Some economists say that the low unemployment rate, 3.8 percent in May, could cause a recession. You’d think they want us to believe that high unemployment is better for the economy!
The truth is, as Marx explained, the real source of depressions is overproduction. Competition between companies forces them to manufacture as many products as possible until they run out of buyers.
And what causes this lack of buyers? Mostly how much money working people don’t have in their pockets. And therein lies the real problem. “Official” unemployment figures ignore most of the long-term unemployed, and all forced part-time workers. Many more people are stuck in this predicament since the 2007 Great Recession. If all of them were counted, the true May unemployment rate would have been 7.6 percent.
Even for the full-time employed, what’s low are wages. They’ve crept up a bit, helped by the $15 minimum wage movement. But many states have blocked local wage increases, and actual living wages are hard to come by. Low unemployment does not cause recession. Low wages do!