The announcement by the U.S. government that unemployment dropped from 9.4 percent to 9 percent in January is pure statistical manipulation meant to deceive workers into thinking that things are getting better.
The government admits that, due to population growth, it takes 130,000 new jobs per month to accommodate those entering the labor force. In January only 32,000 new jobs were created. Yet unemployment supposedly dropped by 0.4 percent! The Obama administration hails this economic wizardry as a sign that things are moving forward.
It is an attempt to calm the waters when, in fact, workers, the labor movement, communities and youth should be mobilizing jobs marches in the streets aimed at city halls, state houses, Washington, and the bosses and bankers all across this country. Mass mobilization is urgently needed to combat the increasingly desperate unemployment crisis, which is concealed by statistical hogwash.
Bob Herbert, the well-known African-American columnist for the New York Times, has been writing about the effects of the crisis on the poor. While part of the media establishment, he has nevertheless raged against the lies and the hypocrisy of the government regarding the economy.
He wrote on Feb. 4: “What data zealots need to do is leave their hermetically sealed rooms and step outside, take a walk among the millions of Americans who are hurting to the bone. They should talk with families that are suffering, losing their homes, doubling up, checking into homeless shelters. ...
“Maybe the data zealots have stumbled on a solution,” continued Herbert. “They’ve created a model in which a radically insufficient number of jobs has resulted in a sharp decline in the official gauge of unemployment. If that trend can be sustained, we’ll eventually get the jobless rate down to zero. People will still be suffering, but full employment will have finally been achieved.”
4.9 million ‘missing workers’
Here are some of the facts omitted by the government in its press releases.
The unemployment rate is calculated on the basis of the number of unemployed compared to the total number of workers considered to be participating in the labor force. This is a very important point to keep in mind.
“Astonishingly, the labor force is three-quarters of a million workers smaller than it was before the recession started,” wrote Heidi Shierholz, a researcher for the Economic Policy Institute, a labor-oriented research institute. “It would have been expected to increase by roughly 4.1 million workers from December 2007 to January 2010 given the working-age population growth over this period.” (www.epi.org, Feb. 4)
Thus Shierholz concludes there are 4.9 million “missing workers” who either never entered the labor force or dropped out.
If just half of these were calculated as part of the labor force, the official unemployment rate would have gone up to 10.5 percent, according to Shierholz. If all were included, the rate would total 12 percent!
The “missing workers” are undoubtedly disproportionately Black and Latino/a, reflecting the disproportion in unemployment, which is officially 15.7 percent for African-American workers and similar for Latino/a workers. Unemployment is officially 45 percent for African-American teenagers.
No jobs for three-fourths of unemployed
A more fundamental measure of the crisis is that, even if all jobs available were filled tomorrow, there would not be enough jobs for more than three-quarters of the unemployed workers. The total number of job openings in December was 3.1 million. The official number of unemployed was 14.5 million. The ratio of unemployed workers to jobs was 4.7 to 1. (www.epi.org, Feb. 8)
Shierholz shows that in the 18 months of the very anemic recovery after the 2000-2001 recession, there were 62.6 million job openings. But in the first 18 months of the capitalist recovery from the 2007-2008 crisis, there were only 51.1 million job openings. Today job openings are 18 percent lower than eight years ago, despite a significant increase in population since 2002.
Shierholz concludes that government statistics show that 8.7 million jobs were lost from December 2007 to February 2010. Eleven months later, 1 million jobs had been created — meaning a net loss of 7.7 million. But in addition to that, 3.7 million additional jobs were needed for the working-age population that came into the work force. In other words, the capitalist economy needs 11.4 million more jobs just to get back to the 5 percent unemployment level before the crisis hit.
