If this is a recovery ...
Where are the jobs?
Published Aug 19, 2009 3:22 PM
Capitalist economists, experts and stock market gamblers cannot make up their
minds as to whether or not there is a “recovery.”
For workers who are losing their jobs, their homes, their health care, their
wages and are deeply in debt, there is no ambiguity. There is no recovery.
However, at the slightest hint of less-bad news—news that is not as bad
as the news from the period before—the well-paid experts are quick to
declare that a recovery is in sight.
For example, on July 31 the government announced that the economy had declined
by “only” 1 percent in the second quarter, compared to 6.4 percent
in the first quarter of 2009. On Aug. 6, a week later, it announced that
“only” 247,000 workers lost their jobs in July and that
unemployment declined—from 9.5 percent to 9.4 percent.
It turned out that, in addition, 422,000 workers had dropped out of the
workforce and were not being counted. So the unemployment rate would actually
have gone UP to 9.7 percent if the discouraged workers had been counted as part
of the workforce.
It certainly does not take much to encourage capitalist experts who are
desperately in search of optimism. After all, optimism makes stocks go up. So
they paid scant attention to this little “discrepancy.”
On Aug. 10, more good news. French and German capitalism had slight growth
after long periods of economic downturn. This was followed two days later by
the announcement that Japan had slight growth, too, after a long and drastic
Ben Bernanke, head of the Federal Reserve System, pronounced light at the end
of the tunnel: the recovery was on the horizon in the second half of the
Business was supposed to be picking up. The economists could almost taste the
False promise of ‘good news’
But then, on Aug. 13, came news that retail sales had fallen—even at
Wal-Mart, Kohl’s and other giant stores that sell to the workers. On Aug.
14, the highly regarded University of Michigan report on consumer confidence
showed a sharp drop; a rise had been expected. U.S. stock markets fell,
followed by a sharp drop in Asia and then a further decline back in the
Credit card defaults, foreclosures and layoffs are all on the rise. Close to 30
million workers are either unemployed or underemployed and the number keeps
rising. Personal bankruptcies are on the rise.
How can sales do anything else but drop? The masses have little to no money.
Whatever they have is being hoarded to pay off debts, get their children
through school, pay for medical care, or just hold on to basic survival.
This is why more than 100 banks have failed since the crisis began. This year
77 U.S. banks have gone under. Another 300 are on the watch list of the Federal
Deposit Insurance Corporation (FDIC). Five banks failed just in the week of
Aug. 10-14 alone.
Capitalism’s new and dangerous stage
This back-and-forth about recovery, no recovery, weak recovery, etc., goes on
in the face of an unabated increase in suffering, hardship and poverty among
the workers and oppressed.
Here is the contradiction.
Capitalism is traditionally not supposed to work this way. The way it is
supposed to work is this: When there is an economic crisis, there is a crisis
for the workers. When there is an economic recovery, there is a recovery for
the workers. A downturn brings bad times. A recovery brings better times.
But what happens if there is a business recovery and it is still a crisis for
the workers? Clearly capitalism is in a new and dangerous stage as far as the
workers are concerned.
Not one of these experts knows if there is going to be any sort of capitalist
recovery of business or if, instead, the whole economy is going to collapse
once the stimulus money runs out here and in Europe and Japan—or perhaps
But if they manage to engineer a recovery for the bosses and bankers by handing
them trillions of dollars in bailout funds taken from the workers, the real
long-term structural crisis of the system will become apparent—a growing
era of jobless recovery.
Mark Zandi, the chief economist at Moody’s Economy.com, put it this way:
“We’re going from recession to recovery, but at least early on,
it’s not going to feel like one.” (New York Times, Aug. 1) The
threat of double-digit unemployment looms and wages are declining despite the
pickup in the stock market and an uptick in corporate profits.
Jobless recovery a global problem
Workers need to pay close attention to the talk of “recovery.” It
clearly does not include them.
For example, reading the paragraphs buried in the announcements of revival in
Europe and Japan is enlightening. After trumpeting the “strong
rebound” of Europe in its headline, the New York Times of Aug. 13 reminds
its readers of the possibility that the recovery could stall.
“[U]nemployment is expected to rise sharply this year as government
programs that kept people on private payrolls throughout Europe begin to
expire. Already, the euro area’s unemployment rate stands at 9.4 percent,
its highest level in 10 years, and the anemic growth of the coming quarters
will not be enough to arrest the slide.”
The same type of optimistic headline followed by the real grim news appeared in
the Times of Aug. 16: “Still the outlook for Japan remains unclear, and
some analysts question whether the economy can sustain this recovery after the
stimulus measures at home and elsewhere run their course. Falling employment
and wages are also expected to weigh on consumer spending for some time.
Japan’s jobless rate hit a six-year high of 5.4 percent and wages showed
a record drop in June.”
“A self-sustaining recovery is still not in sight,” declared a
In other words, even if there is a recovery for the capitalists worldwide, for
the workers there will still be a crisis of unemployment and declining wages.
And that crisis will keep the capitalist system from reviving as it used
Increase in rate of exploitation deepens crisis
A very important figure that was published but not well publicized on Aug. 11
showed a surge in the productivity of labor in the midst of the crisis. Reuters
put things quite bluntly in announcing a jump of 6.4 percent in the hourly
output per worker (annual rate).
“U.S. output per worker rose at its fastest pace in six years during the
second quarter as businesses wrung more from shrinking staff in a sign that
recovery from recession will be slow and unlikely to create a surge in
Thus, the bosses have used the crisis to shed workers on a permanent basis
through the use of technology, reorganization, speedup or other means. What
this really means is that the capitalists have increased the rate of
exploitation of the workers.
Workers’ hours plunged 7.6 percent, but production fell only 1.7 percent.
Thus the workers produced more in less time. This is what has caused a rise in
corporate profits, despite a declining economy.
The struggle of each capitalist to squeeze more and more out of the workers
means the bosses will not have to rehire many of the tens of millions of
workers out of a job or underemployed, even during a recovery.
It also means that if there is a recovery—and that is not guaranteed at
all—it will be weak, short-lived and will come at the expense of the
workers, who will be left to compete for fewer and fewer jobs.
Capitalism has no automatic revival for the workers. The only way to revive the
fortunes of the workers and the communities is to open up a massive struggle
for jobs, for income, for social services, health care, housing, food and all
the needs of life.
The bosses and bankers have made us pay for this crisis with trillions of
dollars in bailouts while we are thrown out of our jobs and homes.
It is time that workers organize to push back. It is time to declare that a job
is a right; housing is a right; health care is a right; education is a right.
And it is time to mobilize unions, the communities and all mass organizations
in a united struggle to turn things around.
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