Nov 9, 2009
The official unemployment rate is 10.2%! This depression-level rate doesn’t include all those working sharply reduced hours and those who have given up looking for work. A more complete count of the unemployed and underemployed puts the rate at 22.1%, meaning more than one in five workers is hit.
With the economic crisis, companies are selling less and they’re squeezing more out of workers who remain on the job. Productivity is increasing at the incredibly high rate of 8.2%. This means companies are laying off faster than their sales are shrinking.
The result of these layoffs is a sharp cut in the demand for all kinds of goods and services, since unemployed workers buy only bare essentials. And workers with reduced hours and in fear of being laid off don’t buy expensive items like cars and new houses. So the economy goes further down and still more workers are thrown out of work.
Today, manufacturing is operating at only two-thirds of its capacity. This is after all the plant closings of recent years. This marks the craziness of this system. One-third of factory capacity lies idle. Millions of workers are out of work. Workers would love to buy a new car or a new house, but they can’t afford to.
Materially, everything exists ready to be used to meet human needs – empty factories, vacant construction sites, empty railroad cars and over-the-road trucks, etc. But a broken system sinks the population further into mass unemployment.