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A socialist newsweekly published in the interests of working people
Vol. 77/No. 41      November 18, 2013


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Bosses make workers pay
for capitalist economic crisis
(lead article)  

Lacking any solution to the worldwide slowdown of capitalist production and trade, U.S. bosses are pressing to squeeze more work from fewer workers and driving down real wages in an effort to shore up the profits they extract from productive labor. And without incentive for the bosses to hire, more and more working people are without employment, increasing competition among workers and providing an added lever in the drive against our living standards.

As they confront the consequences of the economic contraction, the rulers have been debating how far and fast to cut government expenses — starting with those things that affect working people. For example, starting in November, workers with the lowest wages were also hit with a 7 percent across the board cut in food stamps, which helps put food on the table for some 48 million people.

Some bourgeois economic commentators insist that something should be done to spur economic growth. An Oct. 14 Financial Times article by former Treasury Secretary Lawrence Summers calls for “focusing on growth,” arguing against what he sees as too much emphasis on cutting government expenses in response to the economic contraction. Aside from the fact it includes no proposal that could actually “spur growth,” the striking thing is that it makes not one mention of jobs.

Over the course of the nearly four-and-a-half years of so-called economic recovery since the 2008-2009 recession, huge numbers of workers have been jobless for record lengths of time, with more and more being pushed out of the workforce altogether.

According to the Bureau of Labor Statistics, 90.6 million men and women over the age of 16 are not working — an all-time high. This figure has risen by nearly 10 million over the past five years, affecting workers of all ages.

According to the Federal Reserve of San Francisco, 19.5 percent of the workforce is part time in 2013, “a historically high proportion,” notes the Wall Street Journal.

Bosses are pressing against wages, often through lockouts, union busting, the imposition of multitier contracts, firing of employees and hiring of “temporary” contract workers at lower wages. The owners also rely on the more subtle method of driving down real wages through inflation, often with the use of longer and longer contracts with wage freezes.

Caterpillar bludgeoned the union at its mining equipment assembly plant in Milwaukee in June to approve a revised contract that imposes a six-year hourly wage freeze. The company also announced it would hire temporary workers to fill job openings through attrition at lower pay and fewer benefits.

While the monetary policies of the U.S. Federal Reserve can have no effect on economic growth or job creation — the ostensible purpose behind the massive money-printing “easing” scheme it has been carrying out for the last five years — it has stoked inflation.

“The Fed, in a break from its historic focus on suppressing inflation, has tried since the financial crisis to keep prices rising about 2 percent a year,” wrote the New York Times Oct. 27.

“Executives at Walmart, Rent-A-Center and Sparta Stores, a Michigan grocery chain have … bemoaned the lack of inflation in recent months,” the Times article noted. The motivation for the capitalists is higher profits in the short term as companies raise prices to match inflation while real wages sink.

The consequences of inflation are particularly harsh for those on fixed incomes like Social Security or pensions.

After nearly five years, industrial production has not reached the output level it was at prior to the 2008-2009 recession — when it dropped 19 percent. It’s now at 96 percent of its 2007 average, according to the Federal Reserve.

But this same amount of work is being done with 2 million fewer workers, as bosses impose faster line speeds amidst deteriorating safety conditions. This process began prior to the last recession. The number of manufacturing workers has declined from 17.3 million in 2000 to under 12 million today, according to the Heritage Foundation.

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