JOBS FOR ALL NEWSLETTER
Supplement 3 Fall 2012; 2, Fall 2008; 1, Summer
Year-End Report 2005
Excerpts Summer 2002
From the Chair: Debunking a Phony
Is the Recession Over?
Unemployment Benefits Extended but System Needs
Rising Retirement Insecurity
A Crucial Benefit for Minorities
ILO Hosts Global Employment Forum
Chair: Debunking a Phony "Crisis"
By Gertrude Schaffner Goldberg
With the election of the pro-privatization
Bush administration, the National Jobs for All Coalition has stepped
up its efforts to debunk the phony Social Security "crisis."
The phony crisis is the alleged Social Security shortfall, trumped
up by anti-government forces and pro-privatizers. The real Social
Security crisis is the campaign to invest part of the trust funds
in the stock market. That campaign is undermining confidence in
the nation's most successful social program. If it prevails, Social
Security will indeed be in financial trouble--and so will the
millions of people whose benefits would be cut.
Coalition fights privatization
What are we doing to defeat privatization and support and strengthen
Social Security? The Coalition has issued a "Social Security
Packet," joined protesters in the street, and sent our message
to the media.
Meetings in Washington this spring convinced Coalition leaders
that public information is crucial for dispelling the myths circulated
by Social Security's opponents and winning the fight against privatization.
Consequently, the Coalition updated "Social Security Is Not
in 'Crisis,'" a piece originally published in 1999 that debunks
the shortfall as well as the privatization fix. Two newer pieces,
"Social Security and Minorities" (see page ) and "Social
Security Isn't Just for Seniors," show the wide-ranging benefits
of Social Security.
Our "Social Security Packet" also includes a reprint,
"Women and Social Security," issued by the National
Council of Women's Organizations. And, to include analyses of
both the latest forecasts by the Social Security trustees and
the Bush Commission's privatization plans, we've added "Social
Security Shortfall Long Way Off," a piece by Christian Weller
of the Economic Policy Institute. The packet also includes "Guidelines
for Action" and a "Summary of the Social Security Program."
The Coalition has distributed part of the "Social Security
Packet" to our members, posted its components on the our
Web site, made it available for classroom use, and distributed
it at demonstrations and public meetings, particularly when members
serve as speakers. We urge members to use and distribute the packet
when they attend meetings and visit their senators and representatives;
we encourage teachers to use it in classrooms; and we recommend
that the material be used for letters to editors and op-ed articles.
Bernice Crane, who recently joined our executive committee, is
in charge of outreach. About 100 media representatives, legislators,
and labor officials have already received the "Social Security
Packet." To reach a wider audience, the Coalition, along
with the Labor Institute and the National Council of Churches
(NCC), is raising funds to popularize and illustrate parts of
the "Packet" and to finance wider distribution. We are
grateful for a grant from the Sunflower Foundation that has already
provided support for our Social Security Campaign and made it
possible to adapt one of our basic movement pieces, "Employment
Statistics: Let's Tell the Whole Story" (Uncommon Sense 4)
for a wider audience.
To sharpen its message and coordinate distribution, the Coalition
formed a Social Security Task Force. The group includes representatives
from the NJFAC executive committee, Karen Hessel, deputy general
secretary of the National Council of Churches and chair of the
NCC's Women's Network, and David Langer, chair of the employee
benefits committee of the Actuarial Society of Greater New York.
When Treasury Secretary Paul O'Neill came to Wall Street last
fall to launch a $20 million pro-privatization campaign, Coalition
members were among those to greet him. Exceeding his boss's public
pronouncements, O'Neill stated at the time in an interview with
the Financial Times that "able-bodied adults should save
to provide for their own retirement and health and
Coalition members joined a street meeting to protest O'Neill's
position and the Wall Street initiative. The protestors included
the Joint Public Affairs Committee for Older Adults, New York
Seniors, the New York Central Labor Council, District Council
37 of the American Federation of State, County and Municipal Employees,
the AFL-CIO, which was represented by its Treasurer Richard Trumka,
a member of the NJFAC advisory board, and members of Congress,
including Jerome Nadler (D-NY). I had the opportunity to speak
at the rally, which attracted print and TV coverage.
