Unemployment, suffering and revolt spawned by recession

As the Great Recession--already the longest downturn since World War II--soon enters its third year, U.S. workers are facing rapidly changing circumstances, few of them for the good. With the hemorrhaging of jobs, unemployment has resulted in families losing homes due to vanishing income and increasing home foreclosures.

The recent budget deal struck in California has exposed millions of youth to an eroding educational system, and left the entire population on their own to survive.

This may represent a new stage of capitalist crisis and demand new ways to understand and overcome it. Equally important, some attention has also been directed to the question of what will happen after--and not only after the Great Recession in terms of the new economic and social landscape that may emerge.

The current crisis has unfolded as the domination of things over people. Millions of Americans are living and perceiving it as a crisis of capitalism and capitalism as the essence of an increasingly dehumanized society that needs to be overcome.

While several economic reports had indicated that the worst of the Great Recession, begun in fall 2007, may have passed, the June 2009 U.S. Department of Labor unemployment report threw cold water in the faces of many pundits and policy-makers in the Obama Administration. Some had recently spoken optimistically of the appearance of economic "green shoots." Over the prior three months or so, investors had driven the stock market up 30% from the end of 2008 lows. Many of the business reports that had stoked the misplaced optimism came from major banks--which had recently taken huge cash infusions from TARP, the Troubled Assets Relief Program, to head off a possible complete collapse of the capitalist economy. Increased profits at non-financial companies are the result of cost-cutting measures, such as layoffs, rather than expansion or increased output.

Recently, several large banks, Goldman Sachs, J.P. Morgan, American Express, and Morgan Stanley--eager to escape federal limits on compensation for top executives--declared themselves healthy enough to exit TARP and were granted permission by the Obama administration. Yet, as Eric Dash noted June 10 in The New York Times:

"...after banks return the TARP money, the administration will forfeit much of its leverage over them. With that loss goes a rare opportunity to overhaul the industry."

While May had marked the fourth consecutive decline in the rate of monthly job losses, in June such losses rebounded to 467,000 from May's 345,000. The U.S. unemployment rate hit 9.5%, a 26-year high. More telling, the average work week fell to 33 hours per week, the lowest since records began in 1964.

Other bad news includes an increase in the number of long-term unemployed, to 4.4 million, also an all-time high. If laid-off workers not counted as looking for employment or those who have settled for part-time work are counted, the unemployment rate for June was 16.5%. In the July report nearly 250,000 more jobs disappeared; the unemployment rate dipped slightly to 9.4%, only because 422,000 more people were no longer counted in the workforce. Since late 2007, 6.7 million jobs have been lost, 5% of the total, the worst decline since the Great Depression.

The full impact of the Great Recession on Black and Latino workers has yet to be acknowledged. In the last year, official unemployment among Blacks increased from 8.9% to 13.6% compared to the increase for whites from 4.8% to 8.2%.

HOUSING MARKET COLLAPSE

If job losses are the core of the current economic crisis, more visible has been the housing market collapse. Only the logic of the capital/labor relation can explain the apparently irrational actions of capital and the state in the housing markets. The Obama administration's major program, "Making Home Affordable," aimed at stemming foreclosures. Beginning in April, home mortgage servicers signed on to the program, wherein they received a $1,000 fee for each loan they modified. But figures for April, May and June showed a decline in modifications. Analysis of 3.5 million subprime loans, written in 2005-2007 by the biggest banks, showed that 2009 modifications peaked in February and then declined in all but one month since.

In June $45 million was lost in write-downs of principal, interest, or fees; $4.5 billion was lost in foreclosures. Alan M. White, who analyzed this data, said: "There is 100 times as much money lost in foreclosure sales as there was in writing down balances in modifications--this is not rational economic behavior" (Gretchen Morgenson, "So Many Foreclosures, So Little Logic," 7/5/09 The New York Times). The conclusion is that large banks have no confidence in the ability of U.S. workers to make their house payments, and have more confidence that the same workers will--as taxpayers--bail the banks out for the losses that continue to fester and accumulate on their books.

Capitalists remain confident that the socially produced wealth will continue to be transferred at an accelerating rate to those Marx called "the trustees of bourgeois society." This transfer of wealth will continue to involve even the unemployed workers, through house foreclosures and loss of equity.

MARX'S THEORY: LABOR TURNS INTO OBJECT

Marx worked out his theory of capitalist society, not only the exploitation of workers for the material and intellectual advantages of the non-workers, but the actual transformation of labor into an object, which served as the foundation for the predominance of things over people.

