The State of Our Jobs

by David Stearns

Officially, the American recession ended in November 2001 and we are now entering our third year of recovery. One striking aspect of this so-called recovery from the recession is that the numbers of unemployed people continued to increase until September of 2003. We have been in a period of "jobless recovery." The very concept seems contradictory. Aren't recessions about people losing their jobs? What does it mean to speak about the end of a recession without jobs increasing?

How could the economy grow for two years without increasing the total number of employed U.S. workers? Perhaps the most "benign" explanation for the two-year gap between the end of the recession and rise in employment is called "increased productivity." That is, improvements in technology and management make it possible for companies to use less labor to produce more goods. Because labor represents the highest cost in the process of producing goods or supplying services, companies try to reduce their labor costs. Lower labor costs can mean lower prices when the companies sell their goods or services. Americans as consumers benefit from lower prices. (Of course, if you aren't employed, you won't enjoy this benefit because you won't be buying much.)

A more sinister explanation for the jobless recovery is that American businesses ship jobs to poor countries in Asia or Latin America. Why pay American workers $12 an hour for assembly work when you can hire Mexican workers to do the same thing for much less per day?

While both reasons explain the jobless recovery, it doesn't explain why so many unemployed workers aren't getting the benefits they need. In March 2002, Congress passed a program called Temporary Emergency Unemployment Compensation (TEUC). This gave unemployed workers an additional 13 weeks of paid unemployment to help them through tough times. This program was in effect for nine months, but expired this past December 2003, when Congress went on vacation without extending this program. On the 28th of December there was instant termination of the program, regardless of how many weeks of compensation a worker had already received. This means that if you became eligible for the extended benefits in early December and had only collected three weeks of checks under the program you wouldn't get the next 10 because of instant termination. Thousands of unemployed workers started losing benefits right away and so far, Congress hasn't tried to fix the problem since they've come back from their holidays.

And, while there are jobs being created, it's important to look at the number and quality of those jobs. The Economic Policy Institute (EPI) reported in December 2003, that jobs continue to be lost in 30 states. Moreover, there are only three states in which the number of jobs is adequate to employ all those entering the work force. Unemployment is also higher in half the states since the recession ended.

The Economic Policy Institute also reports that the majority of the jobs that have been lost were in industries that paid higher wages compared to those that are now hiring. Many of the new jobs don't come with the same benefits that workers had before, either. So, in addition to making less money, some re-employed workers have also lost their heath coverage and other benefits.

When the presidential candidates talk about the economy you will probably hear different versions of the story. Some might say the economy is recovering and growing while others might say that the economy still isn't very strong. If the economy is one of the issues you're concerned about, you might pay close attention to what the candidates say about it. Here are some questions you might see if you can find the answers to. What other questions do you have about the economy?

1. How do candidates explain that, while the economy is improving, there still aren't enough jobs for all the people who are looking for one?
2. Do candidates talk about whether the jobs that do exist pay enough for families to survive and thrive?
3. Do candidates talk about how to help those people get by who can't find work?
4. Are candidates concerned about the numbers of jobs going overseas?
5. What do candidates propose for creating more jobs?

David Stearns works at the Jamaica Plain Community Centers Adult Learning Program as a GED teacher, EDP assessor, and ABE coordinator. Since 2000, he has also been an Advisor for the City of Boston External Diploma Program.

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