iNews

Updated: February 19, 2002
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“Good” economic news ignores working families
Reports of lower unemployment rates sound like good news for the economy and employees, alike. But most reports missed the crucial point. Unemployment is falling because the economy is so weak people in many parts of the country have given up searching for work.

“The labor market is not growing out of recession,” writes the Washington D.C.-based Economic Policy Institute. “Unemployment can also fall if enough job seekers give up, leave the labor market and are thus no longer counted among the unemployed.”

Unemployment fell slightly from 5.8% to 5.6% in early 2002. At the same time, the official “Employment Rate” dropped to its lowest level since 1994, as some 924,000 people left the civilian labor force. Meanwhile, the length of time people remain unemployed reached the highest level recorded since 1995 while the number of hours worked by people with jobs fell nearly 3 percent.

The signs of continued economic weakness show “the drop in unemployment does not imply the end of the recession,” EPI concluded.

Another day older and deeper in debt
American families are deeper in debt to credit card companies, banks and other lenders than ever before, government figures show. After paying for all necessities (food, shelter, clothing, etc.) the average consumer spends a record-high 96.3 percent of their remaining incomes. People are saving almost nothing.

Even worse, many people are spending more money than they have. Borrowing now outstrips disposable income by 22 percent -- another record high. (Disposable income is whatever money a person has after paying for necessities.)

Not only is household debt at a record high. So are interest payments and personal default rates, government figures show.

This shaky “house of credit cards” is bad news for an economy so dependent on steady consumer spending. It is even worse news for the millions of working families who find themselves trapped in debt to the moneylenders, with interest payments piling higher month after month.

Wonder about Privatizing Social Security?
Take the Test!
Advocates of investing Social Security funds in private stocks have been awfully quiet since the savings of millions of citizens were shredded by the collapse of Enron, the “dot com” sector and the national recession.

But soon, we’ll hear politicians complaining again that everyday Americans are being “denied” the rich returns of the private market and being forced to “settle” for Social Security.

Now, we can put their arguments to the test with an “on line” calculator. Go to www.women4socialsecurity.org/sscalc4/calculator.htm and enter your birth year and current income. The calculator projects your retirement benefits under the current Social Security system and the proposed combination of Social Security and a 2 percent diversion into individual private investment accounts.

The results may surprise many people. The current system would provide a person born in 1951 now earning $30,000 a year a maximum individual benefit of $997 a month, or $1,595 for a couple. The proposed privatized system would provide far lower benefits: $752 a month for an individual or $1,086 for a couple.

Why? Diverting billions of dollars from the existing Social Security fund into private accounts means billions less to pay future benefits. And additional billions will be needed to create and administer millions of new private accounts.

The web site explains all financial assumptions used in the calculations.

Business and labor unite; urge solutions to health care crisis
In a rare joint statement, AFL-CIO President John Sweeny and U.S. Chamber of Commerce President and CEO Thomas Donahue called this week for a unified push to resolve a health care crisis so severe “it endangers the well-being of our nation as a whole.”

“There were 39 million uninsured Americans at the end of 2000, before the economic downturn began. All indications show the recession is making a bad situation worse,” Sweeny and Donahue said. “Even during the economic boom of the 1990s, the number of uninsured grew by 10 million.”

The crisis is a vicious circle harming individuals and businesses, they argued. Because people without insurance “live sicker and die younger” they require treatments “more complicated and expensive than if the problems had been caught earlier.” The costs of that care are passed along to providers, insurers, businesses and consumers, driving medical costs further beyond the reach of more companies and individuals.

“Our unified goal is to make the problem of the uninsured our nation’s top health priority and to help America solve it,” they said, challenging others to demonstrate show “real leadership” and join in the effort.

The Kids are All Right!
Young Americans Fight for Worker Rights
You know the stereotype from TV: a young “slacker” (boy or girl) lives at home, parties all night to hip-hop music and techno, then snores the day away on the living room couch.

Here’s a picture you may like better. It’s taken from reality and shows young Americans deeply committed to the modern union movement.

Students in colleges (and even high schools) across the country are demonstrating – and even being arrested – to halt the sale of T-shirts, hats and other school paraphernalia produced with sweatshop labor. Thanks to successful campaigns by United Students Against Sweatshops, dozens of schools have agreed to purchase merchandise only from companies that respect worker rights, practice good health and safety and pay decent wages. The agreements provide for joint student-administration committees to periodically inspect and certify vendor shops.

USAS also battles for workers inside and outside America. Last year, 40 students at Harvard College, Cambridge, MA staged a three-week sit-in to protest pay scales so low hundreds of campus kitchen and maintenance workers lived below the poverty line. The protest drew support from public officials, including Senator Ted Kennedy, faculty groups, unions and international celebrities. It ended with Harvard agreeing to immediately raise the worker’s base pay to between $10.80 and $11.30 an hour.

More than 2,300 students have also joined the AFL-CIO’s Union Summer program since 1996, helping organize workplaces and spread the fight for social justice across the country. Union Summer proved so successful, the AFL-CIO has launched Law Student Union Summer and Seminary Summer, to involve future lawyers and religious leaders directly in the workers’ movement.

For information, contact: www.usasnet.org or www.aflcio.org/unionsummer .

Public demands severance pay for Enron employees
Thousands of letters are pouring in, urging Enron’s new CEO to provide severance pay to laid off employees, thanks to a campaign led by the AFL-CIO.

“Thousands of Enron workers have lost their jobs without receiving adequate severance payments in the wake of the bankruptcy filing by the company,” the letters to CEO Stephen Cooper point out. “Most of these workers also lost thousands of dollars--their life savings--in their 401(k) plan. At the same time, other executives and ‘valued’ employees received more than $100 million in bonuses.

“This outrage should be corrected. I am writing to support the demand of Enron's laid-off workers for full severance packages,” the letter concludes.

To send your own letter, go to www.unionvoice.org/campaign/enronworkers