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Washington admits there’s no recovery for workers

Published Apr 7, 2010 2:49 PM

Cheerleaders for capitalism are talking out of both sides of their mouths about the latest job numbers, which showed the creation of 162,000 jobs in March.

President Barack Obama hailed the news as signaling that the economy “is beginning to turn the corner,” but he followed this with the warning that “It will take time to achieve the strong and sustained job growth that we need.” (New York Times, April 3)

Likewise, Christine Romer, head of the White House Council of Economic Advisers, hailed the numbers but said there will be a “gradual labor market healing” and that “we still have a lot of headwinds.” (msnbc.com, April 2)

Larry Summers, director of the National Economic Council, said: “The trend has turned, but to get back to the surface, we’ve got a long way to go.” (washingtontimes.com, April 4) And Treasury Secretary Timothy Geithner said the administration is “very worried” about getting unemployment back to 5 percent. (Associated Press, April 1)

The double talk was captured in a New York Times headline of April 3 that read, “Signaling Jobs Recovery, Payrolls Surged in March.” This was followed by the exuberant opening sentence, “The clouds have parted.”

However, a few lines further down came the bad news: “The economy needs to add more than 100,000 jobs a month just to absorb new entrants into the labor market, let alone provide a livelihood for the 15 million Americans already looking for work. Without constant, robust growth, the unemployment rate won’t budge. Indeed, the Congressional Budget Office has projected that the rate will hover around 10 percent for the rest of the year.”

So the truth is that the working class has little to cheer about from the latest job numbers. The official unemployment rate is still 9.7 percent. Almost one third of the jobs created, amounting to 48,000, are temporary jobs working for the U.S. Census. These jobs last only six to eight weeks. Officially, there are still 15 million unemployed, 9.1 million doing forced part-time work and 2.3 million so-called “marginally attached” workers who have become so discouraged they’ve given up looking for work.

Added together, they are called “total unemployment” by the government. This number actually rose in March — from 16.8 percent to 16.9 percent. This makes for an official total of 26.4 million workers who need full-time jobs. The actual figure, according to an authoritative study by the Pew Research Center, is more than 30 million.

6.5 million long-term unemployed

The crisis of U.S. capitalism, as far as the workers are concerned, is getting more and more severe, big business spin masters notwithstanding. The long-term unemployed — workers out of a job for 27 weeks or more — rose 414,000 in March to 6.5 million, or 44 percent of the official number.

Black unemployment stands at 16.5 percent, with Black men at 19 percent; Latino/a joblessness is at 12.6 percent; and teenage unemployment is at 26 percent.

Right now almost six unemployed workers are looking for each available job. This dim picture for the workers is despite six months of expanded production and profits for the bosses and a steady rise in the stock market’s Dow Jones Industrial Average, which is now nearing 11,000. This is the “jobless recovery” in action.

An analysis released on April 2 of the unemployment statistics by Heidi Shierholz of the Economic Policy Institute shows in stark terms the crisis that the working class is facing in this capitalist economy.

“Since the start of the recession in December 2007,” wrote Shierholz, “the labor market has shed 8.2 million payroll jobs. This number, however, understates the size of the gap in the labor market by failing to take into account the fact that simply to keep up with population growth, the labor market should have added around 2.8 million jobs since December 2007. This means the labor market is now roughly 11 million jobs below what would restore the pre-recession unemployment rate (which was 5.0 percent in December 2007). To get us back to the lower unemployment rate that existed prior to the 2001 recession (4.3 percent in March 2001), the U.S. economy is now nearly 17 million jobs short.

“Furthermore, these calculations understate slack in the labor market by failing to take into account the decline in hours worked for those who have kept their jobs. At the start of the recession in December 2007, the length of the average workweek in the private sector was 34.7 hours. In March, it was 34.0 hours. This may at first seem like a small amount, but when multiplied across the labor market, the effect is nontrivial — the decline in the total number of hours worked in the private sector since the start of the recession that is due to reduced hours alone (i.e., not job loss) is equivalent to 2.2 million jobs.”

The bourgeois policy experts in Washington and in the media have read the same numbers. Thus, it is no surprise that they preach caution alongside every optimistic statement. They dare not raise expectations among the masses. In fact, according to the Washington Post of April 2, “The White House does not expect the rate to return to its healthy-economy level of 5 percent until at least 2017.”

