- Former Labor Secretary Robert Reich writes today:
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- The basic assumption that jobs will eventually return
when the economy recovers is probably wrong. Some jobs will come back,
of course. But the reality that no one wants to talk about is a structural
change in the economy that's been going on for years but which the Great
Recession has dramatically accelerated.
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- Under the pressure of this awful recession, many companies
have found ways to cut their payrolls for good. They've discovered that
new software and computer technologies have made workers in Asia and Latin
America just about as productive as Americans, and that the Internet allows
far more work to be efficiently outsourced abroad.
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- This means many Americans won't be rehired unless they're
willing to settle for much lower wages and benefits. Today's official unemployment
numbers hide the extent to which Americans are already on this path. Among
those with jobs, a large and growing number have had to accept lower pay
as a condition for keeping them. Or they've lost higher-paying jobs and
are now in a new ones that pays less.
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- Yet reducing unemployment by cutting wages merely exchanges
one problem for another. We'll get jobs back but have more people working
for pay they consider inadequate, more working families at or near poverty,
and widening inequality. The nation will also have a harder time restarting
the economy because so many more Americans lack the money they need to
buy all the goods and services the economy can produce.
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- Reich is only confirming what many others have said:
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- JPMorgan Chase's Chief Economist Bruce Kasman told Bloomberg:
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- [We've had a] permanent destruction of hundreds
of thousands of jobs in industries from housing to finance.
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- The chief economists for Wells Fargo Securities, John
Silvia, says:
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- Companies "really have diminished their willingness
to hire labor for any production level," Silvia said. "It's really
a strategic change," where companies will be keeping fewer employees
for any particular level of sales, in good times and bad, he said.
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- And former Merrill Lynch chief economist David Rosenberg writes:
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- The number of people not on temporary layoff surged 220,000
in August and the level continues to reach new highs, now at 8.1 million.
This accounts for 53.9% of the unemployed - again a record high - and this
is a proxy for permanent job loss, in other words, these jobs are not coming
back. Against that backdrop, the number of people who have been looking
for a job for at least six months with no success rose a further half-percent
in August, to stand at 5 million - the long-term unemployed now represent
a record 33% of the total pool of joblessness.
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- And see this... http://www.msnbc.msn.com/id/33384835/ns/business-stocks_and_economy
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- Heck of a job, Larry, Tim and Ben.
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