While Bush pushes for war
Layoffs spread in high-tech and banks
By Heather Cottin
Like an avalanche in slow motion, the U.S. economy continues
to slide, and workers are being buried in the rubble.
Bush's Labor Department reported that unemployment in
September remained unchanged at 5.6 percent. Even Wall Street
is skeptical about this figure, however, especially since it
comes just before an important midterm election.
Economic writers David Leonhardt and Daniel Altman of the
New York Times reflected this skepticism when they wrote on
Oct. 13 that "the nation continues to suffer through a broad
jobs slump."
"Few companies have hired significant numbers of new
employees," they say, "and the worrisome economic signs of the
last month have caused some to announce new layoffs, making
last year's recession feel to many as if it is still going
on."
Robert J. Barbera, the chief economist at ITG/Hoenig, a
technology and investment company, told the Times, "The job
market is moribund."
And while the government is saying that unemployment remains
steady, these reporters point out that "The number of people on
payrolls fell in September for the first time in five months,
help-wanted advertising has dropped significantly and the
number of unemployment-insurance claims, while volatile, has
generally risen."
Many of the cutbacks have been in high-technology companies
and financial institutions, leading to what these writers call
"unusually democratic" layoffs, meaning that better-paid white
men are being laid off at the same rate as women and people of
color.
But unemployment among African Americans is still almost
double that of whites--9.6 percent--and Latinos are at 7.4
percent. More women have become "discouraged workers" who just
can't find jobs.
And the number of people who have stopped seeking
jobs--since few can be had--is mounting, according to the
Bureau of Labor Statistics.
Telecommunications job cuts are leading all other layoffs.
Lucent Technologies, which had a workforce of 123,000 only two
years ago, has announced it will cut 10,000 more jobs, reducing
its payroll to 35,000 workers by the end of the year.
Agere, the nation's largest producer of semiconductors, is a
spinoff from Lucent. Agere announced in August that it planned
to cut its work force to 7,200 from 11,200 by the end of 2003,
close a number of factories and consolidate its U.S.
manufacturing. It has been hit hard by the overproduction of
fiber-optic cables that led to the bankruptcies of technology
giants Global Crossing and Tyco.
Agere has been a major employer of workers in Pennsylvania's
Lehigh Valley, a region that has not recuperated from the
closing of Bethlehem Steel's mills in the 1990s.
Big banks are also laying off thousands of workers. J.P.
Morgan Chase slashed hundreds of jobs of sales traders and
analysts on Oct. 14, the beginning of a planned reduction of
3,000 jobs at its branches around the globe. The Morgan bank
had already laid off about 8,000 people since its 2000 merger
with Chase Manhattan.
On the same day, the New York Post reported that Merrill
Lynch may dismiss more than 20 percent of its investment
bankers. The firm has already cut 13,600 jobs, or 20 percent of
its staff, since last year's second quarter.
Credit Suisse First Boston announced early in the month that
it planned to eliminate 1,500 jobs in October.
These layoffs of bankers, investment analysts and other
high-paid specialists will have a ripple effect throughout the
economy, especially impacting on service jobs like waiters, dry
cleaners, domestic workers and others.
Statistics don't show the social effect on people who are
sinking into poverty and insecurity.
While the corporate criminals who stole billions get golden
parachutes or an occasional slap on the wrist, workers are
plunged into uncertainty and crisis. Marcia Angell, editor of
the New England Journal of Medicine, notes that 1.5 million
people in the U.S. lost their health insurance in 2001. The
layoffs in 2002 will swell that number, even as Bush
orchestrates Medicare and Medicaid cutbacks for the elderly and
poor.
Meanwhile, both Democrats and Republicans are pushing for a
war in Iraq that it is estimated will cost as much as $200
billion. With a youth unemployment rate this summer at 12.4
percent--up two percentage points over last summer--young
people are feeling more pressure to join the armed forces in
lieu of finding decent jobs.
The economy is flat. Workers are fed up. And at the same
time, a major war of aggression is developing that is becoming
increasingly unpopular even before it starts. It is all a
prescription for a deepening struggle against the capitalist
ruling class, whose insatiable need for profits is endangering
the lives and welfare of the people.
Reprinted from the Oct. 24, 2002, issue of
Workers World newspaper
This article is copyrighted
under a Creative
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