No economic recovery for the working class

[Bert Bakker]

REPLY TO: D66 at nic.surfnet.nl

Tja, dan moet de working class ook maar wat harder werken, in plaats van
steeds vroeger met pensioen :-p




2010/4/7 Antid Oto <aorta at home.nl>

> REPLY TO: D66 at nic.surfnet.nl
>
> No economic recovery for the working class
> 7 April 2010
>
> Last Friday’s US unemployment report, which showed a net payroll gain
> of 162,000 jobs in March, has been seized on by the Obama
> administration and much of the media as confirmation of official
> claims that the recession is over and a recovery in the jobs market
> has begun.
>
> Calling the Labor Department report for March “the best news we’ve
> seen on the jobs front in more than two years,” President Obama said,
> “We are beginning to turn the corner.” The New York Times began its
> report on the jobs data with the words, “The clouds have parted.”
>
> A closer look at the figures, however, leads to far less sanguine
> conclusions. The net gain in non-farm payrolls was far less than the
> 200,000 to 300,000 that had been predicted by most economists.
> Moreover, 88,000 of the new hires were temporary—including 48,000
> brought on to conduct the US census survey.
>
> The so-called underemployment rate, which includes those involuntarily
> working part-time and those who have given up looking for work, rose
> to 16.9 percent, the third straight monthly increase. The ranks of
> people seeking full-time employment but forced to work part-time
> increased to the staggering level of 9.1 million.
>
> Perhaps most ominous, the number of long-term unemployed—those laid
> off at least 27 weeks—shot up by 414,000 to reach 6.5 million. This
> category accounts for more than 40 percent of jobless workers, a far
> higher percentage than in the deep recession of 1981-82. The average
> length of unemployment in March rose to 31 weeks, the highest level on
> record going back more than six decades.
>
> Average hourly wages continued their protracted decline.
>
> In the 27th month of a recession that has wiped out over 8 million
> jobs, the US economy produced fewer new full-time jobs than are needed
> to keep pace with the normal monthly growth in the labor market.
> Despite a slight uptick in manufacturing and construction—following
> months of contraction—the report reflects an economy mired in slump
> with no prospect of bringing unemployment down to pre-crisis levels
> for years to come.
>
> To the extent that a slight increase in production in the real economy
> has occurred, it has been bound up with a massive assault on the jobs,
> wages, benefits and living standards of the working class. The ruling
> elite, spearheaded by the Obama administration, is using the economic
> crisis to effect a permanent reduction in the conditions of workers.
>
> New and lower benchmarks for wages and working conditions are being
> set that will remain in place. They are not temporary. On this basis,
> corporate profits have soared despite near double-digit unemployment
> and depressed consumer spending.
>
> The deterioration in the social position of the working class is
> reflected particularly sharply in productivity figures. In the fourth
> quarter of 2009, when the US gross domestic product (GDP) surged by
> 5.6 percent, productivity—the amount of production squeezed from each
> worker—rose at an annual rate of 6.9 percent. Unit labor costs fell
> sharply, by 5.9 percent. Inflation-adjusted hourly wages fell by 2.8
> percent from the prior quarter.
>
> These figures document a sharp rise in the intensity of the
> exploitation of the labor force.
>
> Another indication of the class character of the so-called recovery is
> the divergence between GDP and a measure of national income—gross
> domestic income (GDI). In the third quarter of 2009, the GDI was still
> contracting even as the GDP rose 2.2 percent. The current gap between
> GDP and GDI is the biggest on record.
>
> This statistical divergence reflects the fact that the present
> recovery is largely a rebound in corporate profits and the wealth of
> the financial elite, while the living standards of the vast majority
> of Americans are continuing to fall. This is a recovery in which class
> divisions and social inequality are widening.
>
> This can be seen further in a list published Sunday by the New York
> Times of the 30 highest-paid US corporate CEOs. Fully 10 of the 30
> preside over firms that registered declines in revenue and net income
> in 2009, yet recorded gains in total return—a measure linked to the
> change in the company’s stock price. All but three of these CEOs saw
> their compensation increase over 2008.
>
> The “success” of these corporations, and of their chief executives,
> was due overwhelmingly to cost-cutting measures that, even in the face
> of reduced revenues and income, drove up the firms’ share value. This
> provides a snapshot of the degree to which the “recovery” has been
> based on ruthless downsizing, wage-cutting and speedup.
>
> To give a few examples:
>
> * The third highest-paid CEO, Ray R. Irani of Occidental Petroleum,
> received $31.4 million, an increase of 39 percent. His firm suffered a
> 37 percent decline in revenue, a 57 percent decline in net income, but
> a 38 percent increase in total return.
>
> * Susan M. Ivey, number 27 on the list, got an 84 percent increase in
> pay to $16.2 million. Her company, Reynolds American, recorded
> declines in revenue and net income of 5 and 28 percent, respectively,
> while its total return soared by 40 percent.
>
> * Andrew N. Liveris of Dow Chemical, number 28 on the list, received
> $15.7 million, a pay hike of 23 percent. His company’s revenue fell 22
> percent, its net income fell 61 percent, but its total return jumped
> 87 percent.
>
> Alongside cost-cutting and increased exploitation of labor, the
> recovery has been sustained by government bailouts of the banks and a
> virtually unlimited supply of cheap credit by central banks in the US
> and around the world. This has driven up stock prices all out of
> proportion to the state of the real economy and fueled even greater
> speculative excesses than those which precipitated the 2008 financial
> crash. Recent weeks, for example, have seen an explosive growth in the
> junk bond market.
>
> Far from resolving the underlying contradictions of world capitalism,
> this plundering of public resources has intensified them. Massive,
> structural imbalances in the global economy—particularly between
> deficit countries, led by the US, and exporting, surplus countries,
> led by China and Germany—have grown more pronounced.
>
> Facing record levels of state debt and budget deficits, the US is
> seeking to increase its exports at the expense of its rivals, but so
> are all of the other major deficit countries, while surplus nations
> such as China and Germany fiercely defend their export markets. At the
> same time, the emptying of state treasuries to rescue the financial
> elite has increased the pressure for draconian austerity measures to
> reduce government outlays. This, in turn, can only further depress
> consumption, making the competition between countries for export
> markets all the more ferocious and increasing the likelihood of
> outright trade and currency wars.
>
> The Obama administration, which has pledged to double US exports in
> five years, appears to be basing its economic strategy on driving down
> American labor costs to the point where US manufacturing can be at
> least partially revived as a cheap labor center for export abroad.
>
> Under conditions of long-term mass unemployment, declining wages,
> growing poverty, record personal bankruptcies and soaring home
> foreclosures, the entire economy increasingly resembles a house of
> cards. The revival of the housing market, which is key to any genuine
> recovery, appears highly problematic with home foreclosures expected
> to rise from 1.7 million in 2009 to 2.2 million this year.
>
> For the working class, there is no real recovery within the framework
> of the capitalist system. To avert ever more brutal conditions of
> exploitation and poverty, it must organize its resistance on the basis
> of a socialist, revolutionary and internationalist perspective.
>
> Barry Grey
>
> http://wsws.org/articles/2010/apr2010/pers-a07.shtml
>
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