Unemployment Nearly Double Digits!
I originally wanted to title this post, “HOLY FUCK BALLS!” But something told me the casual web browser wouldn’t really get the jist of what the blog post would be about (I also was thinking of, “Holy Fucking Capitalism, Batman!”).
The Bureau of Labor Statistics just released a report on Friday stating that the U.S. economy lost 263,000 jobs for the month of September. Also, the Bureau also corrected data from employment records from March of this year stating that employment was actually 824,000 lower than it had reported back in April!
These latest figures have definitely taken the wind out of the sails of many economists and market commentators who had been saying for the past few months that the economy was in a V-shaped (as supposed to a U-shaped or even W-shaped) recovery and that we had already hit rock bottom and we were on our way up. Now many of those economists and commentators are revising their thinking (well, most of them, others are still adamant about the economy doing good).
Alan Rappeport reported for the Financial Times (U.K.):
The US unemployment rate has more than doubled in the past two years and the number of people without jobs has risen by 7.6m to 15.1m since the recession began in December 2007.
In September, hourly earnings ticked up by a penny to $18.67, but the average work week, a closely watched measure that signals future hiring, slid back to 33 hours. This remains close to a record low and economists suggest that an expansion in working hours will have to come before new hiring begins.
It seems that by the end of the year unemployment will more than likely exceed the 10% mark and climb to double digits, unemployment is already the highest its been since 1983. And, if you include the underemployed J. Bradford DeLong, dean of the Department of Economics at UC Berkeley, points out:
The U-6 underemployment rate–“total unemployed, plus all marginally-attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally-attached workers–is 17.0%.
Dave Shellock, also reporting for the Financial Times, writes how chronic unemployment (which will continue) will effect the economy:
Weakness in the labour market has been widely viewed as the vital missing component of the US economy’s recovery. But the other key data release this week, the US Institute for Supply Management’s September report, also cast doubts over the recent rebound in manufacturing activity.
“The [ISM] data do not challenge the cornerstones of this year’s liquidity trade – expectations about positive US third-quarter GDP growth and a prolonged period of ultra-accommodative Federal Reserve policy,” said Lena Komileva, G7 market economist at Tullett Prebon.
“But they do challenge the market’s optimism that this year’s capital markets rally is the bellwether of a ‘V-shaped’ economic recovery and it forces a negative revision of future quarters’ growth projections, which challenges current valuations,” she said.
While it is true that the job losses this weren’t “as bad” as the job losses during Winter of 2008 (around 500,000 or so a month) that isn’t saying much as hundreds of thousands of people are losing their jobs, work hours, or are being forced into part-time employment.
Wages also continue to stagnate creating a harder time for working class people to increase their savings and to keep up with their credit, utilities, and health care bills.
While certain Republicans and Democrats are stating that this report means that the Obama (and two Bush) stimulus plan didn’t work it seems that the stimulus plans weren’t actually enough and that if none of the stimulus plans went through the economy would be in a worse of spot than it already is.
(I’m not exactly sure why these dumb ass conservative elites are so against stimulus plans since it would stave off a massive uprising from the proletariat and semi-proletariat…It seems that they only seem to care about getting as much surplus value off the backs of the working class without wanting to put it back into circulation through higher taxes. Even if this means it will keep them in power longer!)
While all of this doesn’t necessarily show that capitalism in itself is utterly doomed for failure and that capitalism in itself is a bad thing ;what it does show is that even in an economy with continued job loss, continued real wage decline, continued loss of hours worked per week (even before this report came out), you had mainstream economists, commentators, and reporters talking about a V-shaped recovery with certain “positive signals” that the market was giving off to show that, indeed, the economy was doing good.
In the short term this shows us that when it comes to measuring the “success” of capitalism the hardships and struggles of the petty bourgeoisie, working class, working poor, and poor have no bearing on whether the economy is doing good or not. You had all of these chattering heads on the media talking about the “robustness” of the economy (and even economists who were writing analysis papers talking about the same thing) despite these difficult times yet they hardly mentioned all of the hardships that working class people were going through.
In the long term, however, looking at the past one-hundred years of capitalism this “bump in the road” seems to be pointing out a pattern in a huge and fundamental flaw in capitalism and indeed does show that capitalism in itself is indeed a system that is worth overthrowing. The history of capitalism shows us tremendous flaws and violent swings in the market that have always been much more brutal to the working class and Third World nations than to anyone else. This current crisis isn’t anything that is new, and the editors of the Monthly Review show us that these:
causes are embedded in the nature of mature capitalist economies, which generate enormous profits but not enough demand for the output that this surplus makes possible…To compensate for the inability of production to grow rapidly on its own, those who controlled the surplus shifted it into financial markets, creating the conditions for the bubbles in stock and real estate markets, bubbles that have now burst with devastating and long-term results. Although the financial system nearly collapsed — and would have had it not been for massive, debt-funded government bailouts — the most important consequence of the crisis has been the economic catastrophe heaped upon working people and their communities. Nearly seven million jobs have been lost since the Great Recession began almost two years ago. For workers, this crisis will drag on for years, with the prospects of stagnant and even falling wages and limited job opportunities. But the underlying contradiction is endless.
And, of course, this being America with capitalism and racism growing up hand in hand this current crisis has hit people of color far more than it has hit the white working class.
Unemployment for Black people is 15.4% and for Latinos is 12.7%. For whites the unemployment rate was 9% with Asians at 7.4%, however this rate is actually quite misleading by making it seem that the Asian American community is far better off than the white community (which plenty of other indicators show that it is most definitely not).
All of this shows us the (ongoing) legacy of white supremacy in this country when the government and the ruling class would privilege white workers over other groups in order to (to a certain extent) placate the white working class and to divide the workers against each other. By all indicators this privileging of the white working class is still happening (on economic, systematic, and cultural levels).
So all I have to say is: suck it capitalism! Thanks for totally fucking us over.