By Jerry Goldberg
Published Dec 9, 2010 10:32 PM
Some 2 million long-term jobless workers face having their checks cut off in December, unless Congress renews the federal extension of unemployment benefits that expired on Nov. 30.
The number could grow to 4 million by the end of February. Eventually 7 million jobless — including workers whose state unemployment benefits have not yet run out — may lose their benefits. (National Unemployment Law Project, Dec. 4)
There are also another 4 million, called “99ers,” who have already lost or are scheduled to lose their benefits even if a federal extension is passed, as it does not go beyond 99 weeks of unemployment. (Huffington Post, Dec. 3)
As of Dec. 7, the media are reporting that the Obama administration and the Republicans have reached a rotten compromise — a possible extension of benefits in return for keeping the Bush tax cuts for the very rich for at least two more years. There is no guarantee this compromise will be passed, however. And if it does, there will be even more screaming from the right that Social Security and Medicare have to be “reformed” because of the huge deficits in the federal budget — deficits that could be eliminated by taxing the rich and cutting the Pentagon budget.
Even as extended benefits are in risk of being cut off, unemployment in the U.S. is rising. On Dec. 3, the Department of Labor’s Bureau of Labor Statistics reported that the “official” unemployment rate had risen to 9.8 percent, the highest since April. This translates into 15 million workers officially jobless and looking for work. The “official” unemployment rate is 16 percent for African Americans and 13.2 percent for Latinos/as.
Of these 15 million people out of work, 6.3 million — more than a third — have been jobless for six months or longer. The BLS reported that an additional 9 million are working part-time but want full-time work, while another 5.8 million are considered “discouraged workers” and aren’t counted. That brings the jobless rate to 19.2 percent. If you then add in the 9 million workers with part-time jobs who want full-time work, the figure becomes an astounding 24.6 percent.
Meanwhile, corporate profits rose from an annualized rate of $995 billion to $1.66 trillion this last quarter. (Huffington Post, Nov. 23)
Corporations had already been sitting on their profits and refusing to hire. The current rise in unemployment is largely a result of a decline in public sector jobs. For example, in November, while private sector jobs increased by 50,000, local governments, facing growing deficits, cut 14,000 jobs. Analysts generally estimate that 100,000 to 125,000 jobs need to be added each month just to keep the unemployment rate from rising. (New York Times, Dec. 4)
As President Barack Obama’s stimulus funds dry up, the prospect is likely of even greater job losses in the public sector. For example, in 2009, $31 billion of the states’ $110 billion in budget shortfalls were offset by federal stimulus funds. This year, $68 billion of the states’ $191 billion in deficits are being offset by federal stimulus funds. Next year, some $59 billion of the states’ $160 billion in budget shortfalls will be similarly offset. It is projected that in 2012, however, only $6 billion of the states’ estimated $140 billion in deficits will be offset by stimulus funds. (New York Times, Dec. 5)
Local budget deficits are likely to increase even more dramatically as declining home property values manifest themselves in declining tax bases, just as the federal stimulus funds dry up. This will inevitably lead to even greater public sector layoffs and service cuts.
Tax cuts for the very rich
The same day that federal extended unemployment benefits expired, President Barack Obama met with congressional leaders. This critical issue was not even discussed. Instead, the meeting resulted in setting up a committee to continue discussing Republican demands that the Bush tax cuts be extended for the very rich, those making more than $250,000 per year. (New York Times, Nov. 30)
Even if a deal is struck to extend federal unemployment benefits in exchange for continuing the property tax cuts for the rich, a deal that President Obama apparently has already agreed to, Republican leaders are insisting that the approximately $60 billion one-year cost of extended unemployment benefits be paid for by cutting other desperately needed social programs. But they don’t insist on similar cuts to offset the $700 billion 10-year cost of extending tax cuts for the rich. (Huffington Post, Dec. 4)
The workers and poor will be forced to pay for their benefits (if the extension is passed), while the rich get a free ride. Rationing of basic services — such as the state of Arizona’s recent decision to eliminate Medicaid funding for life-saving liver, lung, heart, pancreas and bone marrow transplants — will become the rule.
The Federal Reserve has distributed $3.3 trillion in relief to huge corporations and financial institutions since January 2009. Included in that amount was $1.1 trillion in mortgage securities on at-risk mortgages held by Morgan Stanley, Citigroup, Merrill Lynch, J.P. Morgan, Deutsche Bank, Barclays and other major financial institutions. Significantly, that $1.1 trillion was only on mortgages backed up by the federal government, meaning these transnational banks had their bad loans taken over by the taxpayers.
‘Fight, don’t starve!’
The one-sided class war being waged by the capitalists, which totally disregards the well-being of the workers and poor while funneling more and more of our funds to the corporations and rich, must be answered. As demonstrators chanted at a demonstration in Detroit on Dec. 2, it’s time for the workers to “Fight, don’t starve.”
The working class must hit the streets with its own program. A job or income now is every worker’s right. Tte government must bail out the people, not the banks. We need a political struggle to demand a massive WPA-type jobs program to rebuild our communities.
The government must order the corporations to spend their $1.66 trillion in profits stolen from the labor of the working class to put people to work through a shorter workweek, 30 hours work for 40 hours pay, and an executive order implementing a moratorium on foreclosures, evictions and utility shutoffs so people can survive the current crisis.
We need to revive the fight for socialism to replace the capitalist system, whose decadence and decay is manifesting itself daily with every new attack on the workers and oppressed.
Articles copyright 1995-2010 Workers World. Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.