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Fancy footwork on job numbers

Mayor Emanuel’s op-ed in last Sunday’s Washington Post, framed as advice to the Democratic Party, may or may not be an attempt to get out in front of the 2016 presidential field.

Emanuel touts his infrastructure trust, introduction of competition for early education dollars, longer school day, and reorganization of City Colleges as the model for a national program.

As proof of the wisdom of his policies,  he cites Chicago’s latest employment figures, with 42,500 more people employed this October over October 2011 – stronger growth than any other city, he proclaims.  It’s a neat statistic, though it’s also an example of Emanuel’s proclivity for announcing results before initiatives have even been implemented.

Employment numbers vary from month to month – over the last year, monthly numbers for Chicago have ranged from a gain of 17,537 (in August) to a loss of 9,744 (in July) — so picking your data point can make a big difference in bragging rights.  But it does seem that for a few months at least, job growth has been stronger in Chicago than elsewhere, though it’s not due to anything Emanuel has done.

One statistic doesn’t tell the whole story, of course. It also turns out that while employment increased from September to October, unemployment also increased, rising a half point to reach 10 percent, according to World Business Chicago. But hey, that’s progress: it’s down 0.3 percent from two years ago.

Maybe it’s a good sign that more people are looking for work.  But unfortunately, too many are not finding it.

And in Emanuel’s Chicago, they’re far more likely to be out of work if they’re African American.  As the health department’s new database on socioeconomic indicators reveals, the distribution of unemployment is wildly uneven in Chicago.

Five community areas including the Loop, Lakeview, and Lincoln Park had unemployment rates below 5 percent.  In nine community areas, all on the South and West Side, unemployment was over 20 percent.  In West Englewood, it was over 34 percent.

Those statistics are from 2006 to 2010, but there’s nothing to indicate the disparties have decreased — and as we’ll see, Emanuel’s policies have almost certainly intensified the effect.

Black Chicago left behind

Last year Megan Cottrell reported that African Americans in Chicago had the highest unemployment rate of any big-city racial or ethnic group in the nation.  And looking at workforce participation, she determined that fully one half of African-American males in Chicago are not working.

In fact, a new study shows that while African-American unemployment rates have fallen in most cities, they’ve continued to rise in Chicago. Chicago is also near the top in the gap between employment rates for blacks and whites.

As we’ve noted, St. Louis, Atlanta, Memphis, New York, Philadelphia, Baltimore, Houston, Dallas/Fort Worth, Washington and Richmond had black unemployment rates that were below the national average. Chicago’s is 6 points higher.

Emanuel is doing nothing to address this; indeed, his policies are making things worse.

He’s cutting middle-class city jobs by the hundreds, outsourcing city services to low-wage, no-benefit private providers and turning city contracts over to low-wage, nonunion contractors.   And the jobs he’s cutting belong overwhelming to people of color, particularly African Americans.

In the past year Emanuel has cut nearly 1,200 middle-class city jobs, according to Mick Dumke.  Setting aside the 400 positions eliminated in the police department, roughly half fell on majority-black areas of the South Side, with the rest mainly distributed among black and Hispanic areas of the West and Southwest Sides.

City services like homeless emergency transportation — and now the water department’s call center — are being outsourced to low-wage employers.  Recycling and public health services are also being outsourced.

Low-wage Chicago

More recently the city has been awarding contracts for janitorial services at O’Hare and city buildings to low-wage employers, including one contractor with a history of labor board violations.  At O’Hare, a contractor who paid $15.45 an hour and provided health and retirement benefits under a union contract is being replaced by a contractor offering $11.90 an hour, likely without benefits.

That doesn’t even save the city money, since the contracts are covered by airport fees paid by airlines.  It seems to purely reflect a preference for low-wage employers.

Meanwhile a majority of aldermen are supporting two measures, the Responsible Bidders Ordinance, which would protect workers when the city changes contractors, and the Stable Jobs, Stable Airports Ordinance, which would extend the city’s living wage requirement to airport contracts.

These would boost the city’s economy – and create jobs — by giving consumers more money to spend. They’d raise incomes for Chicago’s families, where nearly one in three children – and more than one in two black children – live in poverty, as Steve Bogira notes.

The mayor’s council allies have so far blocked consideration of either ordinance.

This takes place during a recovery where, as the Tribune has detailed, better-paying jobs are being replaced by low-wage jobs. Today one third of Chicago workers have low-wage jobs, not paid enough to cover basic necessities.  That’s up from 24 percent ten years ago.

The 42,500 jobs for which Emanuel falsely claims credit include a large number of retail and restaurant jobs; those are big sectors in Chicago, and they’re leading job growth nationally.  Those jobs generally pay little more than the minimum wage.

And where Emanuel has a chance to make a difference, he seems to opt for cutting workers’ wages every time.  The thrust of his approach is to turn Chicago from a union town to low-wage town.  Even his determination to replace neighborhood schools with charters has the effect of lowering living standards for teachers.

His economic development policy consists largely of press conferences where CEOs announce job shifts and praise the mayor – though as the Tribune has shown, about a fourth of the 20,000 jobs he claims to have shephered here are based on very uncertain projections, and of the rest, about half were transfers, not new openings for Chicagoans.

“The new jobs the mayor brags about are not being filled by people who live in the communities that need them most,” writes Ben Joravksy.  “Meanwhile, the mayor replaces union jobs that bring much-needed money to hard-hit communities with low-wage, part-tiime ones.”

Race to the bottom

“Emanuel does not seem to understand that one cannot achieve economic development by further immiserating working people and their communities, and by privatizing and cutting public services that working people depend on,” according to the Chicago Political Economy Group.

According to CPEG, Emanuel’s policies are basically the Republican “trickle down” approach.  “This has been the source of much of our current economic malaise.”

“A bottom-up, Harold Washington-type local economic development strategy would not lead to increasing African-American unemployment” – which they note is “much higher than New York’s and trending in the wrong direction over the last year” – and would be the best way to “achieve broad-based and sustainable prosperity.”

In his Washington Post piece, Emanuel proposes taking his austerity-and-privatization program national.  He repeats a common falacy of Clinton-era Rubinites, who think balancing the federal budget “lay the groundwork for a decade of prosperity,” as he puts it.  In fact, a boom fed by technology and stock bubbles was what brought the deficit down.  They’ve got it backwards.  Drawing the wrong lesson, they want to cut spending now – an approach mainstream economists recognize as a recipe for stagnation.

We need to restore progressive taxation, get the financial sector under control, and ramp up public-sector investments.  We need fair trade policies, not the NAFTA-style race-to-the-bottom deals Emanuel has pushed.  The mayor’s national program is a prescription for a “lost decade.”

Back home, with entrenched unemployment along with with a steady wave of low-wage jobs encouraged by city policies, and with job cuts targeting the areas that need jobs most desperately, that’s precisely what Emanuel seems determined to give Chicago.

 

A previous version of this post was revised, with a new headline.

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Category: elections, jobs

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