Our structurally wretched economy

Submitted for your approval:

1. Vermont’s jobless rate rises for the fourth straight month. What’s worse, the number of employed Vermonters continued to drop: our employed workforce has dwindled by 4,400 since January 2012.

2. Break out the tiny violins, folks: Walmart’s sales are dropping and its 2013 outlook is dim, because its customer base — the working poor and middle class — can’t afford to buy their shit.

3. And as if on cue, here comes El Jefe General John McLaughry to tell us the real problem with our economy: the overly generous “cornucopia” (his word) of welfare benefits keeps Vermonters dependent on the public dole.

Taken together, this is what we get after three-plus decades of outsourcing, downsizing, rightsizing, productivity gains, union-busting, and a ruthless devotion to the immediate bottom line among corporate executives and Wall Street wise guys.

(This is why I have so much contempt for Bruce Lisman, who spent his entire career immersed in the Wall Street mindset — you know, the one that cratered the economy in 2008? — and who clearly buys into it whole-hog, and dares to wander around Vermont claiming to have all the answers.)

This is what you deserve, Walmart, for your years of cannibalizing local businesses, driving down wages, hardballing unions, and forcing your suppliers to cut and cut and keep on cutting. Really, you couldn’t see this coming? Look at this graphic, which shows the “middle class” as high as the 60th percentile not very far from poverty, and tell me you don’t understand why consumer purchasing power is “surprisingly” weak:

After the jump: discouraged Vermonters, Walmart schadenfreude, and a particularly noxious McLaughry ragespew.  

Vermont’s unemployment figure is actually a bit of a mixed bag. The initial rate showed a slight decline in July; but when the usual seasonal adjustments are applied, that drop turns into a slight increase. Either way, not statistically significant. And, as Labor Commissioner Annie Noonan pointed out, the number of people filing claims for unemployment insurance “continues to decline.”

The key word there is “filing.” That leaves out the unemployed who’ve stopped looking for jobs. Which brings us to the more disturbing figure, as reported by Paul Cillo of the Public Assets Institute:

According to the monthly household survey, 335,689 people said they were employed-a drop of about 500 from June and almost 4,400 since January 2012, the most recent peak.

Hey, boys and girls, can you say “jobless recovery”?

4400 fewer workers in a state the size of Vermont? I find that deeply troubling.

And, of course, it’s 4400 fewer Vermonters who can afford those luxurious trips to Walmart.

Wal-Mart Stores Inc., the world’s biggest retailer, said the weak global economy continues to batter its low-income shoppers.

… “The retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending,” [Walmart CFO Charles] Holley said in a statement, noting a “reluctance” among customers to spend on things items like flat-screen TVs.

Aww, jinkies. You lowball your workers on pay and bennies, and those miserable ingrates are “reluctant” to splurge on high-ticket electronics? Color me shocked.

Other tidbits from Walmart: “sporting goods and entertainment products like toys saw declines”… clothing sales were solid as “the discounter refocused its offering on basics like socks and no-frills jeans” … grocery sales were hurt by shoppers “trad[ing] down to cheaper products to save money.”

Go back and look at that wealth-distribution chart, and you’ll know exactly why consumers are “trad[ing] down to cheaper products” and “reluctant” to buy your shiny new TV sets.

The maldistribution of wealth isn’t “merely” a problem of social justice; it’s a huge impediment to our economy. Businesspeople ought to realize this — and economists certainly ought to. As long as more than half of Americans are barely scraping by, and have little or no financial security, our economy will be hamstrung. For their own sake, businesses need to pay their employees a living wage — and provide a sense of longer-term security so people can commit to car loans and mortgages and the like.

Oh, but John McLaughry would disagree. Citing the Cato Institute, a free-market megaphone “think tank,” he notes that Vermont’s total welfare benefit package ranks eighth in the country. Leaving aside the credibility of Cato’s ideology-driven “research”, let’s focus on El Jefe’s argument:

According to Cato, an out-of-work Vermonter can draw benefits worth $37,705, including everything — welfare, food stamps, housing aid, health care, LIHEAP, etc. (Presuming that a single Vermonter could actually qualify for top aid in all categories. But again, for argument’s sake, let’s let Cato be Cato.) Which means, its report says, that a recipient transitioning to the workforce would need to earn more than $42,000 just to equal the value of his/her “cornucopia.”

