Unemployment is capitalism’s revolving door

The online political magazine Counterpunch published an article by Geoffrey McDonald entitled “The Revolving Door of Unemployment”. McDonald examined the concerns expressed by American business magnates, along with US president Barack Obama, about the plight of the unemployed. They all agreed that unemployment currently exists, and that something must be done about it. Many of the corporate leaders that are feigning concern about the high level of unemployment are responsible for policies that create and worsen it. The Obama administration, driven by the ideological imperative to increase corporate profits, has certainly succeeded in driving up private profits, but has also created the conditions for mass and long-term unemployment. Not only has long-term structural unemployment become a major feature of capitalist society, but also job insecurity and low pay for those that find work.

McDonald uses the metaphor of a revolving door in describing unemployment – it is an accurate characterisation. While millions of unemployed have the capacity to work, they are separated from the means and resources to utilise that capacity. Every person has the theoretically legal right of equal opportunity to search and apply for work. Every person can enhance or improve their education, skill set, and job-seeking techniques to land a job. That is all well and good in an abstract sense, but in the real world of the capitalist market, there is one problem – equal opportunity will not reduce the unemployment rate and will not produce a reduction of poverty.

The decisions taken by the financial oligarchy, the tiny minority that owns the productive facilities, natural resources and economic levers that operate the economy, make decisions that affect the lives of the overwhelming majority of the population, the ninety-nine percent of us. For the majority of the world’s people, unemployment is a revolving door, an experience that will happen at some point in our lives. The days of job security are finished. Employment is now temporary, casualised to the point where most of us are temporary economic citizens.

Back in July 2013, the Huffington Post published a story that explained just how widespread the unemployment epidemic really is; four out of five American adults will struggle with unemployment at some point in their working lives, become reliant on welfare payments, and find their economic circumstances deteriorating. The United States now has 46.2 million people unemployed, a record statistic. That means fifteen percent of the population is out of work, idle labour power capacity that remains underutilised. The economic data gathered by the authors of the Huffington Post article also elaborate that the risk of poverty is increasing, and in 2011, 12.6 percent of working age adults (between the ages of 25 and 60) lived in poverty.

This feature of the capitalist system – mass, structural unemployment – is not only an indication that the numbers of full time, secure positions are decreasing. It also indicates, as McDonald points out in his Counterpunch article, that less people are doing more of the work. The increase in production and creation of more products means that the currently employed, shrunken workforce is remarkably efficient at keeping up the production process, so that output has barely slackened. As McDonald explains:

More and more products are generated with fewer and fewer people. Millions are not needed because the workers who are still needed are so productive that everything the employers want to have produced at a profit has already been produced. In other words: people are unemployed, made “redundant,” because of abundance.  The means to produce wealth have become so highly developed that society needs less and less workers. In any other social system, this would be a reason to rejoice. This would mean less toil, effort, and unfree time, and more leisure and fun. Not in the market economy, the “best of all economic systems.” Productivity advances throw millions of people into destitution.

The human face of the unemployment crisis was brought home by an article in the New York Slimes, the lapdog of the US financial-military elite. In a rare display of concern for those who are underprivileged, the New York Slimes examined the downward slide of a previously employed professional in an article entitled “Caught in a Revolving Door of Unemployment”. The news report detailed the life of Jenner Barrington-Ward, an urban professional who has undergone a personal crisis brought on by long-term unemployment:

A five-year spell of unemployment has slowly scrubbed away nearly every vestige of Ms. Barrington-Ward’s middle-class life. She is a 53-year-old college graduate who worked steadily for three decades. She is now broke and homeless.

Ms. Barrington-Ward describes it as “my journey through hell.” She was laid off from an administrative position at the Massachusetts Institute of Technology in 2008; she had earned about $50,000 that year. With the recession spurring employers to dump hundreds of thousands of workers a month and the unemployment rate climbing to the double digits, she found that no matter the number of résumés she sent out — she stopped counting in the thousands — she could not find work.

She applied herself to the new circumstances, retrained herself, took courses, expanded her skill set and applied for hundreds of jobs- all to no avail. She has been refused work for various reasons, being told by potential employers that she cannot work at fast food outlets because she was ‘too articulate’, could not clean toilets because she did not speak Spanish, and was refused work at a laundromat because she was ‘too pretty.’ At one point, she was told by a prospective employer ‘We don’t hire the unemployed.’ 

