350,000 Chicago students had to be placed in unusual care spaces after public school teachers went on strike for the first time in 25 years. Under a school financed contingency plan (costing $25 million) children were supervised in community centres, public facilities and churches whilst their parents worked.
The teachers union, led by President Karen Lewis, warned that Monday’s action could see an increase in gang related crime and also warned that some of those put in a care-providing position are unqualified for the task.
The strike related to pay and to educational reforms sanctioned by Obama’s administration.
Some have argued that the wage situation should not be one of the causes for complaint. The Chicago school district offered teachers a raise of 3 per cent for this year and promised further annual raises of 2 per cent for the three years after. School Board President David Vitale asserted, ‘This is not a small contribution we’re making at a time when our financial situation is very challenging’.
Indeed school districts across much of the U.S. are facing financial crisis. A budget deficit of $3 billion over the next three years has been forecast and there are real concerns regarding the weighty cost of pensions owed to retiring teachers.
This all adds to the economic strain already felt by the world’s largest economy.
Reports released today have disclosed that a cooling job market and flat-lining wages have prevented the level of consumer spending rising enough to boost the U.S. economy. The U.S. unemployment level has exceeded 8 per cent for 2 ½ years, the longest period of relatively high unemployment experienced by the nation since the 1940’s.
Some are arguing that the current situation is unlikely to improve and could even deteriorate as without income increases there will be no spending increases.
In August average hourly earnings underwent little change, employment opportunities remained restricted and fuel prices continued to rise. This resulted in the weakest quarter for spending in a year.
An economist with Princeton University, Alan Blinder, described the situation in the following manner: ‘Real wages are going nowhere – something between nowhere and down – depending on what occupation you are in. With a weak labour market – and we have had a very weak labour market for four years – there is not a lot of prospect for a turnaround in that.’
IHS Global Insight’s director of U.S. and global economics confirmed this view. Chris Christopher is quoted as saying: ‘All of the income measures are not very pleasant. Wage gains have been slow and flat. There is going to be a lot of discontent in the consumer sentiment numbers.’
All in all, it looks increasingly likely that this week’s two-day meeting between Federal Reserve policy makers will result in the announcement of further easing methods for the U.S.
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