by Jon Bekken, ASR 57
We are, or so the boss press insists, in the midst of an economic “recovery” that began in July 2009, ending the 19-month American recession. Unemployment rates are now down to “just” 8.5 percent (a figure that does not include millions who have given up looking for work, or been forced to settle for part-time jobs). At current rates of job growth, we’ll all be back to work in another 15 years or so.
When hard times hit, the bosses always demand that working people bear the costs of economic policies we had no hand in shaping. Nothing is different this time around. Our pensions have been gutted (for those lucky enough to still have them), average pay fell an inflation-adjusted 3.2 percent during the recession, and millions of our fellow workers paid for the bosses’ looting and speculation with their jobs. (And we continue to pay with our jobs; the government says it now takes a laid-off worker about 41 weeks to find a new job, and they count everyone who lands even a few hours a week in part-time work as back on the job. Those who do find a new job earn a lot less than they did at their old one — 17.5 percent less, on average.)
But now that we’ve been recovering for more than two years, times are even tougher. The stock market might be rebounding, profits are certainly up, lobbyists are doing well, and economic pundits get plenty of airtime telling us how great things could be if we would just give the rich a bit of a boost… It seems things are going pretty well for everyone except those of us who have to work for a living. A recent report by two former Census Bureau officials looked at government wage surveys, and found that median household income has fallen by another 6.7 percent since the recovery began. So the average working-class family is now 9.8 percent worse off “today” (actually June; the latest month for which data was available, so it will be much worse now), after inflation, than we were four years ago.
Starving amidst plenty
The number of Americans officially living in poverty has grown by nearly 10 million since 2006, to more than 15 percent of the population (it’s more than 22 percent for children). In November new poverty figures came out showing that huge swathes of the country are dominated by extreme poverty, areas that often lack access to decent food, schools or jobs.
The official poverty definition used by U.S. statisticians was developed a long time ago, reflecting an age when we spent far less on health care (largely because it wasn’t available to most people) and such. Every serious study done since has found that it seriously understates the misery that pervades our society. So the Obama administration has come up with a simple way to reduce poverty: they’re looking to redefine poverty, in part by counting food stamps and other support programs as income. This alternate measure would cut the growth in poverty in half, even if it doesn’t do anything to put food on anyone’s table.
Official measures are regularly revised, of course. The government has changed the way it calculates inflation 20 times since 1980. The net result? Inflation is currently reported at just over 3 percent a year; it would be more than 10 percent without the “improvements.” (The truth probably lies somewhere in between.) So if it seems to you that your costs are rising higher than the statisticians report, you’re probably right.
The 1 percent, and the rest of us
The median represents the middle of the income spread. Half earn more, half less. The top third or so seem to be doing OK under this recovery, even if the bosses want deeper tax cuts to motivate them to do more looting so that they can get the economy back into full speculation gear. But the “bottom” two-thirds get poorer and poorer the “better” the economy is doing.
Of course, the pain is not evenly distributed. Some folks are so very poor that it isn’t possible to slash their income very much. Those pesky minimum wage laws the rich keep pointing out stand in the way of more jobs (if we worked for free, there’d be jobs for all!) prevented wages from being cut as much as the bosses would have wished, even if off-the-book work, productivity gains, unpaid overtime and the like helped ease the bosses’ pain. But otherwise, incomes fell more for those who earned less, for those who live in families (and so have children to support), and for African-American and Hispanic workers, who were already being paid much less. Between 1990 and 2007, hourly wages fell by 8.6 percent in New York City (and they’re still falling), with workers taking on extra jobs or going into debt to keep afloat.
The economy is skewed to send wealth upwards. From 1989 to 2009, median household income rose 2 percent; inflation-adjusted GDP was up 63 percent over the same period. If that increased wealth was spread about equally, the average household would have received about 20 times as much income as it did.
Income inequality has now reached points not seen since the onset of the Great Depression. Income for the top hundredth of one percent (the 12,000 richest U.S. households, whose income averages $35 million a year) rose by 215 percent since 1980. The bottom 40 percent lost ground.
The harder you work, the less you make. That’s always been true under capitalism. And the less you make, the more will be stolen from you when the bosses are looking to get their bonuses and stock options back in shape. Unless, of course, we organize to defend ourselves, and to dump the bosses off our backs. (Even today, union workers earn higher pay and less-meager benefits. That’s why the bosses are so intent on busting unions.)
Things weren’t so great even in the boom times before the recession, of course. The New York Times reports that inflation-adjusted income from January 2000 until June 2011 rose slightly at the start of the period, but since then income has been gradually going down, down, down. Back in the Clinton “boom” times, real (inflation-adjusted) wages for the bottom 40 percent were falling year by year, even as productivity increased and working hours gradually crept back to 1920s levels.
It’s not us, it’s the system
Pundits and politicians are fond of claiming that unemployment is caused not by our economic system, but rather by the inadequacy of individual workers. Indeed, some would have you pity the poor bosses eager to put people to work but unable to find “qualified” wage slaves. It’s hard to believe that even pro-capitalist economists are stupid enough to really believe this twaddle.
The unemployment rate is significantly lower for folks with college degrees – running about 4%. But that rate masks huge numbers of people who enrolled in graduate school rather than look for jobs in this dismal economy, and even more who were forced to take jobs for which their degrees are entirely irrelevant, thereby displacing other job seekers every bit as qualified to do the work. The job categories that are growing fastest typically require no more than a high school degree. The Labor Department predicts that two-thirds of jobs in 2016 will not require more than a high school degree, but nearly two-thirds of American workers already have at least some college. So, if anything, we’re too educated for the jobs out there. Nor is there any evidence that experienced workers are doing much better in the current job market. This babbling about skills seems to be designed to allow the bosses to import lower-paid workers from abroad, and to force government to pick up the costs of training for specific job needs.
Meanwhile, many college graduates find themselves carrying huge student loans, averaging more than $25,000 (debts of $80,000 or more are quite common at private colleges, and student loans can not be discharged in bankruptcy) as a result of massive cuts to financial aid programs. A recent article in the American Association of University Professors’ magazine compared the situation to indentured servitude. These heavily indebted workers are forced to take jobs on almost any terms the bosses offer, and many have joined the Occupy movement.
Victims of the “free” market
Across Europe, a better-organized working class is waging at least symbolic strikes and other protests against the bosses’ austerity schemes. As we go to press, European Union leaders meeting in Belgium have been hit by a massive one-day strike.
The attack is brutal almost beyond belief. The New York Times business pages suggest that “Greece may require living standards to decline by as much as 40 percent to become competitive.” This can’t be done through the political process, columnist Martin Hutchinson says, because Greek workers would never accept it. But “free markets” can do the dirty work if people just get out of the way. The resulting collapse in living standards would enable other European governments to impose the necessary “reforms.”
This is indeed the way “free markets” work, if we leave the bosses free to do as they choose. If workers want to hold onto what little we have, let alone make any progress, we will have to organize to accomplish the task.