With longer-term joblessness comes the concomitant problems of poorer health, increased likelihood and incidence of depression, higher risk of suicide, and strained family relations. Chronically occurring unemployment is also undermining another long-lasting myth about capitalist society, especially its American variant – that hard work and dedication will earn a working class person a seat in the ‘middle class’. Upward social mobility has been promoted, particularly among migrants, to attract and maintain labour for all sorts of industries by the ruling class. Well, that myth is now experiencing a serious decline. Gary Lapon, writing in the Socialist Worker magazine in August 2013, states that the vast majority of working people in the United States will experience unemployment and its associated impoverishment at some point in their working lives.

Long terms of unemployment have deleterious consequences on a person’s mental health, increasing the chances of depression, anxiety and stress-related disorders. Overcoming and managing these harmful impacts can take months, even years. Lapon references a study done by researchers from the University of Nevada, Las Vegas, who examined the impact of unemployment duration on health care services and mental health. The study was published in the International Scholarly Research Network in 2012. The researchers looked at the consequences for mental health of participants who had been involuntarily unemployed for more than twelve months. They found the long-term unemployed have higher levels of impaired mental health, are less likely to access health services because of prohibitive costs, and experienced higher levels of chronic diseases, such as hypertension, cardiovascular disease and musculoskeletal disorders.

What should be noted is that while greater numbers of working people are experiencing poverty, and more people are likely to be impacted by periods of unemployment, the financial elite has continued to amass huge fortunes, with an enormous transfer of wealth from the working class to the ultra-rich one percent. According to Business Insider Australia, corporate profits have reached an all-time high, and wages have descended to a record low, in terms of the share of each of the gross domestic product (GDP). Companies are actually paying less to their employees as a share of GDP. Combine that with the fact that fewer people are working today than at any time during the last three decades, one can see that the Business Insider article provides a snapshot of just exactly who is benefiting from the current crisis of the capitalist system. It is not just in the United States that the unemployment situation is worsening; figures released by the Australian Bureau of Statistics (February 2014) demonstrated that unemployment has hit a record high in ten years. An economist with Moody’s Analytics stated that “There’s no spinning it, Australia’s labour market is weak…. Businesses are not confident in future economic conditions so are trimming jobs and working their existing staff harder.” There is a breakdown of the current unemployment rate state-by-state provided by the Australian Broadcasting Corporation here: let us look forward to more intelligent criticism of the ABC from current Australian Prime Minister, Tony Abbott, in light of these worsening economic conditions.

Moving across to Europe, the economic crisis is going from bad to worse, with austerity measures only adding to the pauperisation and immiseration of millions of people across the continent. Russia Today published a summary of the findings of the International Federation of the Red Cross and Red Crescent societies in October 2013. The report, entitled “Think Differently: Humanitarian impacts of the economic crisis in Europe” details the social and humanitarian disaster that has overtaken huge areas of European countries, with snowballing poverty and unemployment. While greater numbers of people are requesting aid from charities, the poor are getting poorer, unemployment has risen sharply, and there is an increase in xenophobia and anti-immigrant politics in Europe. Grown-up children are increasingly reliant on their parents and families for income support, and generations are living together just to pay the bills.

The study drew economic data from the European Union countries, as well as countries in Eastern Europe, Central Asia and the Balkans. Take note of the Balkans, because we shall return to a particular country that area later in the article.

The full report can be downloaded from the web site of the Red Cross here.

It is not just the economic impact of unemployment that is taking its toll; the deleterious psychological consequences are manifesting themselves as well. It is not just that lack of procuring the basic necessities and energy that undermines physical and mental health, but also:

National Red Cross and Red Crescent Societies report an increased need for psychosocial support to people suffering from depression and other mental health problems, according to the report. A prime example of the ongoing mental anguish suffered by those thrown into poverty has been apparent in Greece over the past three years.

“Suicide rates in Greece have grown drastically by as much as 40 percent between January and May 2011, compared to the same period in 2010, a 50-year high,” the report notes.

Earlier in the article, the current author made reference to the Balkans, a region suffering heavily from the scourge of unemployment and poverty. It is important to return to this area, because over the month of February 2014, we can see the reaction of people that are frustrated and exasperated at the ongoing chronic crisis. They have taken action to redress the imbalance of an economic system that condemns them to live in poverty and despair. The people of Bosnia, living in a state of economic and ethnic apartheid since 1995 with the Dayton accords, have risen up in protest against the mass unemployment, privatisation of industries, the job insecurity and lack of accountability in the political institutions. The uprising has taken place in the main industrial centres of the country, led by ordinary working class people, in an attempt to wrest back control of their lives.