The Coalition's campaign to protect--and improve--Social Security
is another opportunity to send a message about our basic issue:
that full employment-more people working at livable wages-is the
way to solve or reduce many of our most pressing problems. When
we took aim at welfare "reform," we pointed out that
real reform had to include JOBS FOR ALL AT LIVABLE WAGES.
In the case of Social Security, full employment would mean that
more people are contributing to its trust funds and fewer are
forced to retire early and collect benefits. Note how a few years
of low official unemployment have extended the life of the trust
funds-even with the unduly pessimistic economic assumptions that
the government uses. That's why we say, "The best insurance
for Social Security is full employment."
Gertrude Schaffner Goldberg is director of the doctoral program
at the Adelphi University School of Social Work and NJFAC Chair.
the recession over? By
No sooner was it announced in November
2001 that the recession had started the previous March, than some
were already declaring it at an end. ut that announcement must
have rung hollow to the increasing numbers of unemployed.
In April, at the time of this writing, unemployment was 6%, up
from a low of 3.9 percent in October 2000. Since then, another
3.1 million people have joined the ranks of the officially unemployed.
Black unemployment is again double-digit. Consumers, however,
seem to be optimistic; and the stock market has recovered some
of its fall. Alan Greenspan and the Fed are confident enough to
have stopped cutting interest rates.
What's going on? Despite the persistence of unemployment, there
are reasons to believe that the recession, whether it is over
or not, is not as deep as somead feared, but even so, chronic
imbalances threaten the nation's future economic health.
What braked the developing recession? Many factors were at work:
- The Federal Reserve's 11 small interest rate cuts last year
encouraged auto companies to offer cars at interest-free loans
and households to refinance their mortgages, then spend the
- Government spending has gone up, specifically federal spending
on the military. The surge, which started in October, has continued
into thismonth at a yearly rate of more than $100 billion. Additional
spending on highways, schools, Medicaid, and unemployment insurance
- The tax cut--not the big one, targeted by the Bush Administration
to those with income above $130,000 a year but the small one,
spread over most taxpayers that went into effect this year--has
provided an economic stimulus. The tax rebates of last year
may have also helped.
- Consumer spending, which is two-thirds of economic activity,
has remained strong despite higher unemployment and high debt,
helped by the tax changes.
But two types of spending are continuing or future sources of
- Business investment--adding structures or equipment--is being
hampered by partially idle factories. Businesses in the fourth
quarter continued to cut investment, a key reason for the economy's
weakness. After-tax profits of U.S. corporations fell nearly
16 percent in 2001, the first annual drop since 1982. Profits,
a major source of financing, indirectly affect investment.
- Rising state and local deficits have forced budget cuts, which
will act as a drag on the economy.
Chronic imbalances remain, and threaten expansion:
- Unemployment and unemployment benefits: However low unemployment
in the 1990s (at their best, rates just under 4 percent), there
are always millions of unemployed workers, official and unofficial.
Only about two out of five of the officially unemployed collect
benefits. This is particularly absurd, as their spending, much
more dependable than that of higher income groups using their
tax reductions, helps to offset recession
- Lagging pay: Despite modest improvements toward the end of
the 1990s, private sector average hourly pay (in inflation-adjusted
dollars) is below what it was in 1973. This wage crisis, afflicting
especially younger workers, has limited workers' spending and
- Inequality: Income inequality has widened over the last 25
years. The distribution of family income, virtually unchanged
from the end of World War II until the late 1960s, has sharply
worsened since then. Both the absolute income and the share
received by the bottom half of the population have fallen. The
poverty rate, which by 1973 had dropped sharply from its postwar
peak, has since risen.
