Politicians, pundits and the corporate media are strenuously patting themselves on the back for the new “official” April unemployment rate of 6.3 percent. That is the lowest rate since the Great Recession began six years ago. “The recovery is in full swing!” they all clamor.
A study released on May 3 by the progressive Economic Policy Institute states that the number of “missing” workers in April has climbed to 6.22 million. “Missing Workers — The Missing Part of the Unemployment Story” says that if that number is added to the “official” number of unemployed, then the actual unemployment rate would be 9.9 percent. That means that one out of every 10 workers is jobless.
The EPI study calculates the “Labor Force Participation Rate” in 2006, before the Great Recession began. At that time of a so-called “normal” capitalist economy, the unemployment rate was 5 percent of the workforce (about 7 million workers); presumably all workers were either employed or looking for work. So at that time, the LFPR was 100 percent.
When layoffs from the Great Recession spiked in 2009-2010, the “official” unemployment rate reached 10 percent But since job opportunities were and still are almost nonexistent, millions more workers have stopped actively looking for jobs. So they are not counted in the government’s unemployment rate.
EPI’s LFPR, which takes into account the growth in population as well as workers who reach retirement age, has steadily declined as millions of workers have given up looking for jobs. The “missing” workers are those who would actively look for work if there were job opportunities.
The EPI study points to millions of younger workers among this “missing” workforce, more than 1.8 million under the age of 25. Just 54.3 percent of young workers are either working or “actively” looking for work.
While the banks and corporations have fully recovered from the Great Recession and are now making money hand over fist, why has there been no big upsurge in jobs? Why are companies hoarding trillions of dollars overseas and not hiring back millions of the unemployed?
The crisis of overproduction and global low wages mean that companies can’t sell a sufficient number of goods at high enough prices to reap acceptable profits. So they don’t invest the cash on new ventures and hire more workers, but instead stockpile the money.
Fred Goldstein explains on page 31 of “Capitalism at a Dead End,” that “behind the financial crisis was a classic crisis of capitalist overproduction. The boom fueled by the housing bubble and peddling debt was over,” and he notes that the Washington Post observed in 2009 that “the ‘world was suddenly awash in almost everything: flat panel television screens, bulldozers, strip malls, Burberry stores.’”
Goldstein explains that “this overproduction was not in relation to what people needed. Millions of people needed homes and cars and many other basics of life. It was only overproduction because goods could not be sold at a profit.”
Corporations use technological advances — and speedups — to squeeze more and more productivity out of their workers. Meanwhile, they are laying off employees or shortening their hours, shrinking their workforces, and adding to the ranks of the unemployed.
Companies are making even bigger profits by superexploiting their employees. In the case of Meijer Inc., a Michigan-based 185-store chain, Goldstein says: “Workers on the cash register start their day by putting their fingers into a print-reading device. From that moment on they are timed for each customer that they ring up according to a pressurized time standard. Workers who fall below 95 percent of the standard either get downgraded or fired, according to a 2008 Wall Street Journal article.” (p. 35)
The inevitable conclusion of capital’s inherent tendency to increase the number of unemployed workers and put more corporate investment into productive, job-killing equipment, is this, says Goldstein: “Continue to develop productivity long enough, and efficiently enough, and the system will grind to a halt because of overproduction and mass unemployment. Mass rebellion of the working class will then come onto the agenda. Life under capitalism will not be able to go on and the prospect of social revolution will become real.” (p. 37)