Tuesday, March 20, 2012

Jobs News Deceptive Election 'Dust' Can't Disguise Deep Economic Crisis

Jobs news deceptive Election ‘dust’ can’t disguise deep economic crisis

By Fred Goldstein
Published Mar 18, 2012 11:17 PM

At the end of the first week in March, the corporate print and electronic media were using the latest job creation numbers to try to drum up optimism about the capitalist economic recovery.

Trumpeting the news that the Labor Department reported 227,000 new jobs created in February, CBS, NBC, CNN, the New York Times, Washington Post, Wall Street Journal and the Obama administration all tried to convince the population that a true recovery was underway.

This exercise in “talking up the economy” was calculated to throw dust in the eyes of the masses, who are suffering from massive unemployment and underemployment, low wages, poverty, foreclosures and general insecurity. Of course, the establishment in general wants to give some form of hope to the millions of unemployed. But in addition the White House and the Democratic Party are trying to gain credit among the workers for allegedly “getting the economy going again” as the presidential election approaches.

The claim that these new numbers show a resurgent economy is patently ridiculous, even taking the government numbers at face value. What is not mentioned is that while 227,000 new jobs were supposedly created in February, during that same month about 125,000 new workers came into the work force. So the net gain for the month was actually about 100,000 jobs.

According to the same Labor Department, 13 million workers are totally unemployed. At this rate, it would take 12 years to put them all back to work — if no further crisis intervenes, which is an unlikely proposition.

Of course, any number of new jobs is welcome to workers who got hired. But this was a drop in the bucket. The big-business media left out the big picture.

Economy almost 10 million jobs short

Some 8.5 million jobs were lost in the downturn, while about 3.5 million jobs have been created during the recovery, leaving a deficit of 5 million. But 4.7 million new workers came into the work force in that period. Thus the economy would have to create an additional 9.7 million jobs to replace all those lost in the downturn and employ the new workers.

And even if these jobs were created tomorrow, unemployment would still be over 5 percent.

In addition:

•There are still officially 23.5 million workers unemployed or underemployed, including 8.1 million who need full-time work but are forced to work part-time, plus 2.5 million workers classified as “marginally attached.”
•Official unemployment for African Americans and Latinos/as actually increased in February to 14.1 percent and 10.7 percent, respectively.
•Unemployment among young workers between the ages of 16 and 24 was officially at 16.5 percent.
•The number of first-time claims for unemployment increased by 8,000 to 362,000 last week.
•At least 3 million workers have totally dropped out of the work force since 2008. If they were counted, unemployment would be at 10.8 percent.
•Five million workers have been jobless for six months or more.
•Prices are rising at a faster rate than wages. So wages that are already low are actually sinking.
•Fifteen percent of the population — that’s one in every seven people — are on food stamps. Food stamp use shot up during the downturn, and has continued to rise even during the “recovery.” It rose 5.5 percent in 2011 because of unemployment and low wages.
•There are 11.1 million homeowners who have “underwater” mortgages — they owe more money on their houses than the houses are worth. More than 4 million homes are in foreclosure.

Statistics showing the magnitude of the economic crisis for the working class could be extended to many other areas: school closings, lack of health care, etc. The mouthpieces of capital have little to say about this when they want to rouse cheers for the economy.

Meager cyclical upturn within a profound global crisis

The announcement of three consecutive months in which job growth hit 200,000 plus is a meager impulse of cyclical business activity amidst the pervasive general crisis of a system mired in stagnation and decline.

Such cyclical activity is inevitable. Sooner or later, inventories must go down and need to be replenished.

Frederick Engels, co-founder of Marxism along with Karl Marx, described the capitalist cycle over a century ago in his foundational work “Socialism, Utopian and Scientific.”

Engels describes the capitalist crash: “Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows bankruptcy. … The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off … until production and exchange gradually begin to move again.”

Engels described how the economy begins to pick up and accelerates into a boom. While the boom is not happening at this present declining stage of capitalism, the bust is familiar.

