Upwards for the American economy

There seems little doubt that the U.S. economy is on the rise after today’s employment and unemployment figures for February.

The figures suggest the creation of 192,000 new jobs last month, which is higher than predicted and the most since last spring. At the same time, unemployment fell for the third straight month, from 9.8 in November to now 8.9 percent, the lowest figure in two years. This means, however, that nearly 14 million Americans are still without work and that six million of those have been unemployed for over six months.

The new jobs are found exclusively in the private sector, while 30,000 people last month lost their jobs in the state and local public sectors. This figure reflects the nationwide budget problems with huge deficits in both federal and state governments. It is these budget problems that lie behind the ongoing intensive negotiations here in Washington on this year’s budget as well as behind the ongoing battles about state budgets and public employees’ pensions and wages and right to collective bargaining.

In Wisconsin, ground zero for this battle, the outcome is uncertain. The governor is threatening to lay off 1,500 employees in early April if no settlement is reached until then. But the state’s 14 Democratic senators persist in their “exile” thereby continuing to prevent the Republican majority in the Senate to vote, and pass, the governor’s drastic proposal, which includes the abolishment of the right to collective bargaining.

In Ohio, the Democratic members of Congress did not take the same drastic action. They stayed and voted, and lost, thereby failing to prevent a similar proposal from another Republican governor to become law. Not even the fact that six Republican members of Congress voted with the Democrats could stop Ohio’s public employees from losing not only their right to negotiate collectively but also their right to strike.

Meanwhile, the budget negotiations here in Washington about the cuts in this year’s budget, which has not yet been approved by Congress, intensified. The 61 billion dollars in cutbacks by the new Republican majority in the House of Representatives voted will not be accepted by either the Senate’s Democratic majority or President Obama. The negotiations, led by Vice President Joe Biden, are now about which major cutbacks the White House will accept. The final figure is unclear, but it is clear that the cuts will be in the billions of dollars and they will affect many laudable programs in various areas, not the least education and health.

The negotiators have until 18 March to agree. If they fail, the threat of a government shutdown will again be an issue. However, it seems that no one really wants this in view of the political implications of the shutdown under President Clinton in the mid-1990s. A final compromise seems likely.