Still no recovery in sight for workers
Published Jul 3, 2009 10:41 PM
Bob Herbert, who is an op-ed columnist for the New York Times and also an
African American, wrote in a recent piece: “There are now five unemployed
workers for every job opening in the United States. The ranks of the poor are
growing, welfare rolls are rising” and young male workers over a broad
front “are falling into an abyss of joblessness.”
Herbert goes on to show that official unemployment, now 9.4 percent, is heading
toward 10 percent at a good clip. He continues: “Economists are currently
spreading the word that the recession may end sometime this year, but the
unemployment rate will continue to climb. That’s not recovery.
That’s mumbo jumbo.”
For the working class, employed and unemployed, truer words were never
Herbert shows that in November 2007 the officially unemployed numbered 7
million. Now the figure is about 14 million. He cites a study by the Center for
Labor Market Studies at Northeastern University in Boston showing that, during
this period, so-called “underutilized workers” had increased from
more than 15 million to close to 30 million.
He points out that three quarters of the 6 million workers laid off in the last
year were given permanent layoffs—meaning their jobs were destroyed. And
he highlights the plight of young workers. Half of the 7 million job losses
since November 2007 were sustained by workers under 30.
Herbert, one of the few Black voices allowed any expression by the
rich-white-male-dominated New York Times, shows perplexed frustration:
“Why rampant joblessness is not viewed as a crisis and approached with a
sense of urgency and commitment the crisis warrants, is beyond me.”
To bosses, revival means profits
Of course, in a newspaper that is really one of the central organs of big
business, it is natural that there could be no truthful discussion of this
crisis. In the first place, the bosses regard this as a crisis of profits, of
lost business. Uppermost in their minds and the minds of the vast majority of
their economists and economic advisers is the revival of profits.
But in addition, this is a crisis of a new type. If there should be any sort of
“capitalist recovery,” it will be a recovery for the capitalists,
not the workers. This sort of recovery first showed itself after the 1991
downturn. It appeared again, even more strongly, after the 2000-2001 downturn
in which the high-tech bubble had burst. These were the first “jobless
Herbert points out that the Obama administration is talking about a recovery
this year—and yet, at the same time, the administration concedes that
unemployment may go up to 10 percent!
The big business economists, when asked about this, mumble about the
“lag” between the economic upturn and an upturn in employment. But,
after the 1991 downturn, it took 18 months to get back to pre-downturn levels.
After the 2001-2002 downturn, it took 27 months. During the present crisis, the
drop of 7 million jobs in the 19 months of this recession is the biggest
absolute decline and the largest percentage jump in the 68 years since the
Great Depression ended. (Real Unemployment Rate Hits a 68-Year High,
What is behind this? There are many factors, but the most important is that
this is the age of the scientific-technological revolution. The bosses are in a
race to make more profits and reduce their labor costs; they do this by
bringing in technology to replace workers. This shows itself in each
Each new round of technology puts workers’ skills into machines. This
lowers the workers’ skills required. Lower skills mean lower wages and
more competition among workers. And the workers have less buying power.
At the same time the development of technology raises the productivity of
labor. More goods and services are turned out in less time. With more
productive labor, more commodities to sell and less buying power in society, it
becomes more and more difficult for the capitalist system to start up the boom
part of the boom-and-bust cycle.
It also means that it is harder and harder to bring jobs back into the economy
after each bust is over.
With 30 million workers officially unemployed or underemployed—many of
them discouraged from even looking for jobs or forced into part-time
work— should there be an upturn in business (and that is not guaranteed
at all!) massive unemployment will still remain, along with low wages.
Capitalism operates by the boom-and-bust cycle. But those cycles are
changing—a lot less boom and a lot more bust, certainly as far as the
workers are concerned. The bosses have more and more been relying on
artificially created bubbles to revive the profit system. They increasingly
rely on paper profits and speculation. This shows the sickness of the
capitalist system, that it is in a stage of decline and decay.
Growth ‘based on bubbles’
This was expressed indirectly by one of the more renowned financial experts in
the academic establishment, Nouriel Roubini of New York University. Roubini
became a renowned figure after the present economic crisis broke out.
Prior to the crisis, in 2006, he challenged all the financial experts who said
the housing bubble was no problem and would not really spill over into the
economy. He predicted that the masses were overloaded with debt and that the
problem was far larger than just the housing bubble. He predicted that the
bubble would burst and be followed by a global economic crisis.
When he first put forward his prognosis at a conference of the International
Monetary Fund, he was labeled “Dr. Doom.” Now, since the crisis he
predicted in detail has materialized, he is one of the most celebrated
economists on the lecture circuit.
An interview with Roubini by James Fallows, called “Dr. Doom Has Some
Good News,” appeared in the April issue of the Atlantic Monthly. Toward
the end of the interview, Fallows asked him about the economic future.
Roubini observed that “We have a growth model that has been based on
bubbles. The only time we are growing is when there’s a big bubble. The
question is, can the U.S. grow in a non-bubble way?”
When Fallows turned the question back to him, “he answered by returning
to the damage caused by the boom-and-bust cycles and the need to find a
Capitalism has no “different path.” It has been following the
boom-and-bust cycle since it began. Now the repetition of that cycle requires
bigger and bigger bubbles which lead to bigger and bigger crises for the
The bigger the crisis, the more the bosses try to push it off on the workers.
Capital tries even harder to lower its labor costs as a means of restoring
profits, lowering wages and replacing workers with machines. This destroys
jobs, creating more poverty and more unemployment.
The working class needs a “different path,” all right. It needs a
path that leads out of capitalist exploitation and production, a path out of
this system where profits come before the rights and the very lives of the
workers and the oppressed.
The present crisis must be fought by organizing, by international working class
solidarity, by mass mobilization, by organizing the unemployed, by fighting to
stop layoffs, by occupying plants before they can be shut down, by demanding
the right to a good-paying job, by refusing to accept the capitalist scheme of
things and, above all, by putting the rights of workers before the rights of
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