Students and Youth Hit Hard

One of the groups hit hard by the economic crisis is college students and youth. The crisis led to class cuts and tuition hikes at public colleges and universities across the country. While the pace of budget cuts and tuition increases slowed with the economic expansion, they still continue today. One example is the growing threat to Historically Black Colleges and Universities (HBCU), many of which are seeing dramatic and dangerous drops in enrollments because of cuts in federal student loan programs.

Double Whammy

Youth who do manage to graduate from college, which is taking longer and becoming more expensive than ever, face a double whammy. On one hand the economic crisis sped up the restructuring of the labor market. Over the last 30 years millions of manufacturing jobs were automated away, off-shored by multinational corporations, and/or workers’ wages and benefits were cut. Now, government is one of the last remaining sectors with decent paying jobs, benefits and union representation. However, this sector has been hit harder by the Great Recession of 2009 than any other recession since the 1930s. Hundreds of thousands of local and state jobs are being lost, while government workers face wage and pension cuts and loss of union protection. Republican politicians are taking away hard-earned bargaining rights in states like Wisconsin and Michigan.

Restructuring Youth: Low-wage, Part-time and Temporary

In addition to the loss of jobs that pay a living wage and benefits, more and more permanent, full-time jobs are being replaced by temporary and part-time jobs. Today about half of all recent college graduates are either unemployed or underemployed, with part-time or temporary jobs, many of which don’t even require a college degree.

Skyrocketing Student Debt

There is an explosion of student loan debt, which totals as much as $1.2 trillion. Student loan debt is now the largest form of consumer (non-mortgage) debt, about 40% of the total. Caught between rising tuition and the cost of living on one hand and stagnant grants and wages, college students and their families have been borrowing more and more to pay for college. This student debt is a growing burden on youth, especially those who were not able to graduate or find a full-time, permanent, decent paying job.

Boom then Bust, Repeat

The boom and bust cycle under capitalism is not an accident – it is part and parcel of a capitalist economy. Wages are pushed down to grow profits, and this limits workers ability to spend. Then the profits are reinvested in expanding production, thereby increasing the ability to produce more, but the workers cannot buy all that they produce, and a periodic crisis of overproduction, or what we call recessions occur.

Crisis upon Crisis

On top of this, the build up in debt and deregulation and expansion of the financial sector following the end of the post-World War II economic boom in the 1970s led to growing financial crisis in the U.S. From the Third World debt crisis and Savings and Loan crisis in the 1980s to the Asian Economic Crisis of the 1990s, and most recently to the financial crisis in 2008, these crises have grown and become a greater and greater threat to the economy as a whole.

People Over Profits

The government is turning away from stimulating the economy to policies of more and more austerity – higher taxes on working people and cuts to programs that serve the people. The spending cuts are really felt at the state and local levels, hurting education funding from Head Start through university level. With financial regulation blocked by the power of Wall Street, it is more and more clear that the government, along with both political parties, are bought and paid for by the rich. They offer no real hope for working people and college-aged youth. Only a socialist economy, one based on people’s needs and not profit, can offer an alternative of expanding access and affordability to higher education, while creating jobs that pay a living wage.

Masao Suzuki teaches economics at a community college in California and is a member of the Freedom Road Socialist Organization (FRSO).

#SanJoséCA #crisisOfCapitalism #recession #PublicSchools #economy #corporateProfits #tuitionHikes

San Francisco, CA – While millions of retired Americans are struggling to make ends meet and millions more working people who have been laid off don’t know how or if they can ever afford to retire, laid-off corporate executives are living in another world. Take General Electric Vice-Chairman John Krenicki, who is 50 years old and retiring at the end of 2012 because of GE’s restructuring plans. GE will be paying him $89,000 a month for the next ten years (about a million dollars a year, or $10 million total), after which he can receive GE’s executive pension. In addition, Krenicki is getting stock options and stock valued at almost $15 million, and a bonus of almost $3 million, for a total golden parachute worth almost $28 million. In exchange, Krenicki promised GE that he wouldn’t work for a competitor for three years.

While the right wing demonizes mothers and children who are struggling to make ends meet on $150 per month per person (the average benefit for Temporary Aid to Needy Family or TANF, widely known as welfare), corporate executives are literally being paid millions not to work.

But of course Krenicki is not even the worst offender. Take a look at Republican Presidential candidate Mitt Romney. Romney has released one year of tax returns which show that he has $100 million in an IRA (Individual Retirement Account). Now, how he was able to amass $100 million when the yearly limit is $5000 and Romney is 65 years old, we don’t know. We do know that three-quarters of working age adults don’t have an IRA at all and that the typical person with an IRA has only $25,000 in the account, or 1/40 of 1% of what Mitt Romney has.

