The Electrical Worker online
June 2012

Q&A on the Economy
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Trying to get a grasp on what is happening in the economy is no easy task. Reading through the numbers, rhetoric and half-truths to find out how things really are is a challenge. The Electrical Worker crunched some numbers and checked with the experts to help answer some of your questions about how we can get the economy back on track.

Q: The media keeps talking about an economic recovery. What's the truth?

A: Officially, the economy has been in a recovery since 2009. The unemployment rate has slowly declined in the last two years, with more than 212,000 jobs being created in the first part of 2012.

Q: So if we're in a recovery, why doesn't it feel like one?

A: If you're wondering where this recovery is, you're not alone. The problem: the economy is growing, but not at a fast enough pace to get America out of the colossal ditch created by the Great Recession. The 2008 crash was bad — real bad. It wiped out more jobs than the last four recessions combined. And today more than 12 million Americans are still out of work — more than 8 percent of the population. Of those, nearly half have been looking for work for six months or more. The economy has stopped the bleeding and started to grow again, but at not nearly the pace needed to cover the enormous 10 million job deficit created by the 2008 economic collapse.

Q: So why do I keep hearing about corporate CEOs and the 1 percent making crazy salaries and big profits?

A: Because it is true. It may be a recession for us, but for America's CEOs and the top 1 percent, happy days are here again. Profits are higher now than they were before the crash, with more than 90 percent of all income generated in 2010 going to the top 1 percent of income earners.

Q: Ok, so if corporate America is making big money, why isn't it hiring?

A: There are three big reasons why job growth has been so weak in comparison with previous recoveries.

  • Outsourcing. Increased overseas presence by many American multinationals means more jobs in China and India, and fewer in Ohio and Michigan.
  • Low wages. Wages have been declining for more than 30 years, a trend accelerated by the recession. Smaller paychecks mean less consumer spending, which translates into fewer jobs. The long term trend of swapping decent paying steel and auto jobs with positions at Walmart and Taco Bell has resulted in less money in the community and more reliance on debt just to make it.
  • Government cutbacks. When private sector hiring freezes up, traditionally the government steps in, pumping money into the economy in hopes of restarting growth. It's what Franklin Roosevelt did during the New Deal and it was the idea behind the 2009 stimulus package. Critics have attacked the Recovery Act as a big boondoggle, but the majority of economists are in agreement that it stopped the recession from turning into a depression. Even Sen. John McCain's former economic adviser Mark Zandi says it created or saved 8.5 million jobs. But that money is about to run out. New federally funded infrastructure projects — vital to getting construction workers back to work — have been put on hold since 2010 thanks to the conservative majority in the House of Representatives, which has blocked nearly every piece of jobs legislation.

Q: So can anything be done?

A: Yes, but it requires major policy changes — on both Capitol Hill and in the statehouse. So far the debate over the last year has largely revolved around slashing budgets and how to deal with the ballooning deficit. The national debt is a looming concern, but the solution isn't giving up on putting Americans back to work or postponing modernizing our economy for another generation. If you're unemployed, your top goal isn't to figure out how to live without a paycheck — it's to a get a new job. You will need to cut back until then, but without a plan to get back to work, you don't have much of a future. But that is in essence what those who claim that government spending is our main problem are saying. Economist Paul Krugman estimates that slashing enough spending in order to balance the budget would push unemployment up past 15 percent — not to mention putting Social Security and Medicare out of business. That's not an option. Without economic growth and more jobs, we will never dig ourselves out of the hole we're in.

Q: So what can Congress and the White House do?


  • First off, our industrial infrastructure is a mess. The American Society of Civil Engineers gives it a grade of "D," warning that the electrical grid system is so outmoded that it is in danger of breaking down without at least $670 billion in new investments by 2020. This is while China is investing billions in upgrading its roads, railways and power grid. If you're a boss, would you rather hire an "A" or "D" student? A serious financial commitment to improving our infrastructure not only creates good jobs in the short run, but makes the U.S. economically competitive over the long run by making it more attractive for companies to stay in the U.S.A.
  • Manufacturing. When a factory owner inquires about setting up shop in China, government officials roll out the red carpet. In the U.S., award-winning plants shut down without as much as a peep from elected officials. Germany, South Korea and China all make maintaining a strong manufacturing base a political priority, which has translated into more jobs and strong trade surpluses for those countries. We need a comprehensive policy to attract and maintain manufacturing jobs by investing in research and job training as well as beefing up enforcement of trade regulations to prevent nations like China from artificially cheapening their currency and undercutting our exports.
  • Make it easier for workers to organize. It probably isn't news to you that we need to fix our labor law system, but what does it have to do with good jobs? A lot. Stronger unions not only mean higher wages and benefits, but help make sure economic growth doesn't just flow to the 1 percent. More powerful unions also give workers a voice at work, which translates into better benefits during good times and a fairer distribution of pain during the bad times.
  • We need a raise. It's pretty simple — less money in our pockets means less consumer spending which means weak or nonexistent economic growth. Working families' wages have stagnated, while the inflation-adjusted minimum wage is lower than ever. It's time for a raise in both the federal and state minimum wage.

Q: Sounds good. So why isn't Congress doing anything?

A: Because elections have consequences. When you vote for the candidate whose priority is more tax cuts for the wealthy, union-busting, slashing Medicare and Social Security and obstructionism, that's what you get. This election year, study what each candidate has to say: on infrastructure investment, on manufacturing and on boosting the wages of working Americas. Make it about priorities, not party.


Beutler, Brian, "40 Years of Workers Left Behind," Talking Points Memo, May 2, 2012

Halsey III, Ashley, "Electrical Grid is Due for a Costly Overhaul," Washington Post, April 27, 2012

Klein, Ezra, "Zandi: Financial rescue and stimulus responsible for saving or creating 8.5 million jobs,", July 28, 2010

Konczal, Mike, "Welcome to the 1 Percent Recovery,", March 5, 2012

PolitiFact, "George Will says most recent recession killed more jobs than previous four recessions combined,"

Wiseman, Paul, "AP survey: Steady job gains to sustain US recovery," Associated Press, May 3, 2012


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