Economic Freak Out!

Feb 6, 2023

The January U.S. government jobs report was supposed to be so good, the New York Times proclaimed, “The American labor market is still soaring.” Harvard economist Jason Furman reacted even more strongly: “Stunning job numbers… it took time for me to recover.” And Dean Baker, the liberal economist, expressed pleasant surprise: “In summary, this is a surprisingly strong report.”

But behind the headlines and praise reported in the news media, the government statistics show a very different picture.

Take the government report that the unemployment rate dropped to 3.4%, which was advertised as the lowest it’s been since 1969. In fact, that unemployment rate encompasses only a small part of those without jobs. In another part of the same report the government admits that 38% of the workforce is not working! That amounts to 100,130,000 people age 16 and older.

Most of these jobless are so discouraged by the lack of job prospects, they just gave up looking for work. But because they are not looking for work, the government doesn’t count them as unemployed ... despite the fact that they are not working! And this huge reserve of people without jobs has been growing steadily for at least two decades—despite all the happy talk from the government and news media.

The government also reported that wages had increased by 4.4% over the last year—which Harvard economist Jason Furman said was “reasonably strong.” But that too is very misleading. Even the government’s own statistics show that prices have been rising much faster than wages.

So, less and less can most working people afford to buy the same things that they had bought before. Retail sales, as well as spending on services, including rent, haircuts and the bulk of bills are all dropping. And spending on big ticket items, such as on homes and cars, is dropping even faster.

"The U.S. Consumer Is Starting to Freak Out,” was the headline of a January 31 article in the Wall Street Journal.

Of course, most working people don’t believe the economy is improving, no matter what the news media and the “experts” say. In an AP-NORC survey, three-quarters of Americans described the economy as “poor,” with only 25% saying it was “good.” Another poll found that 75% of the population believes that the economy is either in a recession or about to go into a recession.

They are absolutely right! The economic crisis is getting worse. The working class, which produces everything and makes everything run, is increasingly being impoverished. All the more reason for workers to organize together to fight to defend their interests.