Poverty and Unemployment in America

By John Peterson

“They’re sending $87bn to the second richest oil nation in the world but can’t
afford to feed their own here in the States.” - Dan Larkin, Unemployed

The crisis of unemployment and poverty in America continues to worsen. Despite a nominal increase in jobs in recent weeks, what is not reported is what kind of jobs are being created. Manufacturing jobs, the backbone of any economy, continued to be lost for the 37th month in a row in October. For the vast majority of Americans, the days of high quality jobs with decent wages, security, and full health and retirement benefits are a thing of the past. The effect this is having in terms of unemployment, homelessness, and even hunger right here in the US is a devastating indictment of a system which places profits before human need and suffering.    

So although the unemployment figure dropped from 6.1 percent to 6.0 percent, the real situation is being concealed by the government's "revised" method of compiling the figures. According to a report on "Understanding The Severity Of The Current Labor Slump" by Lee Price with Yulia Fungard, a number of factors must be considered in order to understand the severity of the current labor slump:

• The record length of time that jobs have failed to recover - Prior to the current slump, jobs had never fallen over a two and a half year period since monthly job numbers began in 1939. As of October 2003, payroll jobs had fallen by 2.4 million below the level of March 2001.
• The growth in the working age population since the recession began in March 2001 - Even as jobs were shrinking by 1.8 percent, the working age population (i.e., the number of people of working age) was growing by 3.4 percent. Had job growth kept up with working age population growth over that period, 6.9 million more payroll jobs would have been filled in October 2003.
• The effect of the "missing" labor market on the unemployment rate - The unusually prolonged loss of jobs has caused an unprecedented number of people to refrain from actively looking for work, and therefore to be excluded from the unemployment measurement. Had the labor force grown more in line with the population - as it has in past labor slumps - another 2.3 million people would have been in the labor force in October 2003.
• This "missing" labor force is significant because the unemployment rate would have been 7.4 percent had the 2.3 million "missing" workers been considered as unemployed.2 The 7.4 percent unemployment figure provides a better measure of current slack in the labor market than the actual unemployment rate of 6.0 percent. The 1.4 percentage-point difference reflects the people pushed to the sidelines of the labor market who can be expected to seek work again once job prospects improve. As a result, the official unemployment rate should not be expected to fall very much when the employment picture actually begins to improve.
• The loss of wage and salary income - Although real hourly wages have grown since the start of the recession, those gains have been more than offset by declines in the number of jobs and the amount of hours paid per job.
• This slump saw the longest duration of job loss - 28 months.
• This slump is the first time in which there was not a full recovery of jobs 31 months after the recession began.
• This slump is the worst in terms of the rise of the unemployment rate (after adjustment for the "missing" labor force) 31 months after the recession began - up 3.2 percentage points.
• The current slump has also been the most severe in terms of the loss of aggregate real wage and salary income 30 months after the recession began - down 1.2 percent.

According to the authors of this study, because of the extended period of job loss, the current labor slump is the most severe on record by several important measures. And this is the very best this system has to offer!

In the year 2002, 1.7 million Americans slipped below the poverty line, bringing the total to 34.6 million. That’s an astonishing one in eight of the population. Over 13 million of them are children. In fact, the US has the worst child poverty rate and the worst life expectancy of all the world’s industrialized countries, and the plight of its poor is worsening. 31 million Americans were deemed to be “food insecure” (they literally did not know where their next meal was coming from). Of those, more than nine million were categorized by the US department of agriculture as experiencing real hunger, defined by the US department of agriculture as an “uneasy or painful sensation caused by lack of food due to lack of resources to obtain food.”       

In 25 major cities the need for emergency food rose an average of 19 percent last year. The number of Americans on food stamps has risen from 17 million to 22 million since Bush took office. There are more Americans living in poverty now than there were in 1965 - what happened to “progress” and things getting better from generation to generation? What is Bush’s solution? “Faith-based” charities!         

And the Democrats are no better. Let’s not forget that it was Clinton who dismantled the system of social welfare we fought for in the 1930s and 60s. He slashed the welfare rolls from 12 to 5 million in a matter of years, and now that there are no jobs to go around, there is no safety net for millions of the most vulnerable members of American society. But the fact of the matter is, we don’t want welfare - we want quality jobs, health care, housing, and education, and we don’t mind working hard to get these things. But the capitalist system is based on the endless pursuit of profit - our interests come second to the interests of the CEOs and billionaires.

And this in the richest country in the world! So where is all the wealth workers create going? It’s no mystery - it’s all in the hands of a tiny minority of ultra-wealthy parasites who leech off our hard work, blood, sweat, and tears. There is absolutely no material reason why we can’t have full employment, free universal health care and education, and much, much more. But to get this we need to fight for it - the capitalist class and their political representatives are not going to give up their wealth, power, and privileges without a fight. This is why we need to work towards building a mass party of labor which can genuinely fight in our interests. By basing itself on the unions and the working class generally (the vast majority of American society), such a party could rapidly come to political power and fight to implement a socialist program to improve the lives of everyone. The fact that voter turnout is generally so low shows just how frustrated Americans are with the choices being offered. Nowhere does it say that we must choose between the two parties of the rich. This is not real democracy! Join the WIL in building a revolutionary alternative to the nightmare of capitalism!

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