U.S. workers’ high standard of living was once touted as proof of the wonders of the profit system, although this standard was far from equally enjoyed by all. Now, however, even the most elite sections of the U.S. working class are fast joining the rest of the world in demonstrating, in the words of the Communist Manifesto, that under capitalism “The modern laborer, … instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper.”
Every aspect of the U.S. employment picture points to a long-term slide in the conditions of life and work. In September, Katrina and Rita swept away 300,000 jobs, with more hurricane-related losses still to come. But this disaster only worsened an already deteriorating scene. From stubborn unemployment to falling wages and benefits and the disappearance of the highest-skilled and best-paid jobs, the working majority in the U.S. is under attack.
Hidden unemployment. Officially, unemployment stands at “only” 5.1 percent, a rate once considered high, yet half of what it was in 1982-83. But this figure, which includes only people who have been looking for jobs in the past 30 days, camouflages a much worse reality. It doesn’t count discouraged workers who have given up, young people looking for their first job, and underemployed workers, even if they work only one day a week. Taking groups like these into consideration, analysts put the true number of jobless and underemployed workers between 9 and 11 percent: about one out of every 10 people.
Count in the enormous prison population — five to 10 times greater than in other industrialized countries — and unemployment increases by almost another 2 percent. Among African American men, the rate rises more than 7 percent!
The appalling race differential is generally ignored, yet, using government figures, African Americans suffer more than twice the unemployment rate of whites — 9.4 percent versus 4.5 percent. For Latinos, the rate is 6.5 percent.
We have technically been in an economic recovery for four years, meaning that national revenue is up (in other words, profits). But employment has barely nudged upward. According to the Center for Economic and Policy Research, if job growth during this recovery matched earlier patterns, 4.3 million more people would be employed.
Women, young workers and people of color have lost a disproportionate share of jobs. On the other hand, shrinking retirement funds and rising healthcare costs are pushing senior employment rates up.
Wages fall farthest for those at the bottom. Compounding the gloominess of this picture is a steady drop in wages.
In October 2005, the Senate rejected proposals to raise the federal minimum wage from $5.15 to $6.25. The last time this wage was increased was eight years earlier; over that time span, Senate members voted to raise their own pay by $28,000!
With inflation taken into account, the minimum wage is 26 percent lower today than it was in 1968. Meanwhile, according to the CIA’s World Factbook, “Since 1975, practically all the gains in household income have gone to the top 20 percent of households.”
Rising misery for workers is the consequence. Forty-five million people have no medical coverage. The U.S. infant mortality rate is comparable to that of Malaysia, with a quarter of the U.S. national income. Thirty-seven million people live in poverty, according to federal guidelines, which are set unreasonably low. The Economic Policy Institute’s calculation of the income needed to meet the basic requirements of a two-parent, two-child family is $39,984, a figure shockingly close to the median household income of $44,389. And median income, or the midpoint of all incomes, is falling: it has dropped for five straight years in a row.
Farewell to good jobs. Well-paid jobs are becoming more scarce all the time. In some cases, the jobs themselves are vanishing, exported overseas or made redundant by technological advances or plain old speedup. In other cases, the jobs may still exist — or some of them, anyway — but the pay and benefits are plunging. And, in the economy overall, there’s a downward shift taking place: according to the AFL-CIO, jobs in industries that are expanding pay 21 percent less than in those that are declining.
Whole industries, from the airlines to grocers and automakers, have put drastic wage cuts on their agendas. The auto industry, with its historically highly unionized and well-paid workforce, was recently rocked by the bankruptcy announcement of Delphi Corporation, formerly a parts division of General Motors. Along with threatening the health benefits and pensions of employees belonging to the United Auto Workers union, Delphi is demanding a 63 percent wage cut.
Other companies are simply exporting jobs to countries where the standard of living is lower. Businesses are increasingly locating not only factories, but also research facilities, in countries like India and China, where wages are far lower even for technical and professional workers.
What can be achieved? Plenty! The answer to this race to the bottom pitting worker against worker, and the employed against the jobless, has to be a cooperative, internationalist one. And if U.S. workers fight to hold the line and regain lost ground here, it will strengthen the hand of workers everywhere. We can begin by demanding:
• Reincarnation of affirmative action programs for people of color and women, to remain in place as long as inequality in employment exists.
• Public works programs like those of the 1930s, to provide full employment as well as rebuild our crumbling infrastructure and provide essential social and public services.
• Set the minimum wage at a living wage level, that is, high enough to lift families out of poverty and keep them out.
If the CEOs protest that the profit system can’t accommodate such demands, we can answer that they have proved the point made by Karl Marx and Frederick Engels in the Communist Manifesto: the capitalist class “is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him.…its existence is no longer compatible with society.”