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NOVEMBER 2003
Economic Fault Lines
Shaking Our Economy
by Rick S. Bender, President of
the Washington State Labor Council, AFL-CIO
Two
years after the official end of the recession, and the beginning of the
so-called recovery, the economic fault lines in our state continue to
shake. On a national “Richter
Scale” report of economic indicators, Washington state measures 4.4,
joining 29 other states with scores of 4 or more on the scale.
The indicators include fundamental benchmarks on unemployment,
poverty, health care coverage, personal bankruptcies and household income.
Unemployment in our state has grown 2.1 percent since January 2001, when
the rate was 5.5 percent. Finding
new jobs is tough for Washington’s unemployed workers.
In September, close to 40 percent of those who had exhausted their
benefits, had not found work by the time their unemployment checks ran
out.
Staggering job losses, particularly in
Washington’s manufacturing and information sectors, created our high
unemployment rate. We’ve
lost 69,800 jobs between January 2001 and September 2003.
What is so worrisome about this loss is that these were high-quality,
family-wage jobs with decent health benefits.
The new jobs being created in our “Wal-Mart” economy are
low-wage, dead-end jobs with no decent benefits.
All jobs are NOT created equal!
Other worrisome economic indicators measured on this “Richter Scale”
shows health care coverage becoming a big problem, with the share of
uninsured Washingtonians increasing by 100,000 residents in the last
couple of years. Another
measure is the poverty rate which is creeping upwards, along with the rate
of personal bankruptcies. It
is no coincidence that the single biggest cause for personal bankruptcy is
not reckless consumer purchasing, but expensive medical bills.
It is cold comfort to know that Washington isn’t alone with these
problems. In fact, the states
with the highest “Richter Scale” scores are North Carolina and
Mississippi. This dismal outcome
shows the folly of pursuing a low-wage, low-standards and low-road
approach.
Indeed what is striking across the entire country is the pain in
the falling standard of living for all of working America.
Median household income actually declined in 38 states between 2000
and 2002. Washington was one
of only 13 states to see a tiny increase in household income, up a grand
total of $388. And we
may soon see that small advantage disappear.
There’s trouble ahead. In
January, new unemployment insurance rules will force a cut in jobless
benefits. Unemployed workers
who didn’t work the exact same number of hours every week may get
benefit cuts of up to $200 a week. The
new “four-quarter averaging” formula for calculating benefits which
was backed by the business lobby in Olympia, will create a further erosion
of the living standards for the most vulnerable Washington workers --
those who are trying to find a job in this lousy economy.
Our top priority should be improving our economy by putting people
back to work. Claims of
recovery based on stock market tickers and fancy economic statistics
don’t tell the true story of what’s happening in our state and
national economy. Cheerleading
about the economy won’t do the trick.
Job cuts in October this year reached their highest level in the
past 12 months, with businesses announcing 171,874 few workers working, a
125% increase from the September cut of 76,506 jobs.
To create a real economic recovery, we need to get people working
in decent family wage jobs with decent health benefits.
That’s the only way to achieve a return to the economic health of
the 1990’s, when we had a state economy that was the envy of every other
state in the nation.
The detailed statistics in this column are included in the full "Economic Richter Scale" report. Download this 5-page report, a 435 KB PDF file.
Rick Bender is President of the
Washington State Labor Council, AFL-CIO,
the largest labor organization in the state.
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Copyright © 2003 Washington State Labor Council, AFL-CIO