The United States hit its debt ceiling May 16 without much notice, since plans for “deficit reduction” were already filling the airwaves and producing thousands of articles. It will take until the middle of August before restrictions on spending start curtailing the operations of the U.S. government.
Between March 1962 and January 2010, Congress raised the debt limit 78 times (Congressional Research Service). Raising it is generally no big deal, but now the right wing in Congress is trying to extract major cuts in social services as a condition for letting the government continue to function.
A recent Gallup poll (May 5-8) indicates that the major concerns of working people in the U.S. are the state of the economy and jobs, with the deficit a very distant third.
While profits, especially for the big banks, and production of goods and services in the U.S. economy have rebounded since 2009 to pre-recession levels, for workers the Great Recession is not over.
Last year 1.5 million people declared bankruptcy, banks foreclosed on a million homes and sent out nearly 3 million foreclosure notices, 43 million people got food stamps and more than 20 million people were either unemployed or underemployed, according to the Department of Labor. And these figures are definitely on the low side.
Unemployment rates are politically highly charged and often manipulated to make the situation of working people seem better. Nevertheless, official long-term unemployment is nearly as severe now as it was in the 1930s. Some 2 million people have reached the maximum of 99 weeks they are eligible to collect unemployment insurance — though in some states like Florida, the maximum is shorter — and 5.8 million people have been out of work for more than 27 weeks. (Department of Labor, Bureau of Economic Research, April report)
Unemployment for youth, Black people and Latinos/as is much higher. Even the BER says the figure for youth is 25 percent; for African Americans overall it is 16 percent and for Latinos/as nearly 12 percent.
Given the huge number of unemployed and the competition for work, there has been a steep and lasting drop in wages for people who take jobs that don’t require the skills or education of their last job. (Wall Street Journal, Jan. 11) Even in fields demanding more than a bachelor’s degree, like the 1.3 million higher education faculty, the average faculty member’s purchasing power increased by only $70 from the academic year 2008-2009 to 2009-2010. In states where furloughs were enforced, salaries fell. Hawaii saw a 6.7 percent decline and Wisconsin a 2.5 percent decline. (National Education Association)
Last July an economic policy project at Yale released an “economic insecurity index” that defines economically insecure households as those whose available income fell by at least 25 percent, adjusted for inflation, from one year to the next. Jacob Hacker, the head of the project, said: “There is a clear long-term upward trend in the economic insecurity of American families. And while economic insecurity is substantially higher for less affluent and educated Americans than for other groups, it has risen across virtually all parts of American society.” (Daily Finance, July 22, 2010) Hacker’s project is also investigating to see if economic insecurity has contributed to the rise in suicides in the U.S. over the past few years.
Workers’ response to crisis
The push for “deficit reduction” due to the “fiscal crisis” is part of the political and ideological attack against public service workers. The major push back against this attack occurred in Wisconsin, where tens of thousands of workers came out against Gov. Scott Walker’s attacks on the bargaining rights of public service unions, as well as on the unions’ very existence.
The AFL-CIO leadership has responded to the Democratic Party’s refusal to actively defend working people and oppose this push for austerity, layoffs, tax cuts for the rich, and bailouts for the banks and big companies by threatening to withhold its support and contributions to Democratic candidates in the 2012 elections. It is likely that this threat will fade under their old habit of getting out the vote for the “lesser of two evils.”
Still, at the present moment the labor movement is taking some unusual stands and participating in movements alongside elements far to their left.
AFL-CIO President Richard Trumka went to Milwaukee on May Day to show unity with the struggle of immigrant workers and the struggle against union busting in Wisconsin. Speaking before 100,000 workers, he said that Gov. Scott Walker had “declared war on Wisconsin workers and, like you did before, you joined in a peaceful protest to say ‘No! No!’
“And again your voices have been heard across this nation, inspiring an uprising of America’s working people, standing together and saying ‘No’ to divide-and-conquer politics, ‘No’ to tearing working families down, rather than building us up, ‘No’ to corporate-backed politicians trying to turn us into a low-wage, no-rights workforce as payback to their CEO friends.
“This day — May Day — is our day to stand together shoulder to shoulder for immigrant and worker rights. Thank you for being here and showing Wisconsin and the world that we are one.”
The demands of May 1 in Milwaukee included immediate legalization of all immigrants; no Arizona racist copycat legislation in Wisconsin; keep in-state tuition for immigrant students; and no union busting in Wisconsin or anywhere in the U.S. (Workers World, May 5)
Two significant recent demonstrations in New York involved marches on Wall Street, the financial capital of the U.S. and the symbolic and real home for all the speculators, fat-cat investment bankers and hedge fund managers whose real estate swindles started the financial crisis.
The first march on March 24 was initiated by a broad progressive coalition called New Yorkers Against Budget Cuts, which included unions, student groups mainly from City University of New York campuses, immigrant groups, progressive and community organizations, and left-wing political parties.
It protested budget cuts that would cause some schools to close and tuitions to rise, and would cut social services drastically and bring thousands of layoffs to public sector workers. Its demands included: “Today’s the day the rich must pay!” and “Money for jobs and education, not for wars and occupation!”
Oliver Gray, associate director of AFSCME District Council 37, said at the rally that public workers will not allow Gov. Andrew Cuomo to blame them for the deficit. “How are we to blame,” he asked, “when the governor wants to cut the taxes of the richest people in New York and gives back to Wall Street investors $15 billion a year in stock transfer taxes?”
A later rally on May 12 was called by a broader coalition of trade unions, with the United Federation of Teachers AFT Local 2 being the most active, but student groups, housing groups, welfare rights, social services like ACT-UP, anti-war groups and groups focused on immigrant issues all took part. Its press release demanded, “Make big banks and millionaires pay!” and called on Mayor Michael Bloomberg to end taxpayer-financed giveaways to Wall Street and support more taxes on millionaires to mitigate his proposed budget cuts.
From Milwaukee to New York, the demands were similar and showed a growing resistance to the banks’ assaults on the working class, especially its poorest sections.