These are the experts who predicted a maximum of 8 percent unemployment by 2010. They cannot see from one quarter to the next, let alone to 2017. But the point is that the government officials themselves are profoundly pessimistic about any genuine recovery for the working class.

Where can jobs come from?

All this speaks to the urgent necessity to organize a working-class campaign for an immediate, sweeping national jobs campaign. The idea is beginning to surface, even among liberals.

Bob Herbert, an African-American columnist for the New York Times, wrote on March 29: “Those who think some kind of robust recovery is hiding around the corner, just waiting to spring a pleasant surprise on us, are deluded.”

Herbert derided the Obama administration’s “jobs program” of $30 billion as “small-bore initiatives” and said that “some new variation of the Works Progress Administration and the Civilian Conservation Corps should be developed to put economically distressed young people to work. What is happening to young, out-of-work and poorly educated American kids — not just in the big cities, but increasingly in suburban and rural areas, as well — is tragic.”

Along these lines, the Bail Out the People Movement, the May 1st Coalition For Worker and Immigrant Rights, Moratorium Now! Coalition, the San Francisco Labor Council, the Million Worker March Movement, Rev. Tom Smith from Pittsburgh’s Monumental Baptist Church and many others are calling for a national jobs program that would include all workers who need a job to be carried out on a scope comparable to the WPA of the 1930s. Hiring them directly, the WPA put over 8 million workers to work. This demand will be publicized at a demonstration in Washington, D.C., on May 8.

In the midst of this crisis, the bosses are ruthlessly trying to take advantage of workers in every way. There are investigations in many states of corporations that use unpaid interns as free labor.

In 2008 the National Association of Colleges and Employers found that 83 percent of graduating students had held internships, up from 9 percent in 1992. This means hundreds of thousands of students hold internships each year; some experts estimate that one-fourth to one-half are unpaid. (New York Times, April 2)

Making money denying benefits

While workers are suffering, the bosses are using every trick to block them from getting unemployment insurance. This is to reduce employer costs because the more claims after a layoff, the higher the rates the bosses have to pay.

A billion-dollar company called Talx handles more than 30 percent of the nation’s requests for jobless benefits. Pledging to save employers money in part by contesting claims, Talx helps them decide which applications to resist and how to mount effective appeals. This has made Talx a boom business in a bust economy.

Among the companies Talx represents are Wal-Mart, Countrywide, Aetna, AT&T, Best Buy, FedEx, Home Depot, Marriott, McDonald’s and the United States Postal Service. (New York Times, April 3)

In addition, millions more homeowners are expected to lose their homes over the next several years. Workers are forced into homelessness, to double and triple up with their families, or to live in cars or tent cities.

The economic crisis is not making headlines. But for the working class, the communities, students and youth the crisis is spreading, not declining as the government and the apologists for the capitalist profit system would have it.

More people living in the U.S. filed for bankruptcy protection in March than during any month since the federal personal bankruptcy law was tightened in October 2005. A new report attributes this to high unemployment and the housing crash.

Federal courts reported more than 158,000 bankruptcy filings in March, or 6,900 a day, a rise of 35 percent from February, according to a report to be released April 9 by Automated Access to Court Electronic Records.

Capitalism must maximize profits at all costs. This is what drives the economic system. If the bosses have their way, there will be no recovery for the workers at all — only more pressure for those who work and a steady growth in the number of those who cannot get a job.

In a February speech, Federal Reserve Bank of San Francisco President Janet Yellen warned what the recovery will look like:

“The recession has forced businesses to reexamine just about everything they do with an eye toward restraining costs and boosting efficiency,” said Yellen. “Strapped by tight credit and plummeting sales, businesses have overhauled the way they manage supply chains, inventory, production practices and staffing.

“My business contacts describe this as a paradigm shift and they believe it’s permanent. This process of implementing new efficiency gains may have only begun and we may be in store for further efficiency improvements and high productivity growth for some time. If so, the rate of job creation will be frustratingly slow.” (Huffington Post, April 4)

The only way to stop job creation from being “frustratingly slow” or actually non-existent is for the working class to mobilize and fight for a national, government-provided jobs program at living wages and conditions. The demonstration May 8 in Washington, D.C., will make that demand.

Goldstein is the author of the book “Low-Wage Capitalism,” a Marxist analysis of globalization and its effects on the U.S. working class. He has also written numerous articles and spoken on the present economic crisis. For further information, visit www.lowwagecapitalism.com.