- Consumer debt: It is not surprising that lagging pay has been
accompanied by a rise in consumer debt in relation to income,
an upsurge that began in the 1970s. Over the last several years,
consumer debt continued its rise at roughly 8 percent a year--far
faster than household income.
- Business debt and current profits: According to economist
Dean Baker's analysis, manufacturing profits fell by 48.8 percent
between 2000 and 2001. The gloomy profit picture is a consequence
of higher depreciation rates, as shorter-lived investments,
like computers, need to be replaced more quickly. Business debt
has expanded rapidly, and poses a problem when the means of
servicing it-profits-are weak. A Federal Reserve paper reports
that "viewed as a share of GDP [output], such debt has
now reached unprecedented heights."
- International debt: Our chronic trade deficit, now at a yearly
rate of nearly $400 billion, has accumulated an enormous debt,
financed by our trading partners. The United States is now the
world's largest debtor. If the U.S. debt were denominated in
a currency other than its own dollar, we'd long since have been
subject to the tender mercies of the International Monetary
These chronic weaknesses-which have persisted for 25 years throughout
expansions and recessions--affect the ability of the economy to
The end of the recession may create an illusion that all is well.
But a long-term cure to profound economic problems-inequality,
chronic unemployment and lagging pay for the poorest and middle-income
workers--will require significant changes in public policy.
Economist June Zaccone is a member of the Coalition's executive
Benefits Extended--But System Needs Repair By Helen
The economic recovery package enacted in
March makes many jobless workers in every state eligible for temporary,
emergency unemployment insurance benefits.
Federally funded, these last for up to 13 weeks after a worker
still looking for a job runs out of regular, state-financed UI
(generally after 25 weeks). Jobless workers in some states can
also get an additional 13 weeks of federally-financed benefits,
but only if the number of unemployed collecting benefits reaches
4 percent of their state's labor force. This doesn't help unemployed
people in most states.
Ironically, a crisis is looming in New York because statewide
its unemployment is too low to set off the trigger. So the jobless
in New York City, with heavy unemployment, do not qualify, even
with the Big Apple's economy still reeling from the aftermath
of 9/11 superimposed on a faltering local economy with large numbers
of former welfare recipients.
Clearly, the federal-state UI program- the main safety net for
unemployed workers since 1935-needs overhauling. Now, states must
meet certain federal standards but set their own rules governing
coverage, eligibility, benefit amounts and revenues. The result,
a recent report called Failing the Unemployed shows, is
a patchwork quilt rife with shortcomings and inequities.
Jointly issued by the Economic Policy Institute, the Center on
Budget and Policy Priorities, and the National Employment Law
Project, the state-by-state examination of unemployment insurance
systems finds, for example, that, nationally, only about two out
of five of the jobless receive UI-a ratio that sinks to one in
five in Louisiana and rises to nearly three out of four in Massachusetts.
Unemployed people most in need of benefits-low-income and part-time
workers, recent labor force reentrants, former welfare recipients
and women-are most likely to be ineligible to receive them. And,
if eligible, meager UI benefits, which vary widely among states,
typically replace less than half of a worker's lost wages. In
some states, the maximum benefit is below the government's paltry
poverty standard for a three-person family.
Failing the Unemployed rates states on five critical areas:
eligibility requirements, benefit levels, revenue, trust fund
adequacy and recession preparedness. Twenty-three failed outright
and many others just squeaked by with the equivalent of a "D."
The report's recommendations include expanding benefit eligibility,
better benefits, and tax policies that increase employer obligations
and insure the adequacy of state UI trust funds. The report is
available at http://www.epinet.org/briefingpapers/bp122.html.
Retirement Insecurity, By Gregory
As the Bush administration
and its allies in Congress and right-wing think tanks persist
in their campaign to privatize Social Security, reality is biting
The Enron scandal and the stock market decline have
focused attention on the risk of relying on individual savings
accounts like 401(k) plans.
