Marxist truth about the capitalist ‘recovery’

Millions jobless as low wages spread

Published Apr 11, 2011 9:31 PM

The big-business pundits and politicians applaud every insignificant sign of economic recovery. Nevertheless, profound contradictions are built into the profit system — the so-called “free market” system. They are bound to create long-term mass unemployment and low wages on an ever-expanding scale.

Those profound contradictions will eventually lead to another major crisis.

Karl Marx discovered and explained the general law of capitalist accumulation. It is impossible to truly understand the jobless recovery without taking that into account. It is simply this: As capital grows, it becomes ever larger and more and more productive. Each capitalist enterprise needs fewer and fewer workers but larger and larger capital investments to create more and more goods and services (commodities).

As this process spreads throughout the capitalist economy, the bosses as a class have relatively less and less need for labor. The result is what Marx called the growing reserve army of unemployed.

Furthermore, capital becomes more and more productive as it creates enormous speed-up and intensified exploitation of workers through the use of increasingly modernized machinery — in our era, high technology and software. This lowers wages by making workers’ skills obsolete and allows the bosses to keep wages down.

These forces of capitalist accumulation can only be combated by the creation of unions and by the organized resistance of the working class and the oppressed on a society-wide level.

Worry behind the latest jobs report

The latest jobs report only emphasizes this process. The pathetic public cheers by Democratic Party politicians and the business media over 216,000 jobs said to have been created in March have been accompanied by worried whispers about the true nature of the economic situation.

According to official statistics, there are still 13.5 million unemployed. At this rate it would take until 2018 just to get back to 5 percent unemployment. However, 24.5 million workers are unemployed, on forced part-time work or have dropped out of the workforce. And these are official government statistics.

These numbers do not include millions more who are not counted at all for a variety of reasons — including those who have stopped looking for work for more than a year. According to the Bureau of Labor Statistics, the workforce is now actually smaller than it was last year by half a million workers, yet the working-age population grew by 1.9 million in the last year.

Black workers, especially men and teenagers, as well as Latino/a workers, have actually gone backwards as far as participation in the workforce is concerned. If these workers were counted, according to Heidi Shierholz of the Economic Policy Institute, the official unemployment rate would be 9.8 percent right now instead of the 8.8 percent stated in the Bureau of Labor Statistics report for March.

And there are two other important statistics that did not make headlines. There are five times as many workers looking for work as there are available jobs. And 7.2 million fewer jobs are available now than at the beginning of this Great Recession. This is in addition to the fact that 3.9 million new workers have come into the workforce since 2007, when the crisis began. So the labor market is really short 11.2 million jobs.

Low-wage capitalism spreading

With the assault on the unions and the vast reservoir of unemployed workers, the bosses are having a field day at lowering wages.

According to the Wall Street Journal, the right-wing mouthpiece of big business, more than half of those full-time workers who lost their jobs from 2007 to 2009 and were able to find work again had to take a cut in pay. Some 36 percent of them had to take cuts of 20 percent or more.

Here’s an example: “After seven years working in regional sales in Southern California for Diebold Inc., a manufacturer of ATMs and security systems, Virginia May says she was earning $30 an hour plus bonuses when she and 800 colleagues lost their jobs in early 2008. She took a seven-month stint with the Census Bureau last year, earning $25 an hour, but struggled to find the same wage anywhere else. Ms. May says she turned down 10 job offers out of 58 interviews. One of them was as an office manager, similar to the job she had at Diebold, paying $10 an hour.” (WSJ, Jan. 11)

This report, from the ultimate champion of capitalist exploitation, also pointed out that many of the low-wage jobs being created in the so-called “recovery” are in low-paying industries like restaurants, hotels, retail trade and health care.

Wider Opportunities for Women has studied the basics required for workers to stay alive. It shows that official government poverty levels are ridiculously low. WOW gave the example of Tara, a medical biller who makes $15 an hour, while her husband, who works in building maintenance, makes $11.50 an hour. They have three young sons.

The couple, who live in Jamaica, N.Y., in the borough of Queens, have to visit the River Fund Food Pantry every Saturday. “We tried to cut back on a lot of things,” they said, but they could not make ends meet. (New York Times, March 31)

Marxism on the worst jobless recovery since World War II

The big picture is that around 30 million workers are unemployed and underemployed, while tens of millions more are having their wages lowered or are entering or re-entering the workforce at poverty or near-poverty-level wages.

This is the result of the worst jobless recovery in the history of U.S. capitalism since the Great Depression.

According to the logic of Marx’s general law of capitalist accumulation, as capital grows it has relatively less need for labor. Thus it is clear that for capital to absorb the increasing reserve army of unemployed workers, the system must keep growing at a greater and greater rate with each business cycle.

But because of the continuous lowering of wages and the continuing increase in the productivity of labor, with more and more commodities being produced in less and less time, it is harder and harder for the capitalist economy to grow. In fact, the growth rate is steadily decreasing, not increasing.

Build a workers’ united front

The only way workers can escape mass unemployment under capitalism is for the bosses to expand production and exploitation at a rapid rate — i.e., for the system to undergo dynamic growth. Under the profit system, if you cannot sell your labor to a boss, you cannot live. But if the bosses need fewer and fewer workers and if their system is stalling out because of its own contradictions, the only way out for the workers is to launch a mass struggle against unemployment and for decent, good-paying jobs.

It is time to demand that a job is a right. The right to a job is a right to live and should not depend on whether some boss — some exploiter who gets rich off the labor of the workers — decides to hire. If the bosses don’t have jobs, then their paid politicians in Washington should be forced to create a government jobs program, along the lines of the Works Progress Administration of the 1930s.

The movement of unionized workers, which is struggling against a major assault right now, must expand its reach and its program to demand good jobs with living wages — for all. In that way it can enlist the unorganized, the low-wage workers and the unemployed and build a genuine workers’ united front.

Goldstein is the author of “Low Wage Capitalism.”