape. There are almost five times as many unemployed workers as there are job openings; the average unemployed worker has been jobless for 37 weeks, a post-World War II record.

In short, we’re well on the way to creating a permanent underclass of the jobless.

Why doesn’t Washington care?

Part of the answer may be that while those who are unemployed tend to stay unemployed, those who still have jobs are feeling more secure than they did a couple of years ago. Layoffs and discharges spiked during the crisis of 2008-2009 but have fallen sharply since then, perhaps reducing the sense of urgency. Put it this way: At this point, the U.S. economy is suffering from low hiring, not high firing, so things don’t look so bad — as long as you’re willing to write off the unemployed.

Yet polls indicate that voters still care much more about jobs than they do about the budget deficit. So it’s quite remarkable that inside the Beltway, it’s just the opposite.

Well Dr. K, consider that for the elected officials and their staffs, lobbyists, K Street lawyers, government bureaucrats, policy wonks and other miscreants Inside the Beltway there is never a recession, let alone a Great Recession.

Yet everywhere else, people are worried about jobs — whether they have one or not — and Krugman is right. Unemployment can be a trap. Here’s a NYT editorial “The Unemployed Need Not Apply“:

The Federal Reserve is projecting unemployment to continue at or near 9 percent for the rest of the year. That is 13.9 million Americans out of work. Here is more grim news: Barriers to employment for jobless workers may be even higher than previously thought.

As the Fed updated its forecast last week, the Equal Employment Opportunity Commission held a forum on discrimination against unemployed job seekers. Members of Congress had urged the commission to explore the issue, after reading press reports of numerous instances in which employers and staffing agencies refused to consider the unemployed for openings.

The message — “the unemployed need not apply” — has at times been explicitly stated in job announcements. In other cases, unemployed job seekers have reported verbal rejections after a recruiter or employer learned they were not currently working.

And many of those long-term unemployed — or long-term underemployed — once held jobs that provided middle class incomes, medical benefits and retirement benefits. But as those jobs have disappeared, so has the support for public employees who still have incomes, medical benefits and retirement benefits that afford at best a middle class lifestyle.

Again, from the NYT, “Ohio Town Sees Public Job as Only Route to Middle Class“:

GALLIPOLIS, Ohio — Jodi and Ralph Taylor are public workers whose jobs as a janitor and a sewer manager cover life’s basics. They have moved out of a trailer into a house, do not have to rely on food stamps and sometimes even splurge for the spicy wing specials at the Courtside Bar and Grill.

While that might not seem like much, jobs like theirs, with benefits and higher-than-minimum wages, are considered plum in this depressed corner of southern Ohio. Decades of industrial decline have eroded private-sector jobs here, leaving a thin crust of low-paying service work that makes public-sector jobs look great in comparison.

Now, as Ohio’s legislature moves toward final approval of a bill that would chip away at public-sector unions, those workers say they see it as the opening bell in a race to the bottom. At stake, they say, is what little they have that makes them middle class.

“These jobs let you put good food on the table and send your kids on school trips,” said Monty Blanton, a retired electrician and union worker. “The gap between low and middle is collapsing.”

Gallipolis (pronounced gal-uh-POLICE) is a faded town on the Ohio River, one whose fortunes fell with the decline in industries like steel in bigger cities along the river. That erased a swath of middle-income jobs in the area, said Bob Walton, who, as a commissioner for the Southern Ohio Port Authority, an economic development agency, has tracked the economic history of the area for decades.

“It’s a real big change,” Mr. Walton said. “It has changed the complexion of our community.”

Today, storefronts are mostly dark. About one in three people live in poverty. Billboards advertise oxygen tanks and motorized wheelchairs. Old photographs in a local diner look like an exhibit from a town obituary. The region has some of the highest rates of prescription drug abuse in the state, with more people dying from overdoses than car crashes, according to Ed Hughes, executive director of the Counseling Center in Portsmouth, about 55 miles west of here.

David Beaver, 65, a barber, said that when he got out of high school, “you could go anywhere you wanted to and pick your job.”

“Now, it’s depressing,” Mr. Beaver said. “I hear the boys talking. They can’t find anything.”

It is not that there are no jobs, but rather that the jobs available pay too little and have no benefits, resulting in, as Mr. Beaver put it, “just scraping by.” A private hospital and two power plants do offer good jobs, but they are highly competitive and many require some higher education, something that fewer than one in five people here have, according to 2009 census data.

This strikes me as a situation to be concerned about and not just in Ohio: a lack of good jobs, an increasing number of people without the education and skills to compete for the good jobs that are available, and a declining middle class in both the public and private sectors.

And, as Dr. K writes, “Why doesn’t Washington care?”

By the way, as we slide head first into the weekend, I wanted to revisit an earlier post this week where I opined that taking action at the ballot box these days was more important than taking to the streets in protest.

Well, I read a story later that made we reconsider — at least in one instance.

It appears as though students at Tufts University took to the streets in what was described as a partially nude run around campus to protest the decision by university officials to ban the annual Naked Quad Run, held in mid-December to celebrate the end of classes.

Now that’s a street protest worth joining. Just sayin’.

And on reflection, if the union officials, teachers and other public employees in Wisconsin had taken a similar approach, something tells me Gov. Walker and the Republicans would have folded their tents immediately.

C’mon. Think about it.

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