OLYMPIA, July 24.—Some people are calling it the silent crisis that has been exposed by the recession – a growing class of long-term workers who don’t show up in the unemployment stats because the situation seems hopeless. But what to do about it? It seems a little like talking about the weather.
A showcase hearing for the House and Senate labor committees Monday pointed up plenty of troubles but no clear solutions, beyond the usual suggestions for public works spending and a new tax system, or more business-friendly policies with regard to regulation and wages. All that aside, the standout feature of the marathon session was the testimony from recently laid-off workers, most from the Kimberly-Clark plant in Everett.
Darrell Moffatt, a 36-year employee, said he had applied for 60 jobs since the final whistle blew on April 16. He has gotten two interviews. “They look at you – even the two interviews I had, yes, they gave me the interview. They patted me on the back and thanked me for coming up. But you can tell when you walk through the door, he’s bald, he’s gray, he looks old, we’re not going to hire him, but we’ll give him the interview just for laughs and giggles. That is the way it is. I understand there are laws that say you cannot discriminate because of age, but employers do and they will continue to.”
There’s no getting around the misery and shame of unemployment – perhaps worse today than during the Great Depression, said history professor James Gregory, chair of the Harry Bridges Labor Center at the University of Washington. At least back then, when people lined up for the dole, they knew they were not alone, he said. Today there isn’t much of a sense of community, even if the community of the unemployed is enough to populate Seattle. When underemployment and long-term unemployment is considered, Washington’s total problem is far higher than the 8.3 percent reported in the official unemployment statistics, or about 293,000 people. It’s more than double, 17.6 percent, roughly 600,000 people, Gregory noted. And for certain categories of the population, particularly youth of color under age 25, “you’re facing a job market the likes of which arguably was not even this bad since the 1930s.”
Scale Much Bigger
Even those statistics, compiled by the Bureau of Labor Statistics, fail to convey the full picture, he said, because some youths don’t enter a job market that holds no opportunity, and older workers without options simply drop out. “Many of those who lose jobs – this is also not counted in the statistics because it has to do with what kind of jobs people have – many who lose jobs end up taking jobs at lower skill levels. We are talking about highly trained construction workers taking jobs as security guards, midlevel executives now working retail, bright young college graduates loaded down with student loans who are waiting tables, and who are waiting for the kind of opportunities they have been promised – none of that shows up in the numbers we use. Those are big, big problems on their own. So the scale of the problem is much, much bigger than we are aware of.”
Paul Trause, commissioner of the Department of Employment Security, said the state lost 205,000 jobs during the current recession – which technically started in 2007 and ended in 2009, though it may not feel that way to anyone in the job market today. By June the state had regained some ground, gaining 123,000 jobs in the private sector, offset by a loss of 12,000 in the public sector.
Since the onset of recession the state has paid out $14 billion in unemployment benefits, including federal funds which extended the length of time that claims might be filed. Trause said that the money, counting the multiplier effect, pumped $21 billion to $28 billion into the economy. But as workers exhaust benefits, recovery has yet to affect some sectors. Construction lost 60,000 jobs, and has yet to show improvement. Manufacturing lost 40,000 jobs, about half of which have been recovered. Some 102,000 people have already exhausted benefits and that number will reach 180,000 by the end of the year, Trause said.
The classes of workers most affected are the young, people of color, and those who are least educated, he said.
What to do about it, though – that’s another question. More government programs? Gregory suggested the state and nation ought to embark on public works construction on a New Deal scale. Marilyn Watkins of the Economic Opportunity Institute said that it might be time to dust off the decade-old recommendations of the state tax commission and consider a more progressive tax structure — code for an income tax. “I think we need to start facing this head-on,” she said. “We have a tax structure here in this state that was based on the economy of the 1930s. It is no longer working for us. We have a serious structural deficit in terms of our revenue that will cause us problems even once the economy recovers.”
And from business, of course, the view is that perhaps the state ought to consider changes to policies that discourage the hiring of entry-level workers – like regulations which restrict the hours and duties of teen-age workers, or the state minimum wage, which climbs every year because of automatic formulas and is now the highest in the country. Some $17 billion has been spent on transportation and other public works in this state since 2009, said Patrick Connor of the National Federation of Independent Business.
“I think it is time for us to find a committee in the Legislature that wants to talk seriously about what the impediments to hiring are,” he said. “As much as a small business may want to bring on a new worker, you simply cannot do that out of the goodness of your heart. A business will not survive if it cannot make a profit. You have got to pay that employee their salary, their benefits, the taxes that go along with it, as well as having the equipment and infrastructure for them for them to undertake that job successfully. But until we start having a serious conversation about some of the threats that loom out there to employers that are keeping them from hiring, I don’t think that we’re going to find a quick solution to the unemployment problem in this state. And that is a shame for the workers in the state who desperately need jobs, and for the employers that are afraid of taking that risk to hire someone because the odds are stacked against us.”