Rather than taking heart from the latest employment news, that the economy produced 36,000 new jobs in January, the nation’s leadership should be alarmed, writes Robert Reich, former labor secretary under President Bill Clinton. Such a figure is paltry compared to what the country needs to keep up with population growth (125,000) or to get back to where it was before the Great Recession (300,000 a month for five years), Reich says.

 

Weak employment growth is indicative of the situation today in the U.S., where there are two economies. “The first is in recovery,” Reich says. “The second remains in a continuous depression.”

 

Those in the first economy enjoy a life in New York and Washington, DC, “that’s living well off of global corporate profits. Corporations continue to make money by selling abroad from their foreign operations while cutting costs (especially labor) here at home. Wall Street is making money by taking the Fed’s free money and speculating with it. The richest 10 percent of Americans, holding 90 percent of all financial assets, are riding the wave,” he argues. Currently, corporations have $1 trillion in ready cash.

 

The second economy constitutes “most of the rest of America, and it’s still struggling with a mountain of debt, declining home prices, and job losses.”

 

If the American economy is to really get back on its feet again, the middle class must prosper, and that can only happen if it is gainfully employed. Without this, the recovery will collapse, and, Reich warns, “a major stock market ‘correction’ is a certainty.”

 -Noel Brinkerhoff

 

The Jobs Report, and America’s Two Economies (Robert Reich)