The Militant (logo)  

Vol. 76/No. 12      March 26, 2012

Joblessness is necessary
product of capitalist crisis
(lead article)
The big-business press has been cautiously applauding the U.S. Labor Department’s announcement of an uptick in hiring, which takes place three years into a period of persistently high joblessness—the longest such period since the Great Depression. While there’s no way to predict how long this short-term trend may last, it is not based on any reversal of the underlying capitalist crisis rooted in a worldwide slowdown in production and trade.

Bosses hired an additional 227,000 workers in February, on top of a similar number in January, while the official unemployment rate remained unchanged at 8.3 percent.

But there was no relief for the last hired, first fired. The official jobless rate for Blacks rose to 14.1 percent, almost twice that for Caucasians. The rate for Hispanics was 10.7 percent. For all workers under the age of 20, it’s nearly 24 percent.

Hourly wages for high school graduates able to get work have declined substantially over the past decade. For men aged 19 to 25, it’s down 10 percent to $11.68; for women it has dropped 9 percent to $9.92, according to an Economic Policy Institute report.

The big owners of capital worldwide are reacting to the crisis of their system by driving down wages, assaulting unions, and speeding up production as they compete to squeeze more profits out of the labor of working people. U.S. capitalists have made more progress in this offensive than their main rivals in Europe and elsewhere.

The conjunctural rise in hiring registers the competitive advantage the U.S. bosses have gained. While new orders generated by U.S. companies are rising, they have been dropping in many eurozone countries including Germany, Europe’s strongest economy.

The Labor Department’s U-6 alternative unemployment rate—which includes so-called discouraged workers and those forced to work part-time—stands at 14.9 percent.

The percentage of the population the government counts as part of the labor force ticked up to 63.9 percent in February, making it the second lowest in nearly 30 years.

When Barack Obama became president in 2009, the labor force participation rate was 65.7 percent. Its decline since then translates into 4.4 million people not working who are no longer counted in the unemployment figures.

Long-term joblessness remains at record heights. The average duration of unemployment is more than 40 weeks, double the previous record from the early 1980s, according to the Bureau of Labor Statistics.

The increased number of workers without jobs serves as a necessary reserve army of labor for the bosses. They use it to keep pressure on those employed and drive down the wages and social benefits of the entire working class.

Meanwhile, Congress cut the number of weeks that workers can collect federal jobless benefits. Currently the maximum is 99 weeks. By September, states with jobless rates below 6 percent will be reduced to 40 weeks of benefits, those around the national unemployment rate to 63 weeks, and those above 9 percent to 73 weeks. Initial cuts will begin in June.

Push to raise labor productivity

With the temporary increase in employment, the bosses’ concerns are about workers’ short-term rise in wages and slower growth in productivity rates. Hourly pay grew by a slight 1.9 percent last year, and “unit labor costs” rose at the fastest pace since late 2008. Workers still lost ground in real income, as inflation was a full percentage point higher than wage raises.

Overall labor productivity rose just 0.4 percent last year. In manufacturing, where 31,000 jobs were added in February, productivity increased 2.6 percent in 2011, compared to 6 percent the previous year. Bosses raise labor productivity—more goods produced with lower costs—by making us work harder, faster, under more unsafe job conditions, and with fewer workers.

“We’re getting a fuller picture of the U.S. labor markets: more jobs, slower productivity and a bigger cost squeeze,” stated a MarketWatch article, expressing concern over maintaining the bosses’ momentum against the working class and their competitive edge in the world. Without more “progress” in driving down labor costs, they warn, the uptick may be short-lived.
Related articles:
New Zealand port workers stand up to union busting
Bosses demand ‘flexible’ work schedule
Shoe workers in Myanmar win pay raise, union rights
On the Picket Line
Panel connects fight for safety, union, immigrants
‘Workers must fight as a class to defend their interests’
British Columbia students support teachers strike  
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