Nearly 200,000 jobs were created in February (based on a survey of employers, not hard data) and the official unemployment rate has dropped below 9% (based on a survey of households and not hard data), but initial unemployment claims are still too high to be good news even though that number has declined to “only” 368,000 for last week. Initial claims would need to drop at least another 100,000 each week to indicate that we have turned the proverbial corner on jobs.
Even with the relatively large number of jobs created last month we aren’t keeping up with population growth. This is reflected in that 90,000 additional people who entered extended unemployment benefits last week alone. That number is perhaps misleading because they don’t publish how many people left the program as 99ers or found jobs, this is just how much the program grew in total.
Since jobs are being created this means that the high number of weekly claims can be put almost solely on companies firing higher paid workers and replacing them on the cheap. This explains the stagnation of wages overall with the average wage in the US increasing exactly one cent in 2010 over the previous year.
The participation rate in the US workforce continues to decline and is at a 25 year low of 64.2%. If it were to return to the pre-crash level of 66.1% the unemployment rate would be 11.6%. Real unemployment as it was calculated back in the pre-Reagan years would be closer to 20% of the workforce.
State and local governments shed 30,000 jobs in February bringing the total to 450,000 since 2008. Governor Walker of Wisconsin is threatening to layoff 1500 workers next month if Democrats don’t give into his threats. His budget if adopted will cut 21,000 jobs to pay for massive tax cuts for the rich and corporations including total elimination of capital gains tax.
Capital gains tax cuts are a favorite of so-called capitalists who make money with money which allows hedge-fund managers to pay a top Federal rate of 15%. The top 25 fund managers took home an average of a billion each in 2009. This also works for corporate executives who take the bulk of their compensation in stock. No capital gains tax also encourages small and medium business to sell out to the big monopolies as they won‘t be taxed, this also drives the leveraged buyout business that buy companies and sell the assets to China and leave the shell of the company with the debt.
This is why tax revenue is at a fifty year low, if we merely returned to the good old days of Bill Clinton’s tax collection levels we would be again be running huge surpluses. Every Republican that stands up and says we have to do away with pensions, slash wages, cut benefits and do away with all safety net programs because “we are broke” is lying and he knows it. Everybody but them is broke, it’s like the small town bank that is broke after a visit from the James gang and then Jesse James lectures the town on the need for austerity.
Governor Walker can’t go out in public in Wisconsin without being booed and can’t get a seat in a restaurant. The towns folk are tired of being robbed.