View from a worried billionaire
From the other side of the class divide, listen to Mortimer Zuckerman, billionaire real estate developer, publisher and editor of the right-wing magazine “U.S. News & World Report.” With $2.8 billion in wealth, Zuckerman is 147th on Forbes’ list of the 400 richest people in the U.S. In an article entitled “The Great Jobs Recession,” this ruling-class figure wrote:
“There is no life in our jobs market. The recession officially ended in June 2009, but the Great Jobs Recession continues apace. Not since the government began to measure the business cycle has a deep recession been marked by such high levels of unemployment and underemployment, and followed by such anemic job growth. More jobs were lost in the recession of 2007-09 than in the previous four recessions combined — and this time it is an agonizingly slow business to replace them.” (www.usnews.com, Feb. 11)
Zuckerman goes on: “While the headline unemployment figure is down, the number of ‘marginally attached’ increased by 300,000, and the decline in the rate from 9.4 to 9 percent is primarily because these workers have just dropped out of the market. But they haven’t dropped out of life in [the U.S.]”
Zuckerman also points out that of the 900,000 to 1 million jobs claimed to have been created in 2010, several hundred thousand were temporary government jobs, like those collecting data for the U.S. Census.
He ticks off a number of issues that he considers crucial. Among them:
• The number of full-time jobs is down by roughly 10 million (his number).
• The number of long-term unemployed, over 27 weeks, is the highest since records have been kept.
• One-third of new jobs in the last year have been from temporary help services which “reflect businesses trying to cut the benefit costs of full-time employment and using just-in-time hiring and part-time hiring to improve the bottom line.” (This from a billionaire who is fully aware of his own bottom line.)
• Real hourly pay dropped in the first four quarters since the recession officially ended, instead of the typical 2.5 percent rise during the first four quarters after the last 10 recessions.
• State and local governments, which account for 15 percent of all jobs, are in “downsizing mode.”
Toward the end of his piece, Zuckerman gets down to his true concerns.
“Longer-term trends have accelerated in ways depressing for the American worker. There is more outsourcing abroad, more automating, more conversion of full-time jobs to temps and contracts, and a stagnant median wage. Information technologies are advancing dramatically, doubling every couple of years, and increasingly are being employed to eliminate jobs of all types.
“This underscores the downside of advancing technologies, which together with globalization have been the primary forces depressing wages and diminishing opportunities, especially for those jobs that are fundamentally routine and repetitive in nature. The risk that semi-intelligent machines may destroy so many jobs that this trend could literally destabilize the whole society is one of the greatest challenges facing governments in all countries as they seek to find work for the millions of graduates coming into a labor market that has nothing for them.”
Let’s hear that again: “could literally destabilize the whole society.” This sounds very much like Zuckerman is afraid of an Egypt-style uprising if capitalism continues along its present course.
Jobless recovery & Marx’s law
of capitalist accumulation
These findings are completely in accord with Karl Marx’s analysis of capitalism. In his epoch-making work, “Capital,” Marx showed that as capital grows larger and larger, it becomes more and more productive and has relatively less need for labor. Consequently it creates an ever-growing reserve army of the unemployed. This is dealt with in the “General Law of Capitalist Accumulation” in Volume I. The law described by Marx is now manifesting itself with a vengeance.
The data theoretically and practically important to the working class is the fact that the capitalist recovery — that is, the recovery of business and profits for the capitalists — has reached the stage of economic expansion.
In the fourth quarter of 2010, the capitalist economy grew at a rate of 3.2 percent. This is an improvement over the previous quarter. But most importantly, the gross domestic product, or the sum of all goods and services produced, reached $13.38 trillion, a new record and higher than the peak in the last upturn. But jobs have not — repeat, not — come back.
Rather, the capitalist economy is growing and jobs are disappearing; unemployed workers are disappearing from the statistics; mass suffering is growing beneath the surface; and the true situation goes unreported. Capitalism has reached a point at which the job market is shrinking as capital grows. This creates a permanent and severe crisis for the masses and for the system itself.
The only way out of this crisis is for the working class and the oppressed in the U.S. to follow in the footsteps of the Egyptian masses who overthrew their dictator, Hosni Mubarak. A very common slogan during that rebellion was “Enough!”
Workers here have had enough unemployment, enough foreclosures and evictions, enough speed-up, loss of wages and benefits, layoffs, hunger and poverty. We have had enough racism, sexism, anti-LGBTQ bigotry, immigrant bashing, police brutality, imprisonment, war, occupation and intervention. Workers are sick and tired of seeing the bankers take in hundreds of billions of dollars while we just try to survive.
Fighting back against capitalism is the only thing left to do.