(Not that $37,000 a year is anybody’s idea of a cornucopia. Wonder how much El Jefe draws from the Ethan Allen Institute, a nonprofit whose sole raison d’être seems to be distributing the thoughts of John McLaughry and Rob Roper to a grateful populace. Yeah, we taxpayers indirectly foot that bill, since high-rolling conservatives can take a tax deduction for donating to EAI. Same thing for Cato. We’re paying for this swill.)

El Jefe then quotes the Cato conclusion:

…it is undeniable that for many recipients – especially long-term dependents – welfare pays more than the type of entry level job that a typical welfare recipient can expect to find. As long as this is true, many recipients are likely to choose welfare over work.

So, I guess, the problem isn’t the mass proliferation of shit jobs that don’t pay a living wage; it’s the “generosity” of our social safety net that allows  the unemployed to — and I quote — “enjoy a life unburdened by gainful employment.”

Oh snap! Well, I guess John McLaughry would know all about being “unburdened by gainful employment,” having been amply remunerated by EAI for doing nothing more than sharing his opinions.

McLaughry’s prescription, in case I haven’t telegraphed it already, doesn’t involve improving wages and working conditions; he wants to slash away at that welfare “cornucopia” so that working — even working two or three low-paying, part-time jobs with irregular shifts* — is preferable to enjoying that “life unburdened.”

*Many of which require their employees to be available at all hours with very little notice. That gives employers a lot of flexibility, but workers find it almost impossible to work more than one job, find child care, and commit to education or retraining.

Because, as he puts it, when people start working, they can “hopefully climb up the income ladder” to financial independence and prosperity.

Problem is, America isn ‘t a financial ladder anymore. As that chart clearly shows, it’s a long slow slog through the swamplands of low pay followed — at best — by a grueling rock-climb up an almost sheer cliff. And if you lose your grip, well, best get climbin’ again. We don’t want you “enjoy[ing] a life unburdened,” after all.

Oh, and even if you don’t have any money, please keep buying shit. If you do, maybe the economy will grow enough that you can get another crappy job.  If you don’t, well hey, “weak consumer confidence” is holding us back.

That, and our overly “generous” welfare programs.  

5 thoughts on “Our structurally wretched economy

  1. the figures cited are for “employment” not “jobs” and the former includes self-employment, much of which is not full-time

    in fact, seasonally adjusted non-farm payroll employment is up by 4,600 from a year ago

    http://www.vtlmi.info/CES.cfm?…

    therefore, it’s self-employment that’s declining, not traditional jobs; to some extent, this is not surprising as some of those who are self-employed want and prefer the stability of a job (such as that is these days) rather than the challenge of self-employment

    having said that, I don’t disagree with your general point

  2. It’s “blame the victim” season again in the desperate, perpetual struggle of right-wingers to find some morsel of “high ground” to cling to in a sea of damning evidence. Their avarice and pure meanness have destroyed the middle class dream and, ultimately, their own long-term fortune with it.  

    But that shoe is yet to drop.

  3. It’s going to get worse for Vermonters as Comrade Rutherford points out in his post.  Sequestratiom.  Obama–evryone’s Beloved Democrat–has DONE MORE DAMAGE ACROSS THE BOARD THAN bUSH.  Lisman, McClaughry, and the rest of their bunch of pigs are probably delighted that they can call for cuts in social programs now that Obama’s done the major shitwork for them.  

    The big battle with Repubs should now be over Voting Rights and the Attack on the Poor, the Women, the Children, the Elderly and Disabled.

    Big Hot Air from Bernie Sanders and Jello from President Huxtable can NOT cover up the fact that, it seems, the Repubs and Dems are all in it together.  And the people, in the middle between these two GANGS, are screwed.

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