In an extensive analysis of the Bosnian uprising, Michael Karadjis, socialist activist and academic with Green Left Weekly, published an article in the Links online magazine detailing the historical background and context of the Bosnian situation. Since early February 2014, Bosnian workers – yes, the ‘Muslims’ of Yugoslavia, frequently derided in the corporate press – have risen to take back control of the factories, resources and political direction of their statelet. Bosnia was reduced to a statelet status back in 1995 with the signing of the US-brokered Dayton accords, which basically solidified the nationalist-driven ethnic division of Bosnia in cantons, with the Serbs carving out one portion, the Croats gaining control of another, and the Bosnians left to live in squalor in their own, reduced rump statelet at the mercy of the European Union-appointed governors. The nationalist poison had taken its toll, and the US and European powers simply entrenched an apartheid-style system, rewarding the ethnically cleansing activities of the protagonists – with the Bosnian Muslims the ultimate losers.

The uprising is driven mainly by the Bosnian working class, because they have been the ones severely impacted by mass privatisation, unemployment and poverty. With Yugoslavia fragmented by competing national chauvinisms in the 1990s, the Bosnian Muslims have studiously avoided the nationalist contagion, articulating demands such as the following, quoted by Karadjis in his article:

  • Recognise the seniority and secure health insurance of the workers.
  • Process instances of economic crimes and all those involved in it
  • Confiscate illegally obtained property
  • Annul the privatisation agreements
  • Prepare a revision of the privatisation
  • Return the factories to the workers and put everything under the control of the public government in order to protect the public interest, and to start production in those factories where it is possible

It is not the purpose of this article to go into a detailed analysis of the Bosnian context, but suffice it to say that Central and South Eastern Europe experienced the worst rates of unemployment in Europe since the onset of the economic crisis. Detaching Bosnia, and the other former Yugoslav republics, from the Eastern bloc has involved turning them into captive labour markets for the European Union. Integration for Bosnia has meant becoming a semi-colonial appendage of the richer European powers, its resources pillaged in the course of mass privatisation, while the Bosnians were left unemployed. Michael Karadjis notes that Bosnia’s unemployment stands at an overall 40 percent, with youth unemployment reaching 57 percent. Breaking with this program of capitalist austerity is absolutely necessary to resolve the ongoing problem of unemployment and social inequity.

To understand the issue of unemployment, it is necessary to understand the role it plays in the functioning of the capitalist system. Graham Matthews, writer and activist for Green Left Weekly, elaborated on the connection between capitalism and unemployment in an article published in 2009. He referred to the work of a nineteenth century German philosopher and political economist, whose work is making a comeback given the current capitalist downturn. As the capitalist corporations, driven by the imperative to make profits, drive down production costs and increase labour productivity, routinely replace their variable capital – workers and their active labour – with fixed capital, in the form of greater mechanisation and technology. While it is true that new technologies help to drive new industries, workers are displaced from one industry, downsized from their occupations, and labour costs are driven down. Generating a greater amount of labour productivity from fewer and fewer workers is the general goal of corporate power. Workers are continually used and then discarded on an ‘as-needs’ basis. As Matthews explained in his article:

Although it may rise or fall, unemployment itself is a permanent feature of capitalism.

“The greater the social wealth … and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army [i.e. the unemployed]”, Marx said. “The relative mass of the industrial reserve army increases therefore with the potential energy of wealth.”

The unemployed are more than just a permanent “reserve army of labour” on which capital may call, however. They also serve capital by placing a permanent pressure on the wages of those who are employed, encouraging them to work harder for less, at pain of losing their job to someone else.

Viewing the unemployed as a reserve army of labour, temporary citizens if you will, provides an insightful platform for comprehending unemployment as a permanent, structural feature of the capitalist system. While politicians make decisions and implement specific policies that are conducive to creating unemployment, and should be held responsible for the staggering numbers of unemployed that we see today, it should be noted that unemployment is here to stay regardless of specific policy decisions by the political class. Ismael Hossein-Zadeh, professor emeritus of economics at Drake University, Iowa, makes the important point in his 2011 article in Counterpunch that only by mass mobilisations from below, with workers joining together and rising as one, can the nation-wide program of misery and unemployment be reversed. Obscene levels of corporate profits have been made at the expense of ordinary working people, transferring the burden of the economic crisis onto the shoulders of those who are not responsible for creating this economic mess. Only by combining their efforts, rather than begging at the table, can workers achieve an equitable system where the permanent revolving door of unemployment can finally be closed.


4 thoughts on “Unemployment is capitalism’s revolving door

  1. Thanks for this well-researched article, Rupen. We are so ‘used to’ the idea that there will always be unemployment that it no longer phases us. But it’s not just the unemployment figures that have increased – it’s also the massive casualisation of the workforce.

    Just one minor point: The figure of “fifteen percent of the population” being “out of work” doesn’t make sense, as it would include the non-working age groups. But perhaps I’m wrong.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s