The Third International after Lenin

Wednesday, December 15, 2010

Fight for a socialist world


Grinding joblessness confronts millions in the United States

BY BRIAN WILLIAMS

It’s been almost a year and a half since the government announced that one of the deepest recessions since the 1930s had ended—but millions of workers wouldn’t know it.

The official unemployment rate in November rose to 9.8 percent, up from 9.6 percent the previous month, according to the U.S. Labor Department. Nearly 42 percent of those on the unemployment rolls have been out of work for more than six months.

This is the 19th consecutive month the jobless rate has been above 9 percent, the longest extent since World War II. Federal officials project no change over the next year.

Economists have tended to characterize this as a “jobless” recovery. Among the signs for optimism they point to is a rise in sales by U.S. auto companies by double-digit percentages in November, a 10 percent jump in pending home sales in October, and retail sales heading into the holidays. But for the 17.6 million workers unemployed and 9 million others forced into part-time hours, there’s no recovery in sight.

“Data out over the last few weeks tells us it is getting better,” writes John Mauldin in his Frontline financial newsletter. “The economy is growing, so why does it feel like a recession? Maybe because the data is still in recession territory.”

Over the past 60 years, after other recessions ended, unemployment levels declined. This is not the case today as the uncertainty about the future possibilities for profit-making are tempering any rise in capitalist production.

The last time unemployment rates were so high was during the 1981-83 recession, when the official rate reached 10.8 percent. Coming out of that recession unemployment steadily declined over three years to 7 percent and by the end of the decade to about 5 percent. While the pace of decline slowed considerably over previous recessions, it did go down.

One major difference between the 1980s and today is that there were a lot more manufacturing jobs then. According to the U.S. Department of Labor, there were 20 million manufacturing jobs in the late 1970s and 11.6 million today.

The bosses aim to produce more from fewer workers through speedup and attacks on workplace safety. Only about 75 percent of factory capacity is being utilized today. At the same time workplace “productivity” has risen by 2.5 percent or higher for the past six quarters. “We’re producing almost as much as we did before the recession, with 7.5 million less people,” Lakshman Achuthan, managing director of Economic Cycle Research Institute, told CNNMoney. While manufacturing jobs are declining—there are less today than any time since 1950—the concentration of employment in service industries and the government has increased significantly.

But at least 300,000 new jobs, including 150,000 for population growth, have to be created each month for the unemployment rate to decline, wrote CNNMoney. In November, employers added 39,000 jobs to their payrolls, according to the Labor Department report.

Factories cut 13,000 jobs last month and 5,000 were laid off in construction. Retail employment declined by 28,000. Government jobs dropped by 11,000, a figure expected to rise over the coming months as state and city governments eliminate more jobs to reduce budget deficits. In New York City, for example, Mayor Michael Bloomberg has announced plans to cut more than 10,000 jobs.

Meanwhile, federal programs providing extended unemployment benefits anywhere from 34 to 73 weeks above the 26 weeks provided by states expired November 30. Without Congress renewing these programs more than 2 million will lose what for many is their only income by the end of December and another million by January 31.

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