Saturday, April 12, 2008

Job loss: another sign of capitalist decay

Published Apr 12, 2008 9:50 AM

Last month, 300,000 workers lost their jobs. When offset by the number of new jobs, 80,000 jobs were eradicated in March.

Since 2008 began, there has been an overall net job loss of 232,000 (Dept. of Labor report, April 4). Private industry shed nearly 300,000 jobs in that same period. This is the largest number of job losses in five years. The “official” unemployment figure is now 5.1 percent of the workforce, but the real story is much worse than that.

In the last year, nearly one million workers have lost their jobs.

Last week, 407,000 workers filed for unemployment insurance. For many this was the first time.

Although the Department of Labor says joblessness rose to 7.8 million in March, many more people have been affected. The “hidden unemployed” include nearly five million workers who desperately need full-time jobs with benefits, but are working part time “involuntarily” because of cuts in hours or lack of full-time jobs. At least another 4.5 million people want jobs but can’t find work at all. Many have given up looking for work.

An estimated 127,000 new jobs must be added monthly to keep unemployment at 4.8 percent, the rate one year ago. (Economic Policy Institute) But that still means that more than 7 million are “officially” out of work. This figure may be acceptable to the capitalist bankers, bosses and economists, as unemployment is inherent in the capitalist system, but it’s misery for those workers and their families, and for the many not even counted.

Though the current crisis was set off in the housing and financial markets, it is winding its way through almost every sector of the economy.

Who has lost jobs? Construction workers who build homes, apartment and commercial buildings—often without safety equipment—lost 51,000 jobs last month. Due to capitalist overproduction of homes and buildings—not being sold for profit—sales fell. Then the industry contracted, and the workers paid the price.

The manufacturing sector, including those companies making building materials such as lumber and drywall, felt the impact. Companies lost sales, and then cut 48,000 jobs last month.

Those who work behind store counters or stock shelves lost 13,000 jobs in March. Retail store owners cut back when profitable sales weren’t high enough for them.

Employment services lost 42,000 jobs last month, with half of them temporary workers, as employers cut back on hiring. Jobs were also wiped out in the auto industry, at garment and textile companies, banks, real estate offices, hotels, airlines and communications and other industries.

Rippling impact of job cuts

All sectors of the working class feel the impact of a declining economy, as all genders of all ages are damaged by the current wave of layoffs. Those in the oppressed communities are the hardest hit.

Although the Department of Labor says that unemployment has reached 9 percent among African-American workers and 6.9 percent among Latin@ workers, the real rates are much higher, especially in the big cities. The percentage of African-American youth who are unemployed is now 19.7 percent, but these figures don’t tell the whole truth.

With more workers unemployed with less or no income, they are purchasing less, which leads to a downward spiral. As companies lose profits—the prime goal of capitalist production—they react by contracting and laying off more workers.

Joshua Shapiro, chief U.S. economist for MFR Inc. in New York, warned, “With the consumer’s only source of support for spending coming from job-related income growth, a rapidly weakening labor market is the worst possible news for the economy.” (Los Angeles Times, April 5)

It’s also getting harder for workers to pay their bills, as real wages are not keeping up with inflation, another bad sign.

More workers won’t be able to pay mortgages or rent, so they will lose housing. Many more will join the 47 million people without health insurance. Pensions will be lost. College educations will be unobtainable. As more people have to take part-time or low-wage jobs, more will need food stamps, and more will be impoverished.

Lives are being thrown into insecurity and uncertainty. Yet this devastation is all intrinsic to capitalism.

The latest job loss figures have set off alarm bells nationwide among business owners and bankers, but not because of any concern about workers or their families. They’re afraid of the “R” word—recession—as they fear a further economic downturn and lost profits.

Jared Bernstein, of the Economics Policy Institute, noted, “Three months in a row of payroll job losses and a sizable negative revision: these are clear signs that the job market is in recession.” (The Telegraph, April 5) He also predicts more job losses are coming.

Congress’ meager tax rebates to individuals and humongous tax cuts for big business will not help workers keep their homes. Nor will they create jobs.

Why doesn’t the government declare a moratorium on layoffs to stem the growing crisis for the workers?

This is a demand that all progressive forces should make loud and clear in the streets.

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