Under the logic of capitalism people exist to serve things, not things to serve human interests. In this sense, with capitalist social relations, the logic has been impeccable--"real estate," as a commodity, is a mere form of appearance of capital, the bankers and state functionaries its "personifications."

Given these conditions, the achievements of the workers and supporters at Stella D'Oro factory in the Bronx reveal workers' determination to fight back, using whatever resources they have (see Year-long Stella D'Oro strike solidarity). Mike Filippo, who spent 11 months on the picket lines while participating in myriad community forums and protests, said:

"It was tough--for many going from $700-$800 a week in wages to the $400 in unemployment benefits. Even the unemployment benefits were the result of a fight. We were the first group of workers to claim benefits on the grounds that the company had hired temporary replacement workers. A lot of us would have lost our homes--there are married couples that have been working here for as long as 30 or so years. We made sure everyone knew how to use every protection--including programs for mortgage payment reductions to avoid foreclosure--but even these don't work forever."

HEALTHCARE WORKERS ATTACKED

While the Obama Administration, and many activists, prepare for the "final battle" over health insurance reform, healthcare workers may be preparing to pay a high price in deteriorating working conditions, unemployment, and cuts in pay and benefits. For instance, a July 20 "settlement" between 1199 East, affiliated with Service Employees International Union (SEIU), and the League of Voluntary Hospitals and Homes of New York nullifies a 3% raise due this year and part of another raise in 2010.

Even though healthcare is one sector that is expected to expand, so are the attacks on healthcare workers. After more than a decade of protracted struggles for quality care in organized campaigns and in persistent everyday fights over staffing levels, healthcare workers at Kaiser HMO on the West Coast are being hit with rumors of forced reductions in the face of the new economic climate and projected cuts due to healthcare "reform." In the healthcare workplace the dominance of capital over living labor is reflected in the shift in the healthcare debate from one of providing universal care to starving that sector of resources in order to meet the needs of capital. (See Workshop Talks: Dollars outshout healthcare workers.)

On July 24 the federal minimum hourly wage was increased to $7.25--about $15,000 a year. A recent report from the U.S. Department of Labor, "Tomorrow's Jobs," indicates that half of the ten occupations expected to add the most jobs through 2016, e.g., retail sales positions and home health aides, will be "very low paying," a maximum of $22,000 a year. Three more of the highest growth occupations are to be "low-paying," up to only $31,000 a year.

WHAT HAPPENS AFTER RECESSION?

Everything points to a "jobless recovery" like no other. Workers are experiencing soaring unemployment, reduced hours, and forced part-time jobs. These represent involuntary "free time," the result of what Marx called "value production"--in which the self-development of people and material well-being are nothing but its by-product. These kinds of increases in free time are all about restoring, preserving, and perpetuating the capitalist mode of production. The worst thing we can do, however, is to stop there, and fail to follow the logic of capital to its conclusion, to Marx's look ahead to post-capitalist society:

"It is one of the civilizing aspects of capital that it extorts…surplus labor in a manner [as surplus value] and in conditions that are more advantageous to social relations and to the creation of elements for a new and higher formation than was the case under the earlier forms of slavery, serfdom, etc. Thus on the one hand it leads towards a stage at which compulsion and the monopolization of social development (with its material and intellectual advantages) by one section of society at the expense of another disappears; on the other hand it creates the material means and the nucleus for relations that permit this surplus labor to be combined, in a higher form of society, with a greater reduction of the overall time devoted to material labor… The true realm of freedom, the development of human powers as an end in itself, begins beyond it [labor in material production, realm of necessity], though it can only flourish with this realm of necessity as its basis. The reduction of the working day is the basic prerequisite" (Marx, Capital, Vol. III, pp. 958-959).

The post-capitalist dialectic of the "realm of necessity" as the basis for the realm of freedom that Marx describes is intrinsic to the social revolution in which, "the individual [becomes] a social individual with a new mass-power-form in cooperative labor so that [the workers' plan], as contrasted to the despotic plan of capitalism, meant the accomplishment of a task 'with the least expenditure of energy and under conditions most adequate to their human nature and most worthy of it'" (Dunayevskaya, The Marxist-Humanist Theory of State-Capitalism, p. 96). Clearly this dialectic of time for human self-development and free time is the total opposite of the reduction of time in production we see in capitalism's direction now in the miseries of deteriorating working conditions and ever-increasing unemployment.

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