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
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
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
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
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
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
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
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.
Articles copyright 1995-2012 Workers World.
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