Last week the Federal Reserve reported that US factory output fell in March, and that new home starts had also declined. Manufacturing output fell 0.2 percent, the first decline in four months.
The Obama White House described the GDP report as "encouraging," while admitting the obvious: "additional growth is needed to replace the jobs lost in the deep recession that began at the end of 2007." An Obama spokesman aboard Air Force One confined himself to truisms, saying the US economy was "moving in the right direction" but that President Obama believed "there is more work to do."
The presumptive Republican challenger to Obama, former Massachusetts's governor Mitt Romney, blasted the administration's record on job creation, but offered no proposals except further tax handouts and deregulation for US corporations that have not created any net new jobs in more than a decade.
Neither of the two main parties of big business, the Democrats or the Republicans, proposes any program to create millions of new jobs, under conditions where there are five million more American workers officially unemployed than in 2008, and another five million workers who have left the labor force because they have given up on finding jobs.
According to a report earlier this month by Bloomberg News, 70 percent of all job gains in the past six months were in four sectors -- restaurants and hotels, health care, retail trade, and temporary employment -- where low wages prevail.
Corporate America has deliberately created a massive army of unemployed so as to further depress wage rates. In a newsletter to major investors, JPMorgan Chase chief investment officer Michael Cembalest wrote, "US labor compensation is now at a 50-year low relative to both company sales and US GDP."
While wages stagnate or decline outright, corporate profits soar. The net income of the companies in the Standard & Poor's 500 index has risen 23 percent since 2007, while their cash reserves have soared 49 percent. According to a report by the Wall Street Journal last week, these companies have increased the annual revenue generated by their employees from $378,000 per worker in 2007 to $420,000 per worker in 2011.
Needless to say, there has been no such increase in the wages and benefits paid to the workers.
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