Whether an upturn or an uptick
Economic news opens window for class struggle
By Leslie Feinberg
Workers and bosses alike are looking at the
latest economic figures, trying to determine if they are
favorable to their class interests. What the bosses care about
is profits, profits, profits. Workers have been trying to
defend their jobs and benefits, resisting demands for
downsizing and givebacks.
Now comes news from the Commerce Department that the Gross
Domestic Pro duct spiked an estimated 7.2 percent in the
quarter from July through September.
Is this a real upturn? Does it open a window of opportunity
for workers to demand more jobs, better wages and health care
instead of more concessions?
The Commerce Department reported on Oct. 31 that in the
third quarter consumer spending jumped 6.6 percent, a 15-year
high. Business spending grew by 11.1 percent--the fastest rate
since the first quarter of 2000. Exports were up 9.3 percent.
All these figures, of course, may be adjusted later on.
Whether this is a genuine upturn or a mere economic uptick,
the bosses will try to reap all the benefits. If the markets
are expanding, they'll try to produce more with the same number
of workers--or even with fewer. It will take a struggle by the
workers to turn that around.
So far, the number of jobs has not significantly expanded.
Even the big-business media, which report about how the
"red-hot" economy "sizzled" and "scorch ed" in the third
quarter, are quoting economists who call this a "jobless
recovery."
Jobless recovery: what an oxymoron.
Sony Corp. has just announced plans to eliminate 20,000 jobs
worldwide.
Officially, 9 million people in this country are out of work
and the unemployment rate is 6.1 percent, according to the
Bureau of Labor Statistics.
However, the Labor Department an nounced that first-time
claims for jobless benefits in the week ended Oct. 18 fell by
4,000 to 386,000. That can seem like good news. Capitalist
economists and forecasters say that when the number of new
applicants drops below 400,000, the overall tendency in
employment may be either flattening out or looking up.
It's not such good news, however, for the 386,000 newly
unemployed--roughly the population of Sacramento, Calif. And,
ironically, the official unemployment rate may now be on the
brink of an upswing, notes an Oct. 31 Wall Street Journal
editorial, because news of an economic recovery motivates those
who had given up looking for work to get back into the job
search. After having dropped off the radar screens, they're
then once again counted as unemployed.
Where will they find work?
Some 57,000 jobs were reportedly added to the economy in
September, the first gain recorded in nine months, but
manufacturing jobs continued to decline. Since January 2001,
the national economy has lost somewhere between 2.6 million and
more than 3 million jobs. Ohio lost nearly 67,000 non-farm jobs
in 2002 alone. Has this industrial state now turned the corner?
No, Ohio lost 22,000 more jobs from August to September--the
period of the much-touted upturn. (New York Times, Oct. 31)
Economist David Leonhardt reminded readers in the Oct. 30
New York Times business section that "In two other quarters
since 2001, the economy expanded at least 4 percent, only to
fall back into a slump that made companies reluctant to hire
new workers and helped create the worst loss of jobs in 20
years."
While many may eventually find work, they'll get less in
their paychecks unless there's a big workers' struggle. Three
years after being laid off, only one-third of those rehired
have reached or exceeded their lost wage. (Louis Uchitelle in
the New York Times, Nov. 2) And there's no figure for the
underemployed, those 3-million-plus part-timers who can't find
fulltime work.
Is the system working?
If you think the system is working, reads a popular bumper
sticker, ask someone who isn't.
There's no indication that this upturn will alleviate the
fierce capitalist competition that has been driving the
scientific-technological revolution of the last few decades.
Capital investment, desperate to turn a profit, continues to
turn to "labor-saving devices" to reduce production
costs--literally restructuring whole sectors of jobs out of
existence. Hemor rhaging layoffs are a global phenomenon.
The White House, trying to make hay while the sun shines and
with an eye to the coming election, claims that George W.
Bush's tax cuts jump-started the economy by spurring consumer
spending. The Democrats, naturally, are trying to rain on the
Republicans' parade, answering that this was a one-time spurt.
Many economists agree.
"This can't go on--in the long run, consumer spending can't
outpace the growth in consumer income," observed New York Times
columnist Paul Krugman on Nov. 4. He concurs with the
suggestion of Mor gan Stanley's chief economist, Stephen Roach,
that "much of last quarter's consumer splurge was 'borrowed'
from the future: consumers took advantage of low-interest
financing, cash from home finan cing and tax rebate checks to
accelerate purchases they would otherwise have made later. If
he's right, we'll see below-normal purchases and slower growth
in the months ahead."
And, Krugman concludes, unless jobs increase by more than
200,000 a month, consumer spending will eventually slide.
Consumer spending did slide 0.3 percent in September, the
last month of the quarter. This was the largest monthly drop in
a year. Disposable income dipped 1 percent in the same
period.
Wall Street economist Alan Abelson noted that "the tax
windfalls have pretty much been spent, the mortgage-refinancing
well looks all but plumb dry. So, gaze fondly on that 7
percent-plus gain, you're not apt to see its like any time
soon." (Barrons, Nov. 3)
Auto sales accounted for 1.2 percentage points of the
third-quarter gain. But, Abelson adds, "The 'miracle' that so
awed economists of inventories shrinking even while the economy
was sizzling has a rather mundane explanation, namely Detroit's
giving away cars to clear its showrooms. As this perfervid
effort waned in October, no accident that jalopy sales softened
noticeably." Sure enough, "U.S. auto sales stalled in October
after a strong third quarter," reported the Nov. 4 Wall Street
Journal.
