The Sick Job Market can Be Taken to Both the Symptom and the Cause of the Economic Troubles
Photo by Lumaxart
Unemployment has been hovering around the 9% mark since the recession ended two years ago. The report on jobs released last September shows the clearest indication that the crisis will continue into the 2012 elections.
The suffering is not limited to those 14 million that are officially unemployed. There are many who are compelled to become underemployed and work part-time. However, those that are underemployed are not included in the numbers suffering from lack of decent jobs.
Even looking at those with jobs, the picture is bleak. Their salaries, the values of their houses and their prospects of better employment have become severely diminished. Communities have been impacted by the slashing of public services. Small businesses are somehow surviving with sales at an all time low while college students are suffering because they can’t find work.
The sick job market can be taken to be both one of the symptoms and causes of many economic troubles – from raging foreclosure action, cash-starved governments to weakened consumer spending.
The hobbled job market shifts the power of bargaining to employers. Workers have no leverage to help them in asking for wage increases. Adjusted for inflation, the pay of the average worker was about 2% than last August’s average pay, according Labor Department findings.
Carl Van Horn of Center of the Workforce Development (RutgersUniversity) said that, “People are much more complaint and willing to take extra work assignments because they’re afraid”. Many are afraid to lose what little income they have.
High unemployment, impacts government funds negatively in two ways. Job loss means less revenue coming in for the federal government. Secondly, the government has to contribute more dollars towards unemployment related benefits, such as food stamps and other social support plans.
The tax collection of the federal government this year is anticipated to be the lowest since 1950. Over 40 million people, one of every eight Americans, are surviving on food stamps. Enrollment in disability plans (Social Security) has increased by 1 million; this is an increase of about 16% since the onset of the recession in 2007. This increase in dependent Americans is partially because so many people are seeking jobs, resulting in them having little to no income coming in.
If the economy had the strength to bring down the unemployment to a healthy 5.2%, then the budget deficit in 2012 could be decreased by a third less than what was predicted recently by the Congressional Budget Office.
