The plight of the jobless in America is no joke
As the rift widens between the rich and the poor, US policymakers need to drop the political games and help those struggling to survive.
As the rift widens between the rich and the poor, US policymakers need to drop the political games and help those struggling to survive. TO GIVE you an indication of how deeply the jobs crisis is affecting Americans, Hallmark has just released a new range of sympathy cards for workers who have been laid off. Some take a light-hearted approach: "Don't think of it as losing your job," one card reads. "Think of it as a time between stupid bosses." Others are more heartfelt: "It's hard to know what to say at a sensitive time like this," another card says. "How about, 'I'm buying'?"The fact that Hallmark believes that people will spend $US5.99 on a card for their unemployed friends, or that those who have been retrenched would feel comforted by knowing that their friends have $US5.99 to spend on a card, is telling. It highlights the growing divide between rich and poor in the US and the disappearance of the middle class.Economists are calling it the hourglass economy. High-end retailers like Ralph Lauren, Tiffany & Co and Estee Lauder have grown net sales quarter-on-quarter by 33 per cent, 30 per cent and 13 per cent respectively. At the other end of the spectrum, bargain stores such as Costco and Dollar Tree have lifted their net sales quarter-on-quarter by 16 per cent and 12 per cent respectively. However, the stores that typically target middle America are struggling. Target could only manage a 5 per cent boost to its quarter-on-quarter sales, while Gap mustered a despondent 2 per cent rise in net sales. Moody's says the top 5 per cent of earners in the US account for 37 per cent of the spending, up from 25 per cent two decades ago.While that might boost the fortunes of Tiffany and Chanel, the spending is not spread across enough of the population to prop up the economy.A Time magazine poll released this week shows us why middle America isn't spending and it comes down to one thing job security. Since 2008, 77 per cent of those surveyed are now more concerned about outsourcing of jobs to other countries, while 54 per cent are worried about being able to find a new job if they lose theirs. Americans are really feeling the pinch. About 40 per cent say they have used retirement savings to pay bills, 29 per cent have opted to borrow from family or friends to pay those bills and 13 per cent say they have gone hungry because they could not afford food. Furthermore, 7 per cent have lost their home because they could not pay their mortgage and 34 per cent say they have been unemployed against their choosing. Almost two-thirds say would happily take a pay cut if it meant they could keep their job.It does not help instil confidence in Americans when they hear US Federal Reserve chairman Ben Bernanke this week tell a Congressional panel that the economic recovery "is close to faltering". Where was this so-called recovery? they might well ask. Bernanke says the Fed has done as much as it can for the moment to give people access to cheap money and he is right. The problem isn't the cost of finance, it is demand.You can pull all the economic levers you want to make finance cheap and encourage people to spend but if you don't offer job security and actually create jobs then people aren't going to spend.That is why it is crucial that Congress stops the politicking and passes President Barack Obama's $US447 billion ($A466.8 billion) jobs bill.If the Republicans block Obama's American Jobs Act on the grounds that it includes higher taxes on the wealthy then, as the President pointed out on Tuesday, everyone's taxes will rise. That is because the payroll tax cut that was agreed to last year will expire. The bill is designed to help galvanise middle America. Those tax cuts would be extended for the middle class but eliminated for those earning more than $US200,000 a year and couples on more than $US250,000 a year.Obama has spent the week in what would be considered enemy territory, selling his jobs bill in Governor Rick Perry's home state of Texas. By all reports he has been met with a favourable reception.That is supported by an ABC/Washington Post poll released yesterday, which shows 49 per cent of the country trust Obama to handle job creation compared to 34 per cent who believe Republicans would do a better job. A month ago, before the jobs bill was released, that figure was 40-40. The country could not be sending a stronger message for policymakers to get on with the job. It behoves them to listen.The poll also showed the approval rating of Congress had dropped to its lowest level since the mid-1970s, and that 8 out of 10 are dissatisfied with the way the country's political system is bumbling along. If Republicans think the obstructionist tactics are evoking a groundswell for change then they have misread the tea leaves the poll shows that more people blame the Republicans in Washington for the situation than they do the President.Obama is showing an understanding that he must make more trips to states that he may have no chance of winning at next year's election but whose voters need to know that the hope he spoke of last time is more than just a clever catchphrase.The President has also taken to Twitter to sell his jobs package. His "Tweet for Jobs" campaign helps you find House Republicans based on your location and offers you one of three tweets to send them with the hash tag #passthebill.Obama knows he needs to show he is creating jobs if America is to give him a second term in the White House. Otherwise he is likely to be the largest recipient of Hallmark's latest marketing venture.EMAIL: email@example.comTWITTER: mathewmurphy81