Economic Free-Fall Hits Workers Harder than Wall Street

Not that we like saying, "We told you so," on this, but we've been talking about the economic collapse and what it means for women and working families since April.

Workers' budgets are being squeezed - by employers, by higher energy prices, by rising food prices, and by health care costs. But it goes deeper than that. The real wage for the median male worker was lower in 2007 than in 1973, and the median income of working-age households fell $2,000 between 2000 and 2007, from about $58,500 to $56,500 (2007 dollars). Keep in mind that women's wages still average only 77% of men's, and you can see that it doesn't make for a pretty picture for female-headed households. Women of color face an even harder time, with wages that average 68% of men for African Americans and 59% for Latinas.

Heating costs are expected to rise another 40 percent this winter. Since 2000, spending on health insurance premiums grew even faster than spending on energy. American consumers were paying $370 billion more for insurance premiums in 2008 than in 2000, while spending for energy increased "only" $320 billion. Food prices increased 4% in 2007 and are expected to be up an additional 5% to 6% in 2008. Healthier foods are often more expensive than white bread and processed foods- prices of some healthy foods jumped 16% between 2004 and 2006- so rising food costs can lead to a rise in health problems down the line as families choose cheaper, less healthy options. By the way, John McCain's proposed health care plan would tax employer-paid health benefits, and cause at least 20 million Americans to lose coverage. (Thanks to Feministe for cluing us in to that.)

In July 1.6 million workers--over 40% of them women--had been jobless for at least 27 weeks. And no wonder the job market is getting tougher, there are now 2.6 unemployed workers for every job opening, up from 1.6 just 18 months ago. Congress authorized a 13-week extension of jobless benefits at the end of June, and another extension may be necessary after the current one expires in March if projections of a 6.9 percent unemployment rate by December 2009 are on target. But even this is not enough to help all unemployed workers.

Only 37% of unemployed workers receive unemployment benefits, down from 48% in 2001, according to the Government Accounting Office. Fewer than 15% of low-wage workers receive unemployment benefits, because they don't meet eligibility criteria. Hourly workers often don't qualify because their wages were too low to begin with. Moreover, 25 states require an unemployed worker to look for full-time work even if she meets the minimum earnings criteria, was working part-time and is seeking a comparable part-time position. But with one out of six workers being part-time, and one in four women, too many workers are left uncovered. Leaving a job voluntarily to take care of an ill or disabled family member or because child- or elder-care arrangements have collapsed also disqualifies applicants.

Meanwhile, the housing market and credit industry collapse that has hit so many families finally made it to Wall Street this week. With the bailouts of Lehman Brothers, Fannie Mae, Freddie Mac and AIG, the government has staved off a depression, but these tactics can't last forever. Goldman Sachs, Morgan Stanley, Wachovia, and Washington Mutual may all need financial assistance to stay viable. Where is the bailout plan for the families who lose their retirement savings when supposedly stable companies go under? The Housing and Economic Recovery Act of 2008 barely begins to address the needs of those hurt in the housing crisis, and now the economic future looks even bleaker.

Let's all be grateful that the conservative drive to privatize Social Security failed, because otherwise we'd be looking at leaving an even larger segment of the aging population in complete poverty for their final years. Luckily, Social Security is in good financial shape and will be for decades to come. As it stands now, future retirees will receive benefits that are more generous than those received by previous generations.

The presidential candidates must seriously address this crisis, and the very real threat of a second Great Depression.

We need to call on Congress this week to tell them they must act now! Use this toll-free number: 1-888-245-0215
Tell them: Please do not leave this month without passing an economic recovery package that helps low-income people avoid hardships, helps the jobless, maintains needed public services, and boosts the economy.
You'll be connected to the Capitol Switchboard - please ask to be connected to your Representative and your two Senators.
Look up your Representative's name.
Look up your Senators' names.

Background: The House leadership is expected to bring up a recovery bill soon. Discussions are going on now about what might be in the package. We need your help to press for aid to help low-income people pay for food, heat, and other basic needs, and to make sure that essential public services are maintained. Advocates have been urging more funds for food and home energy assistance, additional weeks of unemployment benefits, more aid to states for rising Medicaid costs and to keep collecting child support owed to millions of children, more funds for Head Start, and more jobs through infrastructure repair and jobs programs for youth. For explanation of these proposals, see Towards Shared Recovery.

Some of our other posts on the economy:
Bailout 101
Poverty Gets Worse, But Not Officially
The Struggle for Work/Life Balance
It's Still the Economy, Stupid!