Jan 7, 2008
The U.S. Labor Department announced a big increase in the official unemployment rate, to 5% in December. Job cuts were all across the board, in manufacturing, the construction of residential and commercial buildings and financial services. Stores even laid off tens of thousands of retail workers – right in the middle of the big holiday rush.
For the last five years, politicians and economists alike had trumpeted the supposed strength of the U.S. economic recovery and the growth in jobs. This was always a lie. But now it is becoming truly grotesque and hideous.
Currently, official statistics show that there are more than 17 million workers who are either unemployed or underemployed. That is almost equal to the entire population of New York State. And everyone knows that the official statistics deliberately don’t count a big number of unemployed workers.
This human catastrophe is what the apologists for big capital tell us is “low” unemployment!
Of course, the capitalists did create some jobs. But what jobs they were! Most were part-time or temporary, which didn’t pay much of anything and didn’t last long. The capitalists also expanded the number of so-called “independent contractors” – a legal fiction – who are paid no benefits, not even Social Security, unemployment or disability insurance.
Job growth was so small it did not even keep up with the growth of the population. Thus, the share of the population that was actually employed fell. Increasing numbers became part of the underground economy, working under the table or depending on little schemes, which of course sometimes meant criminal activity or simply begging out on street corners. In other words, millions more people were driven to the kinds of destitution that one finds in underdeveloped countries around the globe.
Over the last five years, the capitalists invested very little in new production. But companies did recycle their profits back into the pockets of their top investors and executives through higher dividends and stock buy backs and executive bonuses and stock options.
Banks, financial companies, insurance companies and real estate developers fed the biggest housing and commercial real estate bubbles in history. There was rampant speculation on basic commodities, from oil to precious metals to wheat, corn and rice. Companies bought and sold each other in a merger and acquisition boom of historic proportions, a boom that drove up the price of company stocks.
All of this was funded by a stupendous increase in debt of all kinds, trillions of dollars of debt, debt that itself was speculated on, that is, repackaged and bought and sold, over and over again, each time at higher prices.
Now the speculative bubbles have burst, leading to the freezing of debt and credit markets worldwide. Not only are millions of people being tossed out of their homes, but countless numbers of workers and employees are losing their jobs. And these job cuts are beginning to spread, feeding on themselves. More downsizing is just around the corner in what could turn out to be a vicious downward economic cycle.
This is what capitalism has to offer working people. During the so-called good times, tens of millions are either unemployed or are barely employed. When the crisis hits, they are joined by tens of millions more.
All so that a tiny minority of capitalists can become ever richer.