Jobless Recovery

January 13, 2004

The official unemployment rate fell in December from 5.8% to 5.7%. But the government admitted that this decline in the number of workers counted as unemployed was only due to the fact that some 300,000 workers became so discouraged that they stopped looking for work and, according to the government no long count.

The December figures again confirm that we are in another "jobless recovery." The U.S. economy has been in a period of economic growth since November 2001. And indeed, during these 2 years, corporate profits and the gross domestic product keep going up. Yet nearly 1 million jobs have been lost during this time. In terms of job creation and employment, the current economic "recovery" is the worst in 60 years.

Nor are the employed workers getting any benefits from the recovery. For example, in the third quarter of last year, while worker productivity increased by 9.4%, real wages fell by .7%. In other words, the capitalists are tremendously increasing the intensity of labor and the rate of exploitation even while workers are getting paid less and less. Again the economic recovery is for the capitalists only.

This "jobless recovery" and the dramatic increase in the rate of exploitation of the workers reveal the depth of the crisis of the capitalist system. Capitalism has always gone through "boom and bust" cycles of economic expansion followed by economic contraction. But formerly, during the expansion phase, unemployment would go down and wages would generally go up. But today, even in the "best of economic times," unemployment keeps rising and wages keep falling.

In other words, even at the peak of its performance, the U.S. economy, advertised as the "strongest" capitalist economy in the world, is incapable of providing a livelihood for tens of millions of workers and their families.

But guarantying a livelihood for everyone must be the starting point for any genuinely humane economic and social system.