Robert Reich: The Feeble Economic Recovery Ahead

[marmar]

via AlterNet:



Robert Reich's Blog / By Robert Reich

The Feeble Economic Recovery Ahead
Can we call this a recovery? More Americans will be working, but for pay they consider inadequate.

April 16, 2010 |


Many of my students at Berkeley who will be graduating in June are worried about the job market. I understand their worries. But they and other new college grads have less cause for concern than most American workers. Let me explain.

Since the start of the Great Recession in December 2007, the U.S. economy has shed 8.4 million jobs and failed to create another 2.7 million required by an ever-larger pool of potential workers. That leaves us more than 11 million jobs behind. (The number is worse if you include everyone working part-time who’d rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they’re in.)

This means even if we enjoy a vigorous recovery that produces, say, 300,000 net new jobs a month, we could be looking at five to eight years before catching up to where we were before the recession began.

Given how many Americans are unemployed or underemployed, it’s hard to see where we get sufficient demand to support a vigorous recovery. Outlays from the federal stimulus have already passed their peak, and the Federal Reserve won’t keep interest rates near zero for very long. Although consumers are beginning to come out of their holes, it will be many years before they can return to their pre-recession levels of spending. Most households rely on two wage earners, of whom at least one is now likely to be unemployed, underemployed or in danger of losing a job. And even households whose incomes have returned are likely to be residing in houses whose values haven’t—which means they can’t turn their homes into cash machines as they did before the recession. .........(more)

The complete piece is at: http://www.alternet.org/economy/146494/the_feeble_economic_recovery_ahead

[xchrom]

1. Recommend

[lunatica]

2. The profits corporations are making now are unsustainable for long

They're making profits from downsizing and underpaying and off-shoring jobs. Sure they'll actually save a bundle in the short term. But that won't last. Once they spend their big profits on giving huge bonuses to their top managers where is their next profit coming from? If they underpay their labor force who's going to become their customer? It's not like they're paying huge wages to their work forces in other countries. The glory days of record profits are going to be short lived as they realize they've killed the goose that laid their Golden Egg.

[proudohioan]

4. Killed the goose that laid their golden egg?

Wow! I love it; that's a really great line!

:thumbsup:

I do think it's equally (if not more) important to consider the QUALITY of jobs being created, not just the numbers. If all we are creating is a bunch of Wal-mart type jobs just to get the unemployment rate down, we are doing a huge disservice to the whole country. Foreclosures and defaults will continue to rise, as will the public assistance roles. Then again, maybe that's what we need to finally get a wake-up call?

[raccoon]

5. A-fricking-men! Not only what you said, but people who have low-paying Walmart type jobs

fall into much lower tax brackets than someone holding a halfway decent paying jobs.

Less taxes = less revenue for state, local gov'ts = revenue shortfalls for said local gov'ts = more taxes or cutbacks.....

[proudohioan]

7. A-fricking-men back at you! And thus the downward spiral.....

continues...... when in the hell are we finally gonna get the big picture?????

:)

[raccoon]

6. delete duplilcate post nt

[fasttense]

3. He is overly optimistic.n/t