In addition to his IRA, Romney has another $100 million (or more) in personal wealth and perhaps another $100 million in trust for his children. While his own retirement is more than secure (we would call it lavish), Romney is proposing to cut Social Security, either by limiting inflation protection, by raising the retirement age even more (it is already going up from age 65 to 67), or by replacing Social Security with individual investment accounts. Romney opposes raising the cap on Social Security taxes, which right now doesn’t tax any wages or salary above $110,100, and all investment income is not taxed either!

If you have had enough of the likes of John Krenicki and Mitt Romney getting more while the rest of us get less, join the protest at the Republican National Convention in Tampa, Florida August 27-30. For more information, go to marchonthernc.com.

#SanFranciscoCA #WallStreet #welfare #Capitalism #corporateProfits #RNC2012

San Francisco, CA – While millions of retired Americans are struggling to make ends meet and millions more working people who have been laid off don’t know how or if they can ever afford to retire, laid-off corporate executives are living in another world. Take General Electric Vice-Chairman John Krenicki, who is 50 years old and retiring at the end of 2012 because of GE’s restructuring plans. GE will be paying him $89,000 a month for the next ten years (about a million dollars a year, or $10 million total), after which he can receive GE’s executive pension. In addition, Krenicki is getting stock options and stock valued at almost $15 million, and a bonus of almost $3 million, for a total golden parachute worth almost $28 million. In exchange, Krenicki promised GE that he wouldn’t work for a competitor for three years.

While the right wing demonizes mothers and children who are struggling to make ends meet on $150 per month per person (the average benefit for Temporary Aid to Needy Family or TANF, widely known as welfare), corporate executives are literally being paid millions not to work.

But of course Krenicki is not even the worst offender. Take a look at Republican Presidential candidate Mitt Romney. Romney has released one year of tax returns which show that he has $100 million in an IRA (Individual Retirement Account). Now, how he was able to amass $100 million when the yearly limit is $5000 and Romney is 65 years old, we don’t know. We do know that three-quarters of working age adults don’t have an IRA at all and that the typical person with an IRA has only $25,000 in the account, or 1/40 of 1% of what Mitt Romney has.

In addition to his IRA, Romney has another $100 million (or more) in personal wealth and perhaps another $100 million in trust for his children. While his own retirement is more than secure (we would call it lavish), Romney is proposing to cut Social Security, either by limiting inflation protection, by raising the retirement age even more (it is already going up from age 65 to 67), or by replacing Social Security with individual investment accounts. Romney opposes raising the cap on Social Security taxes, which right now doesn’t tax any wages or salary above $110,100, and all investment income is not taxed either!

If you have had enough of the likes of John Krenicki and Mitt Romney getting more while the rest of us get less, join the protest at the Republican National Convention in Tampa, Florida August 27-30. For more information, go to marchonthernc.com.

#CapitalismAndEconomy #WallStreet #welfare #corporateProfits

At the same time, corporate profits after taxes soared to a record high in 2010. After tax corporate profits were more than $1.4 trillion dollars in 2010, up almost 20% from 2009. Corporations were able to produce more than before the recession began, while paying their employees less. Total business profits totaled almost $3.5 trillion, or about one-quarter of the entire economy.

The poverty rate would have been even higher except for a number of factors. The official poverty line is unrealistically low, set at only $17,568 for a family of three including two children. Millions of people, especially younger adults, ‘doubled-up’ by living with relatives. While the poverty rate for adults, 25 to 34 years old, staying with their parents was only 8.4% when counting their entire family income, but was 45.3% if only their income was counted.

The median income, where half of household earn more and half earn less, fell to $49,445 in 2010, a drop of 2.3% from the 2009 figure of $50,599. This is the lowest average income, adjusted for inflation, since 1996. Inequality among races increased, as the median for white households fell 1.3% from 2010 to 2009, as compared to a 3.2% drop for African Americans and 2.3% drop for Latinos. African American median household income fell to less than 59% that of a typical white household in 2010.

The report also said that a nearly a million more people went without health insurance for all of 2010 as compared to 2009, with the total rising to almost 50 million. There were also large inequalities in health insurance coverage, with more than 30% of Latinos lacking health insurance as compared to less than 12% of whites. This drop in health insurance coverage was mainly due to a fall in people getting health insurance from work, partly made up for by expanded government health insurance (Medicaid for low-income households, Medicare for seniors and disabled, and military health care), that covered an additional 1.8 million people in 2010 as compared to 2009.

The numbers of poor and people without any health insurance could expand dramatically if the federal government goes through with proposed cuts to Social Security and Medicare. The poverty rate for the elderly, who generally are not working, was 9.0% in 2010, as compared to a 13.7% rate for working age adults, 18 to 64 years old, because of Social Security. The percentage of elderly without health insurance was only 2.0%, as compared to almost 22% for working aged adults 18-64 years old, again because of Medicare. Privatization of Social Security and Medicare as proposed by the Republicans would increase poverty for seniors and cause the number of uninsured to soar.

#SanJoséCA #poverty #corporateProfits #CensusBureau #wealthDisparity