Abayomi Azikiwe, editor of the Pan-African News Wire, outside a home on the city's west side. A campaign is calling for a statewide moratorium on foreclosures and evictions. (Photo: Alan Pollock).
Originally uploaded by Pan-African News Wire File Photos
By Jaimeson Champion
Published Jun 11, 2008 9:27 PM
The latest Labor Department report, released June 6, disclosed that the U.S. economy lost 49,000 jobs in the month of May, and that the unemployment rate rose to 5.5 percent. The rise in the unemployment rate was the largest monthly increase in 23 years.
The report, coupled with a spike in the price of oil to more than $138 a barrel, helped initiate a stock market freefall, with the Dow losing nearly 400 points on the day.
Since the onset of the current economic crisis, the corporate controlled media outlets have devoted much ink and airtime to the monthly employment reports from the Labor Department. As the economic crisis has deepened by the day, each month has brought a gloomier report.
While the latest Labor Department report is dismal, the actual state of the U.S. labor market is much worse than the report discloses. Most of the “official” labor market gauges are deliberately designed to distort and obscure the actual employment picture. Much of the discussion on the health and direction of the U.S economy thus begins on false premises.
Here are four of the most propagated myths about the U.S. labor market:
1) The U.S economy has lost 324,000 jobs so far in 2008.
According to the Labor Department’s figures, the U.S. economy has suffered five consecutive months of job loss, resulting in a total of 324,000 layoffs this year. In reality, the actual number of jobs lost in 2008 is tens of thousands, if not hundreds of thousands, higher.
The Labor Department’s report does not accurately gauge sectors such as construction and service industries, where so many of the recent job losses have been concentrated.
Construction has been hemorrhaging jobs for more than a year as the housing market has completely collapsed. The hundreds of thousands of undocumented construction workers who have been laid off in the wake of what is the biggest housing market bust in history are not counted in the Labor Department’s numbers.
The economic slowdown has also led to the loss of thousands of service sector jobs. In low paid service industries, most U.S.-born and immigrant workers work “under the table.” As consumers rein in discretionary spending in the face of higher living costs, thousands of undocumented service sector workers have been laid off by bosses seeking to cut expenses. These laid off workers are also not counted in the Labor Department’s figures.
2) The unemployment rate is 5.5 percent.
The Labor Department puts the unemployment rate at 5.5 percent. The actual unemployment rate in the U.S. is much higher. The “official” unemployment rate does not take into account huge blocs of unemployed workers in the U.S.
Workers are only considered unemployed if they meet the Labor Department’s criteria for active job seekers. Workers who have become discouraged by months of fruitless job searching, and do not attend a designated amount of job interviews per month, are categorized as having “dropped out of the labor market.” These unemployed workers are then not counted in the official unemployment rate.
Also not counted in the official unemployment rate are millions of workers imprisoned by the racist criminal injustice system. The U.S. has the largest prison population in the world, with more that 2.3 million people behind bars. These workers, who would otherwise be competing for gainful employment, are forced out of the labor market and into the prison industrial complex, where they work for little to no pay.
3) The unemployment rate is ‘low by historical standards’
In a speech delivered the same day the Labor Department’s report was released, President Bush stressed that the U.S. unemployment rate was “still low by historical standards.” This has been a favorite refrain of the Bush administration lately, and has been repeated by nearly every corporate controlled media outlet. Even more liberal news outlets such as NPR have taken to reporting this refrain. (NPR, June 06).
But the reality is that the current “official” unemployment rate is wholly inaccurate. It does not come close to adequately assessing the number of U.S. workers without jobs. The ruling class’s deliberate strategy of not counting hundreds of thousands of jobless workers, and the incarceration of millions of workers in the prison industrial complex, has completely distorted the official unemployment number. Whether or not that distorted number is low by historical standards is meaningless.
4) Immigrants and workers in developing economies are responsible for job loss in the U.S.
This lie has been propagated ad nauseum by racist blowhards from Ross Perot to Lou Dobbs. Unsurprisingly, the response by the ruling class politicians and pundits to the current economic crisis has been to blame immigrants and workers in developing countries for job losses here in the U.S.
But it is the bosses’ drive for profit that has led businesses to reorganize production networks across the globe. It is the drive for profit that has led corporations to move production offshore in search of lower cost labor to exploit.
Workers in developing countries are struggling to feed and house their families, just as workers are struggling to do here in the U.S. It is the bosses and bankers who initiate the layoffs, wage cuts and foreclosures—not fellow workers.
Four myths—and one unavoidable truth
Behind the Labor Department’s shady statistics lies the unavoidable fact that the free market capitalist economy in the U.S. has broken down beyond repair and needs to be replaced. With each new wave of layoffs, wage cuts and foreclosures, more workers are coming to the stark realization that the so-called “American Dream” was nothing but an illusion.
As the U.S. capitalist economy continues to break down, there has never been a better time to intensify the struggle for socialism in the U.S. The deepening economic crisis is daily proving that a new economic system, focused on human needs—not corporate profit margins—is desperately need in the U.S. immediately.
E-mail: jchampion@workers.org
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