Back to Work….For Some of Us.

iStock_000013584588XSmallThe lives of many Americans change each Labor Day. Children are back to school. Mornings are a little cooler. And summer vacations are over. It’s back to work, for many of us.

But for the millions of Americans who are unemployed, or who have part-time employment, this week is no different than the preceding ones.

Though economists say the recession began in late 2007 (and ended in 2009) with all due respect to those who spend their lives examining their economic navels, they should know better. The reality is that the mega-recession began in the second half of 2008, and hasn’t ended yet. The talk of “double dip” is nonsense for Americans struggling to make ends meet—they are still dealing with the first dip. There are now 2 million Americans whose unemployment benefits, even at 99 weeks, have ended, and whose chances of finding a job in the near term are slim. 90+% of those who have been out of work for more than a year will not find a job in the next month.

Last week’s Labor Department unemployment news was a downer. Unemployment remained at 9.1%, no new jobs were added across the nation, and the situation is even worse in my beloved Garden State at 9.5%, a state whose supposed affluence (and alas taxes) leads the nation. What’s more sobering is that the unemployment figures dramatically understate the severity of the employment situation. How so?

The nation’s unemployment has now hovered around 9% for almost 3 years. What’s happened is that:

1. Many people given up hope of finding employment and have fallen out of the workforce, so they are no longer counted in the data.

2. Others have taken far lesser paying jobs that they previously had and are coping with ratcheting down their expenses.

3. Far more Americans are working part-time with no benefits or guarantee of income, not out of choice but rather because some work and income is better than none at all.

So the real unemployment/underemployment is really 2-3 times the stated figures. Furthermore, according to a recent survey by the Economic Policy Institute, almost half of American households state that they or a family member faced unemployment during the past year. And the gap between the wealthy and the poor has never been greater. 40 Million American now live in poverty (defined as roughly $22,000 for a family of four)

The economic instability our nation faces threatens our future and for all the talk of deficits, the solutions to our problems must lie in reducing unemployment as priority #1. Americans who lack jobs, have part-time jobs, or fear for their jobs, simply do not spend money. And without more robust consumer spending, our economy will caste along the bottom for months or years to come.

Our political system and our elected officials are now part of the problem, not the solution. They have been entrusted by the American people to “do the right thing” and provide leadership. Whether you are a Republican or a Democrat, the American people can not be happy with our representatives who willingly take our economy to the edge of a cliff and brazenly posture to make the “other guys” look bad.

Here’s what we really need to do to spur economic recovery:

1. We need to create jobs

The one really good way is to put more people to work repairing our roads, bridges, buildings. Heaven knows they are in need of repair. Last week’s storm in the Eastern U.S. makes these tasks more than a “nice to do”

2. We need real incentives for business to hire people.

Big stuff, not marginal incentives.

3. Our federal government must help states to a greater extent.

States need to put people to work—in real areas of need, not nonsense hack jobs as states have done in the past. Cushy makework jobs are a thing of the past.

Our nation will not move out of the current malaise without a real jolt to the economy. With high unemployment, we will never solve the nation’s deficit problem, nor will we move out of the current economic quagmire. We need the wisdom to realize that a few more years of the current economy will lead to a greater polarization of the “haves” and “have nots”, a scary thought, because that’s a prescription for a society with far deeper issues than we have today. Better to solve the problems right now, get us back on the right track, and deal then deal with serious longer term issues when we do.

What are your thoughts?

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