Saturday, September 03, 2011

Another Year, Another Attack

Jennifer Gonnerman of The New York Times writes of a New Yorker who is not dissimilar from many workers during this prolonged economic slump:

On June 25, 2010, Frederick Deare punched out for the last time from his job driving a forklift at the Old London factory in the Bronx. That summer, everyone at the plant was being laid off: the oven operators, the assembly-line packers, the forklift drivers, the sanitation workers. Total jobs lost: 228. Old London, the snack manufacturer that invented the Cheez Doodle, wasmoving its operations to North Carolina. At 53, Mr. Deare, known as Freddy or Teddy Bear to his co-workers, would have to find a new job.

After a period of unemployment, Deare found a new job, and got laid off again. But then he heard about a job opening: forklift driver at a coffee warehouse in Yonkers.

He got an interview, and the supervisor he met with sounded optimistic about his chances of being hired. But there was no formal offer. Day after day went by. For three weeks the wait stretched on. This time, however, he got the job. And it was a union job, with benefits. He started on April 11 — 290 days after Old London laid him off.

“You’re speaking to a happy man,” he said after his first day. “I am in my glory. I mean, today was wonderful.”

There was only one downside: The work paid $10 an hour, 40 percent less than he had made at Old London. After taxes, his paycheck was even less than the unemployment benefits he had been collecting. But he tried not to dwell on this. “I don’t let it bother me that I’m getting less, because of the simple fact I have something, and a lot of people have nothing,” he said. “You have to crawl before you can walk.” Four and a half months later, he is still on the job.

There are a lot of lessons here. Digby, for instance, comments

Everybody sees this, whether they're employed or not. And it's made working people very accommodating. Being scared you might never find a decent job again will do that to a person.

It's great for employers, though.

That might be one of the reasons there was no net job creation in August while corporate profits continue to soar. However, it also brings to mind comments of various Republicans during the debate last year over extension of unemployment benefits. Then-New Hampshire Senator Judd Gregg contended unemployment compensation "encourages people to, rather than go out and look for work, to stay on unemployment" while to Sharron Angle, who would be defeated by Harry Reid, it was "this system of entitlement (which) has caused us to have a spoilage with our ability to go out and get a job."

Running, successfully, for a Senate seat from Kentucky, Rand Paul patronizingly remarked "As bad as it sounds, ultimately we do have to sometimes accept a wage that's less than we had at our previous job in order to get back to work and allow the economy to get started again. Nobody likes that, but it may be one of the tough love things that has to happen. Wisconsin's Ron Johnson, who would go on to be elected to the U.S. Senate, former House Speaker Newt Gingrich, and former House Majority Leader and criminal Tom DeLay all maintained that unemployment benefits discourage work. The last even claimed "in fact there are some studies that have been done that show people stay on unemployment compensation and they don’t look for a job until two or three weeks before they know the benefits are going to run out.”

These "some studies" appear to be one 1990 study, largely debunked by a 2007 study (The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?"), as Jonathan Chait explains here. Researchers David Card, Raj Chetty, and Andrea Weber found that when unemployment benefits ran out, individuals would discontinue submitting to the government the information which would have qualified them prior to expiration of benefits. No longer part of the unemployment compensation system, they would appear to have obtained work.

Most unemployment can be explained far more simply- more available workers than jobs, a 4.7:1 ratio at last accounting. Attention, however, has shifted to the tax, with many conservatives, posing as opponents of high taxation and sometimes even provoked to righteous indignation at mere mention of the word "tax," whining that too few Americans pay income taxes. Corporate loopholes remain sacrosanct in the drive to make the tax system "flatter." No one, they imply, should be spared having to pay income tax because of the child tax credit, earned income tax, 0r because they're elderly with Social Security their only source of income.

Republicans helpfully remind us that everywhere there are Americans collecting unemployment to avoid work or working without contributing to the "shared sacrifice" endured by those long-suffering "job creators."

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