For privatization advocates, the Enron demise amounts to a political
landmine because thousands of Enron employees who had dedicated
most of their 401(k) savings to the company's stock lost much
of their retirement funds.
"Corporations have saved billions of dollars as they have
stopped offering their workers a traditional pension with a guaranteed
income," said Gertrude Schaffner Goldberg, chair of the National
Jobs for All Coalition. "And just as corporations are destroying
the traditional pension, privatization supporters will ruin the
Social Security system if they succeed in their goal of establishing
individual savings accounts, which means government will no longer
guarantee a minimum retirement income for recipients."
Meanwhile, the Social Security trustees continue
to push back the year in which the trust funds will be empty.
The most recent projections indicate that the trust funds will
dry up in 2041, which is twelve years later than predicted in
But despite good news for Social Security and bad
news for private schemes, ideological-driven organizations like
the Cato Institute continue to press for privatization.
"We have always disputed that Social Security faces a crisis,
and the government's figures are showing that the doomsayers'
warnings are overblown," said economist Helen Ginsburg, a
Coalition executive board member and author of the Coalition's
"Social Security and Minorities" ("Uncommon Sense
25"). Many analysts say the projected shortfall could be
largely addressed by raising the cap on the regressive payroll
As the drop in the Stock Market and the Enron debacle
point to the problem with introducing individual investment accounts
in the Social Security, it is increasingly clear that many of
the privatization advocates are driven by ideology rather than
sound public policy.
Normally, blue-ribbon presidential commissions allow,
in theory, for differing positions. But the Bush Social Security
panel was entirely stacked with people who favor privatization.
Five of the 16 members have ties with the rabidly free-market,
anti-government Cato Institute, which has been part of a global
effort to privatize social security systems for a generation.
Unable to agree upon a single plan, the Bush commission
late last year recommended three privatization options. All would
reduce retirees' living standards because the amounts in individual
accounts would not offset benefit cuts. All would require a massive
infusion of tax dollars to cover transition costs, undercutting
the privatizers' assertion that individual savings accounts would
address the Social Security's alleged funding crisis. One proposal
would raise the retirement age for workers. And the diversion
of funds to private accounts would lead to a reduction in benefits
for workers with disabilities and survivors of deceased workers.
401(k) plans fall short
While the Stock Market boom of the go-go '90s created
widespread enthusiasm for 401(k) accounts and a misguided popular
faith in private investment, recent studies are showing that the
retirement security of baby-boomers and the middle class is precarious.
Retirement wealth for the middle class actually
fallen in recent years, according to a recent study by New York
University economist Edward N. Wolff for the Washington-based
Economic Policy Institute.
The study projects that 40 percent of households
headed by persons between the ages of 47 and 64 will not be able
to replace even half of their pre-retirement income when they
stop working. Nearly 20 percent of the workers in that age group
will have retirement incomes below the poverty line, according
to the study.
A disturbing new book, The Great 401(k) Hoax by
William Wolman and Anne Colamosca, shows that 50 percent of Americans
have less than $14,000 in their 401(k) accounts-clearly much too
little to retire on.
This situation will only get worse if the financial
managers of Wall Street get their hands on the Social Security
"The threat of privatization is still out there,"
Ms. Ginsburg said. "We have to continue to dispel the myth
that Social Security faces a crisis. And we have to make it clear
to the public that privatization means loss of benefits and tell
politicians that they will be held accountable if they vote to
set up individual savings accounts."
Gregory Heires is senior associate editor of NYC-based Public
Employee Press, the official publication of DC 37, AFSCME.
ON SOCIAL SECURITY:
A Crucial Benefit for Minorities
By Helen Lachs Ginsburg and Gertrude
Before Social Security was enacted in
1935, organized business and Republicans bitterly opposed it.
But due to fear of reprisals at the polls, most Republicans opposition
collapsed. Since then, conservatives have continued to criticize
Social Security. One criticism of Social Security is that it is
unfair to African-Americans and other minorities, which implies
that it is not an important program for them. Nothing could be
further from the truth.
