Chicago Workers’ Collaborative is an Illinois non-profit organization that unites low-wage workers so we can receive the proper respect and treatment in exchange for our important labor. We educate about workplace rights, provide critical services to our members, and mobilize to gain full access to employment for all workers, especially immigrants and African Americans. The CWC presently is working on the following initiatives:
- Collaborating with the Illinois Department of Labor and the Illinois Attorney General’s office to improve enforcement of state labor laws.
- Growing the membership of our Chicago and Northwest Suburban Worker Service Centers by providing critical Assistance to our members.
- Aiding our worker members to locate the best legal assistance for employment-related issues.
- Working with law enforcement authorities in arresting the perpetrators and helping the victims of human traffiicking.
- Bringing together African-American and Latino workers to end the criminalization of our people, including Comprehensive Immigration Reform, so we may all work and participate in our community as equals.
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Compare to a chart of GDP recovery over the same period using the same nations.
Something is very, very wrong with the U.S.
Okun’s Law tells us that labour productivity, crudely measured as GDP/employment, and ignoring subtleties like hours worked and quality of labour, normally falls in a recession. Because the percentage fall in GDP will be two or three times as big as the percentage fall in employment. And it did fall in all the other countries. But in the US it didn’t fall at all. Labour productivity actually increased. GDP fell a little over 4%, peak to trough, and employment fell nearly 6%, so the GDP/employment ratio increased by over 1%.
The US is an even bigger puzzle if you think that business cycles are caused by productivity shocks. Sure, you could always argue that US firms and workers were expecting even bigger productivity growth, so when it actually came in at only 1%, that was a negative shock to productivity. But you would have to work hard to convince me that that’s plausible. And what were all the other countries expectations for productivity growth — chopped liver?
Why did US productivity increase during the recession? Why doesn’t your explanation also apply to the other 6 countries?
Why is the US an exception?
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“As you can see, the worse the recession, the more workers get discouraged. The longer our current recession drags on, the further off the reported unemployment rate will be versus the true number that includes discouraged workers. That also means, once the economy really starts getting better, the unemployment number will unexpectedly jump, because all those discouraged workers will be encouraged to give it another go.”
As a “discouraged worker” taking the summer off myself, I found this really interesting. Many of the people who recently graduated undergrad with me fall into this category, and the unemployment rate for our age group is catastrophically high— even worse when you consider that plenty of them are, like one person I know, using their fancy new engineering degrees from the University of Illinois to be lifeguards in their hometowns.
