THE JOBS CRISIS AND SOCIALIST POLICIES

THE JOBS CRISIS AND SOCIALIST POLICIES

Unemployment figures from the US Department of Labor shattered the months-long propaganda campaign by the government and the media claiming that the US is in the midst of an economic recovery. This campaign is based on equating the rise in corporate profits and stock prices with “recovery,” while downplaying long-term mass unemployment and the social disaster it is creating.

Friday’s jobs report demonstrates both the inability of American capitalism to create jobs for millions of workers and the refusal of the Obama administration to make any genuine effort to offset the impact of the economic crisis on working people.

While May saw a net increase of 431,000 jobs, 411,000 represent hiring by the federal government to provide temporary help in conducting the 2010 Census. The Bureau of the Census is expected to scale back hiring from now on, and these temporary jobs will be largely gone by the end of summer.

Job creation in the private sector was only 41,000, while state and local governments, hit by an intensifying budget crisis, cut 22,000 jobs. The number of workers considered long-term unemployed—out of work for 27 weeks or more—rose to the highest level since the Labor Department began keeping such records in the 1940s.

President Obama tried to cover up the obvious meaning of the jobs report with rhetorical flimflam, claiming Friday that the numbers showed the US economy was “getting stronger by the day” and that “we are moving in the right direction.” Professional economists and media commentators, however, treated the report as a sharp warning of a “double-dip” recession, and the New York Stock Exchange plunged, with the Dow Jones Industrial Average falling 323 points to finish below the 10,000 mark.

The Washington Post declared bluntly, “The new data confounded expectations, spurred by the April report, that the job market might finally be taking off and many of the nation’s 15 million unemployed people could soon get back to work. Forecasters had been encouraged by gains in economic indicators—including business surveys, retail sales reports and measures of industrial output—and expected to see accelerating job growth as well. They were wrong.”

The anemic level of private-sector hiring is not merely an “aspect” of the economic crisis, but its essential feature. According to the Labor Department, there were 8 million fewer workers on private payrolls in May 2010 than when the recession began in December 2007.

The private sector employs roughly the same number of American workers today as in 2001. In other words, net job creation by the private sector, the supposed engine of economic progress according to both the Democrats and the Republicans, has been zero for a full decade—the entire period during which first George W. Bush and then Barack Obama occupied the White House.

A separate report, published late last month by the newspaper USA Today, found that private-sector pay had shrunk to the smallest share of personal income in American history during the first quarter of 2010. Private-sector wages represented only 41.9 percent of total US personal income, down from 44.6 percent when the recession began in December 2007. This decline in wages was partly offset by an increase in government benefits, which rose from 14.2 percent of total income to 17.9 percent over the same period.