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Vol. 76/No. 21      May 28, 2012

Profit system drives growing
joblessness, boss offensive
(lead article)
The official U.S. unemployment rate is increasingly meaningless as a measure of what working people actually face—shrinking job prospects, falling wages and deteriorating working conditions.

While the figure declined slightly in April to 8.1 percent, more people were actually out of work. This is because so many more were classified as discouraged and no longer counted as part of the official workforce, which is used by the Labor Department to calculate the jobless rate and is defined as those holding a job or actively seeking work.

With about 3.7 job seekers for every available opening, many without work do become discouraged. This disproportionally hits Blacks and other layers of workers who under capitalism are routinely the last hired and first fired.

According to government statistics, there were 115,000 more jobs in April, but 342,000 workers were “dropped” from the labor force. The percentage of the adult population counted in the labor force—what government statisticians term the labor force participation rate—has been declining for the past decade, particularly in the last several years. It dropped 0.2 percent from March to 63.6 percent, the lowest level since 1981.

“If the same percentage of adults were in the workforce today as when Barack Obama took office,” stated the Washington Post, “the unemployment rate would be 11.1 percent.” If the percentage was where it was when George W. Bush took office in 2001, it would be 13.1 percent.

The participation rate rose steadily for about four decades starting in the mid-1960s, during which time increasing numbers of women joined the workforce every year. The rate for women reached a high of about 60 percent in 2008, but has since declined.

The number of male workers counted in the labor force fell in April to 70 percent, the lowest since the government began keeping these figures in 1948.

A raft of economic commentators have pointed to the retirement of the post-World War II “baby boomer” generation as a major factor. According to the Federal Reserve Bank of Chicago, a quarter of the decline since 2007 is attributable to retirement. But in fact older workers are going back to work at a striking rate, postponing a retirement they can’t afford. Employment of workers over 55 increased by nearly 3 million in the last three years, 1.1 million more than the net number of jobs created.

Long-term unemployment has also reached record highs; the average duration is currently 39.1 weeks.

A growing pool of “discouraged” workers, persistently high unemployment, long-term joblessness—all this points to an expansion of what Karl Marx termed the industrial reserve army of labor. This tendency inherent in the workings of capitalism is coming to the fore as the bosses’ profit-driven system has entered the initial stages of a profound worldwide crisis.

Fewer workers produce more

In manufacturing, where 16,000 jobs were added in April, the bosses have shored up their profit margins through wage cuts, speedup and other concessions wrested from workers. Bosses in the U.S. have made substantially more progress along these lines than their rivals in much of Europe and elsewhere, where industrial production and employment is markedly declining. In addition, some U.S. government subsidies, designed to give an added edge in the cutthroat international competition for markets, have also provided a marginal, temporary boost to this sector.

At Revere Copper Products in Rome, N.Y., for example, where the state government has supplied electric power at cost, a concession contract endorsed by the United Auto Workers increased workers’ health care costs, eliminated paid lunch breaks and has emboldened the company to crank up the pace of work—safety and health be damned. “The time required to turn a 22,000-pound cake of copper into finished sheets of various thicknesses has been reduced to three days from three weeks,” reported the New York Times.

What capitalists term “productivity,” the amount of work extracted from living labor, has been rising dramatically since 2009. The U.S. economy today “is producing more goods and services than it did when the recession officially began in December 2007, but with about five million fewer workers,” the Times noted.

Much of the press commenting on the U.S. economy lamented about a blip decline in productivity registered in the first-quarter this year of 0.5 percent, an indication that the pace and scope of the bosses’ drive to squeeze more out of each worker is such that a temporary pause is necessary before they press another offensive on this front.

Real wages are declining. Over the past 12 months, average weekly earnings are up 2.1 percent, reported the Wall Street Journal. But the purposely understated official inflation rate has risen by 3 percent, which doesn’t even account for the rising cost of food and gas. What the propertied rulers aim to do over time is impose a permanent lowering of expectations and socially accepted living standards of working people, driving down what Marx termed the “historical and moral element” of the value of labor power.

Rulers react, debate crisis

Meanwhile, the ruling class and its press debate among themselves the policy course of their government in relation to taxes, budgets, financial regulations and monetary adjustments.

For example, the New York Times, one of the main liberal papers, is pressing Obama’s plan of more government spending and what is essentially money printing to ostensibly spur “growth” and create jobs. “Without further government help—especially more aggressive spending to boost demand—the economy simply does not have the momentum to heal itself any time soon,” it says in an editorial May 4. Above all, this approach temporarily buoys certain profits and further inflates stock market prices and other financial bubbles to increasingly unsustainable levels.

The Wall Street Journal is among those polemicizing against this course. “The Federal Reserve has maintained a super-easy monetary policy in the name of reducing the jobless rate and to reflate the housing market,” the Journal stated, “but this has contributed to higher food and energy prices and thus reduced real income gains. This too is a disincentive to work.”

But the debate is over how the profits capitalists make from the labor of workers is circulated and divvied up, not how it’s produced. Some of their measures are designed to buy some time, to postpone some of the consequences of the crisis, as they organize to crank up the rate of exploitation of the working class.

The inevitable result of these assaults over time is a rise of the class struggle, the initial stirrings of which can already be seen.
Related articles:
Greek rulers fail to form govít, Europe crisis deepens
Workers need conscious leadership
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