Get a Job!

by Doug Enaa Greene of the Boston Occupier on September 11, 2012

“Get a job!”…. There’s no more common insult hurled at political protestors by hostile passersby.

Never mind for the moment that those words were just a way to ignore what the Occupy movement is protesting. That insult also reveals a fundamental ignorance about how unemployment functions in the economy and shows that the insult-hurler either has no idea how the world around them functions, or prefers to act as if he has no such idea. Since the recession of 2007-2008, millions have lost their jobs and have been tossed into poverty.  Even now, four years later, the jobs destroyed by the recession have not come back; for millions in the U.S., there are no jobs to be had.

Saying “get a job!” to the jobless means that unemployment is looked upon as just an individual rather than as a structural problem.

Unemployment is not the result of a single individual’s shortcomings or failures; rather it is a fundamental characteristic built into the very genes of capitalism and can not be remedied by calls for full employment.

I am a recent college graduate and have applied to several hundred jobs over the last several years. I have been routinely told that I am overqualified or a bad fit for a particular position. I have been forced to take a part time job that is far below my skill level which provides little benefits. My job barely pays for the necessities of life and if it weren’t for the help of my family, I’d be in dire straits. My experience is fairly typical of how the underemployed now live the “American Dream.”

For many workers, the latest recession has resulted in a steep decline of their living standards. Unemployed workers, who get new jobs are often working part time in low wage sectors such as the service industry. At the same time, young workers who are just finishing college also face reduced job prospects and lower wages. “From 2007 to 2011, the wages of young college graduates, adjusted for inflation, have declined by 4.6 percent, about $2,000 each per year,” says the New York Times.

Yet for millions, just having a job is seen as a blessing. According to the U.S. Bureau of Labor Statistics, the unemployment rate for June 2012 is at 12 million, or 8.2% of the working population. Still, this figure hides the truth about government unemployment statistics, which ignore the underemployed and those who give up looking for work. Add those numbers in and the real unemployment rate in the United States is actually nearly 15.0%.

These unemployment figures are not the result of personal failings. In order to gain an understanding of the causes of unemployment, we must look at how capitalism operates. In a capitalist economy, the main drive of business is the accumulation of profit. As a business gains more profit, they tend to grow by hiring more workers and bring in more machinery. A profitable business wants to stay profitable and this often means introducing labor-saving machinery, increased productivity and the hiring of new workers.

One method of increasing profit is for the capitalist to introduce new machines that save on labor costs.  If a new machine needs only one worker instead of ten to produce the same amount of output, then why wouldn’t the capitalist bring it in? Furthermore, say that the new machine can produce even more goods than the one it replaces: not only will the capitalist save on paying for wages, they will be able to make far more money, assuming he can sell the products produced, and at a similar price. The capitalist would be on the cutting edge, and more money would pour in. It is a win-win situation. For them, of course. However, as one capitalist introduces new machinery or new cost-cutting measures, others catch on. Soon the innovations become generalized and the advantage for that particular capitalist is wiped out.

Yet the introduction of more productive machinery doesn’t necessarily mean more unemployed. At least so long as business is booming and profits are going up. So long as this is the case, more machinery may be brought in, and with them more workers.

What we have is a contradiction: the Employment Effect (the growth of capital increases the demand for workers) occurs at the same time that machinery is replacing humanity, an action that causes the Displacement Effect (the reduction in the demand for workers).

When the Employment Effect is stronger than the Displacement Effect, the pool of the unemployed begins to dry up. This results in a shortage of labor and a rise in wages, as capitalists must compete to attract labor power on the market. If there are fewer workers to go around, businesses will have to pay more in order to attract them. Or if the businesses are unwilling, unions and other popular organs can take advantage of the tight labor market to push wages upward. For instance, capitalists may have trouble finding replacement workers, aka “scabs,” during strikes, as the surplus army of the unemployed is not available.

This contradiction of capitalism means that a business means that there is an overproduction of goods for the market since more and more workers are not able to buy them. As capitalists across the system lay off workers and replace them with machines (while also systematically deskilling and thus rendering interchangeable, cheaper, and more exploitable much of the human labor that is still required), they also tend to reduce the amount of aggregate demand for the goods that they are producing, and that they must sell to gain a profit. This leads to a stagnation in the non-financial sector, since there is no way to realize a profit. Instead, capitalists invest in the financial markets, conjuring up vast profits of trillions as if by magic by riding the waves of stocks, bonds, and derivatives.

Following the boom, comes the bust. The onset of a bust brings a drop in profits for business and a growth in the pool of the unemployed. The crisis is an excuse and an opportunity for capitalists to slash wages and to roll back other gains of the working class. For instance, General Motors was on the verge of bankruptcy in 2008 and bailed out by the federal government. At the end of 2011, General Motors was making profits of over seven billion dollars. At the same time, the United Autoworkers (UAW) were told by the company that the time had come for a “shared sacrifice.” The UAW had won generous health and retirement packages for workers through decades of long struggle. After the bailout, new hires at General Motors can now expect to make $16 an hour, about half of what workers used to make.

There are millions of workers who don’t have half a wage to rely upon though. They have only the unemployed benefits that the government gives them. These workers need these benefits to pay for goods and services such as food, rent, and bills. Clearly, the purchasing of necessities also helps workers who are still employed in those sectors. The existence of unemployment benefits are also victories of past struggles such as the union drives in the 1930s to ensure that working people were ensured a minimum standard of living and fairness and would not be subject to the savage whims of the market.

Unemployment is not the result of a single individual’s shortcomings or failures; rather it is a fundamental characteristic built into the very genes of capitalism and can not be remedied by calls for full employment.

Now many political leaders such as Paul Ryan claim that benefits for the unemployed need to be cut because “we can’t afford it.” Yet these same political leaders, both Democrats and Republicans, who would let the unemployed suffer, have also supported tax cuts for the wealthy and bailouts in the tune of hundreds of billions of dollars for companies like Bank of America and Goldman Sachs. In reality, they attack unemployment benefits in order to discipline the working class by rolling back past victories and forcing workers into accepting lower wages and further cuts in benefits.

Still if unemployment is actually good for business, where does that leave various well-meaning calls for “jobs for all?” Unfortunately, the hope of achieving full employment under capitalism is a pipe dream. Unemployment is a permanent feature of capitalism in both good times and bad. Full employment would alleviate the threat of workers of being without a job. They could demand greater wages and benefits, possibly cutting into the profits of business. Thus putting into place full employment, could potentially threaten the very profit-making logic of capitalism.

So what is to be done? The latest recession shows that unemployment is not some kind of personal failing for the millions of jobless. Unemployment is an ingrained feature of capitalism that is essential to the accumulation process when times are good and is a method of disciplining workers and rolling back benefits during a recession. What we need to do is think not about providing jobs for all under a system with a destructive addiction for profits. We need to think about getting rid of capitalism and building a new one that puts human needs first and guarantees meaningful jobs for all.

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