Tuesday, August 3, 2010

The Real Story on Unemployment and Corporate Tax Cuts

It's very difficult to get too excited about the news that there have been jobs created in June, because it does not reflect the true unemployment situation.

I have spoken to so many people who are either forced to work part-time or pick up odd jobs when or where they can.

One couple I met had both worked for the same firm, making a good wage with full benefits. Because they got a severance package they weren't entitled to EI.

With two children that money soon got eaten up. He is now working at Harvey's for little more than minimum wage and she is working at convenience store. No benefits, so drugs and dental bills come out of their pockets.

I spoke with someone else who had been with the same company for 17 years. Again severance so no EI. He is now working as a labourer for $ 12.00 an hour. No benefits and if it rains he doesn't work.

Yet they would be among those "good news" stories of having found employment.

This is a fundamental problem in Canada. Good union jobs are disappearing and many people are now living hand to mouth. And yet this government is going through with six billion dollars in tax cuts for corporations. I think the only way they should get any tax cut is if they hire people or at least commit to no lay offs. But sadly when the economic downturn first hit, employees were the first to go.

And yet we still bailed out these companies. We even bailed out the banks to the tune of 125 billion dollars, and did they hire more people? No. Instead they announced record profits and gave their executives 8 billion in bonuses.

The same thing is happening in the United States. According to Bob Hebert in the New York Times:
The treatment of workers by American corporations has been worse — far more treacherous — than most of the population realizes. There was no need for so many men and women to be forced out of their jobs in the downturn known as the great recession. Many of those workers were cashiered for no reason other than outright greed by corporate managers. And that cruel, irresponsible, shortsighted policy has resulted in widespread human suffering and is doing great harm to the economy.

“I’ve never seen anything like this,” said Andrew Sum, an economics professor and director of the Center for Labor Market Studies at Northeastern University in Boston. “Not only did they throw all these people off the payrolls, they also cut back on the hours of the people who stayed on the job.”

And Paul Krugman believes that it may be a sign of the times that unemployment will become "structural" and virtually ignored:
I’m starting to have a sick feeling about prospects for American workers — but not, or not entirely, for the reasons you might think. Yes, growth is slowing, and the odds are that unemployment will rise, not fall, in the months ahead. That’s bad. But what’s worse is the growing evidence that our governing elite just doesn’t care — that a once-unthinkable level of economic distress is in the process of becoming the new normal.

And I worry that those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is “structural,” a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.
Instead our government is preaching austerity and there is a real concern that there will be a mass layoff in the civil service.

The Canadian Labour Congress is sounding the alarm: Good news on jobs undercut by losses in manufacturing

There was some good news regarding employment in Canada in June but it was undercut by a continuing loss of jobs in the manufacturing sector, says Ken Georgetti, president of the Canadian Labour Congress. Georgetti was responding to the release by Statistics Canada of its monthly Labour Force Survey.

Statistics Canada reported that employment rose by 93,000 in June but almost half of those jobs were part-time and there were job losses in manufacturing. It is always good news when jobs are created,” Georgetti says, “but too many of these new jobs are part-time and precarious.” Georgetti says he is especially concerned with the continuing loss of jobs in the manufacturing sector.

More than 14,000 jobs were lost in manufacturing between May and June. “The number of manufacturing jobs is at its lowest level in Canada in 35 years,” Georgetti says. “This is frightening and should be of great concern to our governments at all levels. Canada needs an industrial strategy and governments must continue with economic stimulus measures that have saved us from sinking into recession,” he adds.

Unless we can get the media to do their homework and the government to do their job, this is only going to get worse. Neoconservatives hate unions and have always sought ways to bust them. But what they fail to understand is that good union jobs are what keep this country going. If everyone is making minimum wage, there will be no buying power, so everyone will suffer.

We have got to get back on track and tell Harper and his crew to hit the rails.

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