The Recession Is Getting Worse, Not Better

Journal Roblimo's Journal: The Recession Is Getting Worse, Not Better 9

Journal by Roblimo on Wednesday November 25, 2009 @11:21AM

I am not a tenured economics professor or a Wall Street executive. I'm a common working stiff, laid off and trying to battle my way back to a decent income through self-employment. I'm in better shape than most other laid-off working people I know because my wife and I both have valuable skills and (barely) enough business acumen that our little start-up is doing rather well. But most of our friends and family are not doing so well. Even those who have replaced the jobs they have lost (and at least half of them have lost jobs in the last year) are earning lots less than they once did. And, last I looked, unemployment and underemployment are going up, not down. Economists and government mouthpieces talk about a "jobless recovery." To me, there is no such thing. A recovery, to people like me, is all about jobs. Nothing else matters. The fact that some high-rollers and speculators are doing better than they were last year has absolutely nothing to do with the American economy in which most of us live, which looks like it is going to stink for many years to come, if not for the rest of our lives.

I'll start with my own situation. My wife and I have watched our income drop by over 80%. For every five dollars we took in last year, we have taken in one dollar this year. Our house -- modest by six-figure income standards -- is gone to foreclosure. We are now living in a tiny mobile home. Don't get me wrong: it's a nice mobile home in a pleasant community, and we like it a lot. But this means we are not spending money on rehab work, as we constantly were on our old place, which means we do not spend much (hardly anything) on home improvement materials or yard care supplies. So our income drop trickles through the economy, same as millions of others' lost incomes. We eat out less (sorry, restaurant people), our plans to replace my ancient Jeep this year obviously went away (sorry, car people), and my plan to get some major dental work done is gone (sorry, dentists). I sold my sailboat and replaced it with a kayak. Our utility bills have dropped by 75%, and our property tax bill is down 90%. Our once-substantial charitable donations and financial help to less-fortunate family members have stopped.

Really, the only substantial purchase we expect to make in the near future is one more video camera for our business, along with a few accessories for it. Beyond that, nothing. And even though our income is creeping up, it is unlikely to exceed 1/3 of my previous salary within the next five years -- if ever -- and we expect to use any surplus to pay down debt and to build a financial cushion, not to buy anything beyond the the absolute minimum we need to get by day-to-day.

So our time as "consumers" is over. No big. We're 57, the kids are grown, and we already own most of the possessions a sane person might want. We're some of the most fortunate layoff victims we know.

Now let's talk about Bill, up in Tampa. He went from home ownership to living in a room in a friend's house. His wife is gone. He's semi-survived on a series of small-money temporary jobs. If I want to see him, I need to drive to Tampa, because his car is so junky he's scared to make the hour-long drive to Bradenton. His clothes have gotten, quite frankly, ragged enough that it's hard for him to put up the middle-class appearance he needs to look credible in the IT field. Basically, Bill is on the skids -- and sliding. He has some wing-ding eBay things going on, but I doubt that they're going to generate much income. Health insurance? Nope. Maybe/hopefully he can get Medicaid -- and then he'll need to find a doctor who will accept Florida's pitiful Medicaid payment rate.

Essentially, we as as society have told Bill he is human surplus. We no longer need or want him.

Then there's my young friend Scott; married, two kids, one on the way. Wife works part-time at Starbucks. Scott dumped a low-pay retail job without notice to start a supposedly much better one, but that job fell through. For the last five months he's been doing sporadic temp work. He's supposed to start a five-month gig next week doing tech support for a tax prep service. By the time that job ends he hopes to have his programming skills (mostly Visual Basic, C# and Java) honed to the point where he can get some sort of entry-level job in that field. Yes, I know. Programming is now an overcrowded field, and IT work is migrating to India and other low-cost countries so Scott will probably never make as much as American programmers once did. But what else is he going to do? Almost *any* work that isn't tied to geography is moving overseas. The Wall Streeters and speculators love this because they can make higher profits, but for the Scotts of the world it means a recession that may never end.

I can go on and on like this... about the relative in Baltimore who lost a half-decent warehouse job when his employers decided to use a "labor contractor" that employs no one but Spanish-speakers for minimum wage, and (wink wink) isn't picky about Social Security or other I.D. checks. And the woman with a bachelors degree and 15 years of useful customer service and law enforcement experience who has applied for over 150 jobs without a single nibble in return, and we're talking jobs in every field from what she's trained to do down to entry-level store security and other retail work.

And when a newly-refurbished Outback Steakhouse in Sarasota needed to hire 67 people, they had 1050 applicants. For no-benefit, mostly part-time work at or near minimum wage. That's scary. It didn't make the manage or Outback execs happy, either. They're not stupid, and they know that if that many people are looking for low-end jobs, it means fewer people who can afford to eat at Outback, even though CEO Joe Smith says the company is trying to keep many menu items below $10 despite higher food costs so that even people with small incomes can come to his restaurants for special occasions. And he's talking about people who once would have eaten at Maison Hoity-Toit. Those who once ate at Outback are probably now reduced to McDonalds.

So the richies have recovered from the recession. I'm glad to hear it. I hope they pop many bottles of domestic champagne to celebrate, and buy lots of American-made cars and yachts and hot tubs and expensive research reports from American economists saying everything is just fine, our country is doing well, don't you worry 'bout a thing -- and what we really need to do to spur economic activity is deregulate all financial scamming and never, never tax investment income or inheritances at rates as high as we currently tax working income.

(Funny note we never hear: if we taxed all investment and inheritance income over $100K/year at the same rate we tax a $100K/year worker's salary, and took out the same amount of FICA/SS tax, Social Security and Medicare would be on a sound financial footing, with plenty left over for universal health coverage...)

The tire industry is now moving en masse to China. More manufacturing jobs lost here, to go with the millions that already seem to be gone forever. I mentioned that I plan to buy a video camera. It will be a Japanese product. There are no (as in -0-) American-made, commercial-quality video cameras on the market in my price range. And if I am forced to buy a new computer, even if I choose an "American" Dell or HP, hardly anycomponents in it will be made here.

Tens of millions of Americans have lost their jobs. Something like half a million of us still lose our jobs every month. Some find jobs, too, but the new jobs almost always seem to pay less than the old ones -- and have crappier benefits, assuming they have any at all.

This is not a recession. It's an acceleration of a general economic shift that has been going on for several decades, in which the top few per cent of our society does better and the rest of us do worse. Baseballer Derek Jeter builds a 30,000 square foot mansion in Tampa while the local unemployment rate and the number of homeless people rise toward the sky. Union jobs go away. Wal~Mart and McDonalds keep hiring. American politicians talk about renewable energy sources and "green jobs," but China is starting to pump out solar cells like crazy.

We bailed out the bankers and the investment crowd, but we have no WPA-style program or CCC to employ any of the millions of Americans who desperately need work.

In other words, traditional Republicans (richies) have been bailed, and the rest of us haven't. For us, I'm afraid, the recession is just starting, and isn't likely to end for a long time -- assuming it ever does.

I know, we thought we could vote for change, and many of us did. But in the end, most of what we got was the same old same old with slightly different people talking from the podiums, and a new crop of Yowlers calling the current crop of corporate-bought politicians "socialists" instead of figuring out what's really going on.

What should we do next? I have no idea. Do you?

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