May Day 2009: Immigrants, Jobs, and Politics in a Time of Economic Crisis; Haitians

We had two May Day demonstrations in New York City this year, one sponsored by unions and workers’ centers, the other dominated by the Left, both called by immigrants rights groups. The turn-out was largely Latino and heavily students. Many national and ethnic groups announced themselves with banners, and there were contingents of the unemployed and homeless.

Many signs and chants at both demonstrations, besides those calling for amnesty for the undocumented, were based on the view that government bail-out money should be used for education, housing, health care, etc. instead of going to Wall Street institutions. High school and college students asked for changes in the law to permit undocumented youth to obtain state aid for college, and asked for aid. One flyer by a Left organization consisted of a part telling students they need to demand more money for education, and another part of equal size denouncing the mayor on the sole grounds that he is very rich.

The prevailing view that real change can result from redistributing wealth hobbles the challenge we face in a time of economic crisis to have the inherent defects of capitalism understood and accompanied by a demand for its uprooting. We were sorry not to find clear openings to discuss this among the young and foreign born.

And what happened to the huge immigrants rights movement of three years ago, when millions turned out at May Day demonstrations across the country? In New York, Union Square Park had been so packed then that you could not move once you entered it; this year, several hundred people (in a heavy rain storm) filled only a fraction of the park. Meanwhile, life has gotten harder for immigrants, with many jailed and deported during these three years. Bush stepped up work-place raids and deportations, and many people left voluntarily due to a declining demand for cheap labor that cannot be filled by desperate citizens.

Did the movement die because people lost hope when no major changes in the law resulted from the mass demonstrations? Was it constrained by prevailing political organizations to rely on the Democrats to pass more favorable laws? Immigrants rights has recently become a demand of some unions, quite a change from the days when they feared the competition of foreigners and kept them out of unionized jobs. But the new concern for immigrants may be more the result of unions’ need to preserve themselves from shrinking into oblivion by getting new members, than of any ideological shift.

While the U.S. Left concentrates on defending Cuba and demanding the U.S. end close to 50 years of stupid and harmful sanctions and embargo, the same Left largely ignores the one million Haitian immigrants in our midst-including the people who drown during attempts to get here and those here who are threatened with deportation. Many are locked in prison while awaiting rulings on their refuge status (Cubans remain free during the process, and are presumed to be entitled to the status). 30,000 Haitians have final orders of deportation against them, although non-criminal deportations have halted while the U.S. government considers giving these 30,000 Temporary Protective Status (TPS), which would allow them to remain temporarily. That status is sometimes granted when a home country has suffered disasters that make it impossible for repatriated people to find work and that make much of the population dependent on their remittances from abroad. Haiti certainly qualifies-it had three hurricanes last summer and is suffering greatly from the world economic crisis, yet the U.S. has yet to grant it TPS status.

Is the worst over?

A couple of hours ago, the U.S. Bureau of Labor Statistics reported that the number of nonfarm payroll jobs fell in April by an estimated 539 thousand, and that the unemployment rate increased to an estimated 8.9%, from 8.5% in March.  So since employment peaked (and the recession officially began) in December 2007, payroll employment has fallen by 5.7 million.  Keeping in mind that the U.S. economy would need to have about 150 thousand additional jobs per month in order for employment to keep up with the growing population, or 150 thousand x 16 months = 2.4 million since December 2007, that makes for a shortfall of over 8 million jobs since the peak.

Now, this is being spun as some kind of good news-principally, it seems, by the stock sellers (brokers) and their employees, and by business media reporters and writers (who don’t know much, frankly).  Why?  Well, April’s job losses are the smallest since the 380 thousand drop in October.  Monthly job losses during the December-March period were all close to 700 thousand.   And-more important-the fall in job losses is consistent with the other economic data (especially the stock market indexes and stuff driven by them, like the Consumer Confidence Index), which are pointing toward a “moderation of the contraction.”

But … (1)  a rise from -700 thousand to -539 thousand isn’t all that big; (2) the government’s initial estimates have been consistently underestimating job losses, so there’s good reason to suspect that April’s figure will be revised a show a bigger decline in payroll employment as well; and (3) the numbers are “seasonally adjusted,” tweaked to remove the influence of seasonal factors, but I have my doubts.

Let’s look at the Case-Shiller Home Price Index.

We see home prices falling at an accelerating rate, then there’s a “moderation of the contraction”-less of a monthly decline, then the decline accelerates once more.  So first, “moderation of the contraction” is no guarantee of future performance, as they say, and second, look at when the “moderation of the contraction” comes-late winter through the spring.   If the seasonal adjustment to the jobless figures is less-than-complete, and if there’s a similar seasonal variation to them (e.g., much slower job creation after Christmas and until hiring of students begins in late spring and early summer), the moderating pace of job losses might well be just a temporary lull.

And (4): “moderation of the contraction” gets spun by the stock sellers and the biz media into claims or at least suggestions that the worst is over, i.e., that things have hit bottom and are about to turn around.  This is not-IS NOT-what it means.  It means that things are continuing to get worse, but they’re getting worse more slowly than they were getting worse before.  For instance, if your income was $50K, then it fell to $30K, then it fell again to $25K, the second fall is a “moderation of the contraction.”  The first fall from 50 to 30 is a fall of 40%, the second fall from 30 to 25 is a fall of 17%.

I like the way Ian Shepherdson, a forecaster/analyst, put it yesterday, commenting on the 491 thousand decline in ADP’s estimate of April’s job losses:  “”By any measure except the past few months, a 491,000 drop in private payrolls is disastrous, but at least it is less disastrous than before” (http://www.marketwatch.com/news/story/private-sector-jobs-fall-491000-april/story.aspx?guid={13600D45-3E89-4C21-821B-1CD9A2C860A3}&dist=msr_5).   So when you hear stuff about the “moderation of the contraction,” think “less disastrous than before.”

One Comment on “April Unemployment & Employment Stats: “less disastrous than before”"

1. 1Andrew Kliman said at 4:59 am on May 9th, 2009:I see that Nate Silver over at FiveThirtyEight.com has much the same reaction as I have about the “moderation of the contraction” stuff:http://www.fivethirtyeight.com/2009/05/horray-second-derivative-of.htmlI’m glad to be in such good company.