During the housing bubble, overproduction of housing took place — more than 1.5 million houses were built that could not be sold at a profit. Construction ground to a halt. Workers in the industry and all related industries were thrown out of work. The same happened in the auto industry, the steel industry, transportation, mining and so forth.

And now, two and a half years after business began to recover, inventories are finally, gradually going down. No capitalist can afford to be left with low or no inventory, lest they miss a sale. So inventories must be restocked. That is what has happened in the U.S. economy over the past quarter.

Buried in the mountain of hoopla about the recovery are nervous admissions about slow growth. For the bosses slow growth means slow profits. For the workers slow growth means endless mass unemployment.

The Financial Times of Feb. 29 wrote that in the final quarter of 2011, “most growth was due to an inventory build-up and final consumer demand was sluggish.” The Times pointed to “an economy in which credit conditions are easing and the labor market is starting to improve, but that has not fed through into a robust rise in consumption and investment, leaving doubts about the sustainability and momentum of growth in 2012.”

The bankers are already expressing concern over inventories not being sold off.

“J.P. Morgan Chase economists lowered their overall projection for first-quarter [Gross Domestic Product] to 1.5 percent from 2 percent. They also cite downside risk to their current estimate that growth would accelerate to 2.5 percent in the second quarter, partly because the first-quarter data suggest higher business inventories heading into the second quarter,” wrote the Wall Street Journal on March 9. Goldman Sachs and other institutions are also beginning to lower their growth estimates for the U.S. economy to a miniscule 2 percent plus or minus.

The root problem is that the bosses need fewer and fewer workers to accomplish production and perform services. Technology has replaced workers, reduced skills, lowered wages and made growing mass unemployment a permanent feature of capitalism.

That is the consequence of the steadily slowing growth of the capitalist economy. Karl Marx explained this development more than a century ago. He showed that as capitalism grows it eventually forces workers to become so productive through the use of technology that they produce more and more, faster and faster, which makes the products harder and harder to sell. This is what blocks the growth of capitalism eventually. That is the point we are at right now.

From 2000 to 2009, some 5.8 million manufacturing jobs were lost in the U.S., yet manufacturing output in 2011 was almost the same as in 2000. This is also true in Germany, South Korea, Britain, Japan and other industrialized capitalist countries. And the productivity that has swept manufacturing has also invaded the service and knowledge industries.

Struggle against capitalism itself

For the working class, these dry statistics carry a tremendous warning. They shout that the crisis is not over and worse may be coming. They say workers must disregard all the hype of Obama, the politicians and pundits about things coming back to the way they were. The only course is to prepare for struggle.

Mass organization and struggle will get jobs. This is what the Republic Windows and Doors workers learned in 2009 and again just this past month when they reoccupied the plant to protect their jobs.

This is what the workers in Wisconsin started to do with last year’s two-week occupation of the state Capitol in Madison, before they were derailed into electoral politics by the labor leadership and the Democratic Party.

Struggle was the message of the International Longshore and Warehouse Union when it took on the entire West Coast shipping industry to protect union jurisdiction and job rights at Longview, Wash. It got crucial support from Occupy Wall Street in that struggle.

This was the message in 2006 when millions of undocumented workers went out into the streets to stop reactionary anti-immigrant legislation.

And this will be the message this May Day in New York City’s Union Square, across the country and around the world.

Workers in Greece, Portugal, Spain, Italy, Britain, Quebec, Romania and elsewhere are fighting the vicious austerity programs of the bankers and the bosses, who are trying to make the workers pay the price of their global capitalist crisis.

Workers here do not need just 227,000 jobs for a month — jobs which may come and go according to the fluctuations of the capitalist market and the profit system.

They need true full employment with tens of millions of jobs at decent pay with benefits that establish secure lives with futures for themselves and their children. It is time to say enough is enough and open up a struggle against capitalism itself.
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