Champagne bottles stay corked
What does the money class think of all this? "The economy
grew faster than it has in nearly 20 years, but investors shrug
ged," the Oct. 31 Wall Street Journal concluded.
The overall market response to the announcement of the third
quarter GDP rise was subdued, analysts said, because "it
reflected past economic performance, and investors were not
certain future growth would be as robust." (New York Times,
Oct. 31)
Some prominent Wall Street econom ists are "warning that the
economy may be headed for a disappointment," counsels the lead
article in the Nov. 3 Wall Street Journal Money & Investing
section. "And the doubters come from some of Wall Street's most
prestigious brokerage firms: Merrill Lynch, Morgan Stanley,
Goldman Sachs."
"To break the cycle" of recession, wrote Atlanta
Journal-Constitution staff analyst Michael E. Kanell on Nov. 2,
"companies must hire. And while many see improved sales,
companies hold back on hiring because they are awash in
uncertainty, said economist Campbell Harvey of Duke
University's Fuqua School of Business."
Monopoly: It's not a game
The same day that the third-quarter economic results were
released, the Agri culture Department reported, for the third
year in a row, an increase in the number of U.S. households
experiencing hunger and those worried about being able to
afford food. African American and Latino households and
families headed by single mothers are most likely to go
hungry.
How can that be? Supermarkets shelves are packed with
food.
People are hungry because they can't afford to shop. And
while small rebate checks and food kitchens can provide a
little relief, the root of the problem is an unplanned,
irrational capitalist economic system that is widening the
chasm bet ween wealth and poverty.
A stark example is life in the "capital of capital," home to
Wall Street: the average price of a Manhattan apartment is
hurtling towards the million-dollar mark while 18 of every 100
New York City residents live officially below the poverty
line.
When this profit-driven system is in its boom period, every
capitalist is a mara thon-runner trying to outrace the others
in the rivalry to expand capital investment and profits. But as
the competition grows more and more fierce, their success in
forcing the working class to produce more goods in less time on
a global scale leads to collapse.
The lion's share of the massive, congressionally approved
tax cuts have gone into the already deep pockets of the already
affluent. They exacerbated a budget deficit now as wide as the
Grand Canyon: a projected $374 billion this year alone.
The tax cuts for the rich have had a dom ino effect, sinking
state and muni cipal budgets and leading to large-scale layoffs
of state workers and widespread cuts in the services that make
modern life possible.
And like an insatiable beast, capitalist global expansion
for world markets and profits, which is underlying the
imperialist war drive, is eating up the social wealth. That
$87.5 billion both parties in Congress just appropriated for
the occupation of Iraq merely whets that appetite for empire.
The money the government spent on so-called defense rocketed 45
percent in the second quarter of this year--a windfall for the
military-industrial complex.
Bourgeois economists, even the skeptics, point to a growth
in business investment in the third quarter. If it were
sustained, it would represent an 11-percent annual rate. That's
the question: Will it continue to grow?
What is clear is that the monopoly stage of capitalism
continues to centralize and concentrate ownership and property
in fewer and fewer hands. Bank of America, the country's
third-largest bank, has just gobbled up FleetBoston
Financial--the seventh-largest in the U.S.--for $47 billion.
But Bank of America stock prices choked, beset by worries that
Fleet would be hard to swallow.
Anthem has announced its intention to buy WellPoint for
$16.4 billion, which would create the largest U.S. health-care
company. And life-insurance giant Prudential is reportedly
poised to close the deal to acquire Cigna Corp.'s retirement
and investment-products division for about $2 billion.
These and other mega-mergers create super monopolies that
will try to raise productivity by intensifying exploitation,
leading to lower wages, less benefits and continuing
layoffs.
As anyone who has ever played the board game Monopoly knows,
even if the banker doles out more paper money to players with
no property, they'll just lose it when they go around the board
again.
Class struggle is growing
But in real life, the monopoly stage of capitalism has also
brought together a mighty, multi-national workforce that has
muscle to flex. Struggle chapters in U.S. labor history point
the way: the mass marches of unemployed workers and sit-down
strikes in the 1930s; the demand for 40 hours pay for 30 hours
work in the 1950s and 1960s.
Today there are signs of growing workers' struggle. Grocery
workers are more than holding their own in a tenacious fight
against the supermarket chains. There's a courageous and
growing movement of immigrant workers--documented and
undocumented. The lowest-paid New York restaurant workers are
on strike against some of the most affluent employers in the
city.
Workers are the wellspring of all profits. The wealth now
being passed back and forth among investors in the stock market
comes originally from the labor of millions. A rising market
and news of higher profits--especially coming at a time of
greater suffering among the workers and oppressed, whether in a
soldier's uniform or a civilian job--can ignite both
expectations and anger.
If, together with the most oppressed communities, labor
closes its fist in the face of Corporate America and demands
"Show us the money!," jobs can be won, wages hiked and lost
benefits restored.
Reprinted from the Nov. 13, 2003, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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