•  HOME 
  •  BOOKS 
  •  WWP 
  •  DONATE 
  • Loading

Follow workers.org on
Twitter Facebook iGoogle

Longest economic downturn in 70 years


Published Oct 7, 2009 6:21 PM

The grim numbers are in. In September, 263,000 more jobs were lost. Official unemployment edged closer to 10 percent, going from 9.7 to 9.8. This was larger than predicted by capitalist economists and is the result of 21 consecutive months of economic downturn, the longest streak in 70 years.

In addition, the percentage of jobs lost, compared to the total work force, is 5.8 percent, the largest since 1946, when military contractors laid off workers en masse after World War II.

But there is more. The official unemployment rate would have been higher than 10 percent—except that 571,000 workers dropped out of the work force and therefore were not counted among the unemployed. In fact, so many workers have stopped looking, after repeatedly finding no jobs, that today 615,000 fewer workers are counted as part of the work force, compared to a year ago.

(The statistics cited in this article come from the Economic Policy Institute’s Jobs Picture report of Oct. 2, 2009.)

The only way the work force can shrink while the population grows is if massive numbers of workers give up looking for work. In fact, more than one-third of the 15.1 million officially unemployed—some 5.4 million—have been out of work for more than six months. In September alone 450,000 jobless workers reached this category.

Since the downturn started in December 2007, 7.2 million jobs have been officially lost. But the Department of Labor will be revising this figure upward, to 8 million, due to a so-called “benchmark revision.” Apparently, the model used to calculate job losses during the 12 months ending in March missed 824,000 layoffs!

The government estimates that, because of population growth, 127,000 new jobs are needed each month just to keep up with the growth of the work force. So in reality this downturn, which is now 21 months old, has resulted in a deficit of 10.7 million jobs.

To get back to pre-recession levels, it would take the creation of an average of 573,000 jobs every month for the next two years. That’s the equivalent of opening 200 to 250 brand-new auto plants each month for two years, just to absorb the unemployed.

These figures do not take into account the 9.2 million workers on forced part-time or the 2.2 million officially classified as discouraged workers. Including them would bring the total official unemployment rate to 17 percent—or more than one-sixth of the entire work force.

These numbers are grim for the workers. But for the bosses, the numbers are cheery. Profits are up, especially bank profits, and according to testimony by former Federal Reserve System chair Alan Greenspan, the capitalist economy is on a path to grow 3 percent this quarter. (Interview on This Week with George Stephanopoulos, ABC-TV, Oct. 5)

Greenspan: ‘This is what a recovery looks like’

Greenspan, architect of the financial bubble and the ensuing housing bubble, declared in the same interview, “The job report was pretty awful, no matter how you looked at it. Indeed, not only did unemployment go up, but I was particularly concerned about the number of Americans who have been unemployed for six months or longer.

“My own suspicion is that we’re going to penetrate the 10-percent barrier and stay there for a while before we start down,” he said.

Greenspan then hastened to look on the bright side, with typical understated heartlessness. “It is true, the last couple of weeks, some of the numbers coming in have been a little bit soft,” he said. “But,” he added, “this is what a recovery looks like.”

Of course, Greenspan did not clarify that the “we” who are going to “penetrate the 10-percent barrier” are the proletariat, the wage slaves of capital. It is capital that is going to make more and more profit by forcing the workers to “penetrate” the barrier through laying them off.

Nor did Greenspan specify what he meant by the workers staying in a state of mass unemployment “for a while,” or when the “start down” will be.

This mealy-mouthed acknowledgment of the contradictions of the present capitalist crisis that Greenspan was forced to admit in front of a Sunday morning television audience actually tells a lot that the workers need to take to heart.

‘Horrendous amounts’ of productivity

The truth is that close to 30 million workers are unemployed and underemployed. They cannot be put back to work because capitalism has no jobs for them and will not be able to create anywhere near enough jobs.

The bosses have done everything in their power to find ways to intensify the exploitation of labor—that is, to increase productivity. Their goal is to get workers to produce more and more in less and less time for lower and lower wages.

In other words, each capitalist tries to get along with fewer and fewer workers by laying them off. Those workers who remain are speeded up through technology, or just plain driven harder. According to MarketWatch, reporting on the Stephanopoulos interview:

“Pointing to the fact that businesses laid off ‘a very substantial number of people’ when the financial markets collapsed last year, Greenspan said the country got productivity gains ‘of horrendous amounts,’ which cannot continue.”

Technology in the hands of the bosses spells long-term mass unemployment for millions and millions of workers.

The capitalist economy, even while growing at 3 percent, still shed 263,000 jobs in the month of September. And, more importantly, the bosses are not hiring.

That means the fortunes of the exploiting classes are looking up while the fortunes of the exploited sink further into the depths of unemployment, poverty, foreclosures and homelessness.

Mobilize for a real jobs program

The only way out in the short run is for the workers, the unemployed and employed alike, to demand a real jobs program. The workers’ movement as a whole, and especially the trade union movement, must demand that the trillions handed over to the banks be taken and used to make real jobs. These jobs must be given directly to workers—not to some capitalist who might hand out a few jobs, but only after taking the profits off the top and after all the government officials and politicians get their cut.

No “market mechanism,” no automatic process of capitalism, and no government gift to the bosses and bankers is going to turn the situation around. This is rooted in the nature of the capitalist profit system itself.

No one should be plunged into poverty because the breadwinner or breadwinners are unemployed. Every worker must be guaranteed an income on which to live a decent life—including affordable, quality health care through a single payer or by whatever means.

Jobs, income, housing and health care must become political demands of the working class. But those demands must be backed up by mass mobilization and militant struggle. This is the only language the bosses understand.

The reason Greenspan is “particularly concerned” with growing long-term unemployment, and the reason he came out for extending unemployment benefits in the midst of this crisis, is not out of any sympathy for the workers. He has spent his entire life trying to help the bosses and bankers fleece the workers.

He is worried about a rebellion of the workers and the oppressed against capitalism itself.

While an immediate struggle for jobs is the priority of the moment, in the long run workers need to fight to overturn capitalism altogether and its system of exploitation, which puts profits above the lives of the masses of people. The workers need to take back what they have built and develop a planned economic system—socialism—that does away with the profit motive and restructures the economy to satisfy human needs.

Fred Goldstein is author of “Low-Wage Capitalism,” a book that analyzes the effect of globalization on the working class.