Greater Reliance on Social Security
Proportionately fewer elderly minorities than whites receive
any pension income. Minorities, with average earnings considerably
less than those of whites, are also less likely to have income
from assets such as savings, stocks, and bonds. Thus, Social Security
is a much more important source of their retirement income. In
1996, almost half of minorities collecting Social Security relied
on it for more than half of their income, compared to one in three
whites. And one in three African-American and Hispanic beneficiaries
but only one in six whites relied on Social Security for all of
Blacks typically earn less and are more likely to be unemployed
than whites. This reduces their Social Security benefits, which
are related to earnings and years of employment. Since they also
have less income from pensions and assets, poverty is more widespread
among black than white elderly persons. In the late 1990s, nearly
one in four African-Americans 65 and older was poor (using the
official poverty standard) compared to less than one in ten whites.
Without Social Security, around 60 percent of elderly African-Americans
and Latinos would have been poor, compared to slightly less than
half of whites.
Social Security pays low-wage workers a higher proportion of
their past earnings than average or high-wage workers. Thus minorities,
with lower average earnings, benefit from this progressive benefit
formula even as they end up with smaller average monthly payments
than whites. The discrepancy is due to inequality in the labor
market, which Social Security only partially offsets. While minorities
benefit from the progressive benefit formula, the Social Security
payroll tax is regressive because it is currently capped at $84,900.
The result is that minorities are more likely to pay the Social
Security tax on all of their earnings. However, the tax could
be made more progressive by eliminating the income cap or in several
Important Surviror, Disability Benefits
Those who claim that Social Security does not benefit African-Americans
often point to their lower life expectancy than other demographic
groups. A smaller proportion reaches retirement age, and
those who do, on average, do not collect benefits as long as whites.
But poorer health during working years and more premature deaths
mean that disability and survivors' benefits are more important
to African Americans. And progressive benefits more than offset
the difference in longevity, so that the claim of some conservatives
that minority men get a negative return on their Social Security
taxes is wrong (The Actuary, Sept. 1998).
Disadvantaged minority groups depend more on disability benefits
than do whites because low- income workers have much higher rates
of disability. While about half of African-American and other
minority beneficiaries receive retirement benefits, compared to
nearly three out of four white beneficiaries, minority beneficiaries
are much more likely to get disability and survivors' benefits.
One out of four African-Americans but only one out of eight white
Social Security beneficiaries collects disability or survivors'
benefits. One out of four benefits awarded to surviving children
goes to African- Americans even though they are only 15 percent
of children under 18 years old.
Toward the Future
Privatizing and weakening Social Security's basic protection
in other ways will jeopardize the income that is so necessary
for minorities. As the Urban League's Maya Rockeymoor put it,
"...funding private retirement accounts by diverting money
away from the current system would increase retirement insecurity
and undermine the viability of the survivor and disability components
of the Social Security system-the very programs upon which African-Americans
and their children heavily rely." Full employment at decent
wages would improve Social Security benefits. It would raise the
earnings of low-wage workers and increase their future Social
Security benefits at the same time that it would add more money
to the Social Security Trust Funds. Other government policies-for
example, universal health care-can also reduce and then eliminate
racial gaps in life expectancy, disability, wages and unemployment.
In the meantime, it is important to raise the special minimum
benefits paid to lifetime, low-wage workers and to strengthen
Social Security in other ways that are especially important to
minority workers and their families. One important way is to roll
back the Social Security retirement age, which is gradually rising
to 67 by 2022.
Excerpted and adapted from Uncommon Sense
25, part of the National Jobs for All Coalition (NJFAC) Social
Security Packet. Helen Lachs Ginsburg, Professor Emerita of economics
at Brooklyn College, is on the NJFAC executive committee. Gertrude
Schaffner Goldberg, director of the doctoral program at the Adelphi
University School of Social Work, is NJFAC chair.
National Jobs for All Coalition is a project of the Council on
Public and International Affairs.