The Third International after Lenin

Tuesday, November 17, 2009

Bosses use layoffs to raise worker productivity


U.S. government officials are more confidently claiming that the economy is beginning to improve. One of the bright spots they point to is a rise in "productivity." Those with jobs are being driven by the bosses to produce more in fewer hours.

The official unemployment rate is now above 10 percent. Since the 1930s depression, this has happened only once before.

The day before release of the October unemployment figures, Congress voted to extend unemployment benefits in all states by 14 weeks, and an additional six weeks in states with unemployment levels greater than 8.5 percent.

There are 5.6 million workers who have been out of work for six months or more. They now make up one-third of those on the unemployment rolls. The benefit extension will apply to those whose checks will run out by December 31, which the Senate estimates is nearly 2 million people, CNN Money reported.

For the month of October, unemployment rose to 10.2 percent—that’s 15.7 million workers—up from 9.8 percent the previous month, according to the Labor Department. The unemployment rate for teenagers rose to 27.6 percent; for African Americans to 15.7 percent; and to 8.1 percent for women.

About 2.4 million unemployed workers “marginally attached to the workforce” are not counted, as the government claims they haven’t looked for work in the past four weeks. Another 9.3 million have had to accept only part-time work. The actual unemployed and underemployed rate is now 17.5 percent—27.4 million workers.

A Bloomberg News survey of economists projects the unemployment rate to average nearly 10 percent for all of 2010. The Federal Reserve predicts unemployment will remain above 8 percent through 2011, 3 percentage points higher than it was at the start of the recession, which officially began in December 2007.

The largest job cuts in October were in manufacturing, construction, and retail trade. Since December 2007 bosses have eliminated 1.6 million jobs in construction and 2.1 million in manufacturing, reflecting the ongoing contraction of capitalist production. And more cuts are in the works. On November 3, Johnson & Johnson, the world’s largest health-products company, announced it’s eliminating 7,000 jobs.

Indicating “some improvement in the labor market,” the Wall Street Journal pointed to the decrease by 20,000 of first-time claims for unemployment benefits for the week ending October 31. However, 512,000 people filed. There have been more than half a million new claims filed each week since the beginning of the year.

A report issued November 2 by the Institute for Supply Management described what Bloomberg News called a “surge in production,” showing “the first sign of growth since July 2008.” The index reached its highest level since 2006, the business news agency said.

The chairman of the purchasing managers’ factory survey, Norbert Ore, however, called this description a bit “misleading.” The index is a gauge of sentiment rather than actual hiring, reflecting a small callback of laid-off workers, he told the media. For example, Cummins Inc., the largest maker of heavy-duty diesel truck engines in North America, cut about 7,500 workers from late 2008 through June 2009 and has since recalled about 900.

Labor 'productivity' rises

Third quarter labor “productivity” rose at a 9.5 percent annual rate, nearly 3 percent higher than the previous quarter and the biggest gain in six years. Output increased 4 percent while hours worked declined 5 percent. The bosses are producing more with fewer workers over fewer hours.

The “productivity” rate in manufacturing rose to 13.6 percent in the third quarter, the largest increase in quarterly rates since 1987, when these figures began being recorded. In the same quarter industrial unit labor costs for the bosses fell by 7.1 percent.

An Associated Press report questions the accuracy of government figures on actual jobs created under the $787 billion federal “stimulus” plan passed by Congress in February. The Barack Obama administration reported in mid-October that some 30,000 jobs were created or “saved” through federal government “stimulus” contracts with businesses. The president promised that this move would create or save 3.5 million jobs over two years.

In some cases jobs credited to the stimulus program “were counted two and sometimes more than four times,” stated AP. Among the examples cited were Teletech Government Solutions in Colorado, which reported creating 4,231 jobs, although 3,000 of those workers were paid for five weeks or less. Koring Group in Toledo, Ohio, counted the 26 workers it hired twice, and their jobs only lasted about two months.

In another development, individuals filing for bankruptcy in October rose to nearly 136,000, a 9 percent increase over the previous month. According to the American Bankruptcy Institute, 1.4 million will file in 2009, the highest since 2005.