Do not believe the hype about recovery – unemployment and inequality are persistent and growing

Previously on this blog, the current author wrote about the issue of unemployment, and how it operates as the revolving door of the capitalist system. Following on from this subject, it is necessary to examine how unemployment has not only become recurrent, but also how the sheer scale of the problem, and the longevity of unemployment periods, have increased.

An article in the Workers World newspaper entitled “Marxism and long-term unemployment” has prompted an examination the role and impact of unemployment more closely, in particular, the increase in inequality. The article above references the work of economist Heidi Shierholz of the Economic Policy Institute, in particular her article on “Is there really a shortage of skilled workers?”

This article demolishes the myth, peddled by the corporate class and their media mouthpieces, that workers are unemployed because of a skills mismatch. The capitalist-corporatist class claims that workers do not have the necessary matching skills, or a wide enough range of skills, to meet the demands of the job market.  The study conducted by Shierholz found that no matter what the skill level of the workforce, unemployment has sharply increased over the years 2007 to 2013. Quote from the Workers World story;

The unemployment rate for workers with less than high school education was 10.3 percent in 2007 and 15.9 percent in 2013. For high school graduates, the unemployment rate was 5.4 percent in 2007 and 9.6 percent in 2013. For workers with some college, the unemployment figures jumped dramatically from 4.0 percent in 2007 to 7.3 percent in 2013; for college graduates, it went up from 2.4 percent to 4.5 percent and for those with advanced degrees, it went from 1.7 percent to 3.2 percent, that is, almost double.

Courtesy of the Workers World newspaper article, we have the following chart, which demonstrates that at all levels of educational achievement, workers are experiencing high periods of unemployment:

High levels of unemployment

So no matter what the level of education achieved by the individual worker, unemployment remains high relative to 2007.

We can see the following chart from the Shierholz study;

High level of unemployment in all occupations

High unemployment is afflicting workers in all occupations, not just some selected industries. And it is not just that workers are being laid off in increasing numbers. The number of job openings is shrinking, while the number of unemployed is rising.

Shierholz, like the other economists at the Economic Policy Institute, is a Keynesian. That is not necessarily a bad thing when it comes to analysing the capitalist market, but it does mean that the fundamentals of the capitalist orthodoxy remain untouched. The extent to which the capitalist economy has recovered since 2008 can be gauged by the following observation; the ruling class has still accumulated wealth, while the rest of us are struggling with unemployment, poverty and a growing difficulty to make ends meet. It is a recovery for the rich, but recessionary conditions for the rest of the population, as Richard Escow put it in an article for Common Dreams. The majority of us have missed out on sharing the wealth from this alleged recovery, and this leads to the next point – you do not have to be a Marxist to understand that we are being fooled by the one percent into believing that we are participating in this recovery – but it helps. Those are the introductory words of an article by Professor Richard Wolff, an emeritus professor of economics at the University of Massachusetts, Amherst. While the large banking and financial corporations have recovered, indeed increased, their profits since 2008, the rest of us contend with high and persistent unemployment.

The purpose of citing the statistics above is to refute a long-standing claim of the capitalist economists; namely, that those who live a comfortable lifestyle and have ‘made it’ are the deserving recipients of wealth rewarded for their hardwork, business intelligence and financial wherewithal. In other words, the current unequal relations in the capitalist system reflect a meritocracy, where only the most diligent and conscientious are rewarded with financial success. That leads to the following conclusion, that those who are poor have only themselves to blame. Their laziness, lack of financial knowledge and apathy are the root cause of their dire financial circumstances.

Any discussion of persistent mass unemployment has to address the inequalities reproduced by the capitalist system. In the Socialist Worker online newspaper, Dylan Monahan wrote an article entitled ‘Snapshots of inequality’. In this overview, Monahan provides a compilation of observations about the growing levels of economic inequality in the United States. Responding to the claim that workers, through persistence and financial knowledge can lift themselves out of the working class and into the ruling elite – what economists grandiosely call ‘intergenerational earning elasticity’ – Monahan points out that the United States, and indeed the other European capitalist countries, has very low social mobility. In fact, it is social immobility that has become a defining feature of the capitalist system.

The snapshot of inequality provided by Monahan in his article also contains another compelling observation;

Since the 1970s, the productivity of U.S. workers has only increased while hourly compensation has remained more or less the same. This yawning gap between productivity and wages benefits the richest 1 percent, which owns 42 percent of the country’s financial wealth. The bottom 80 percent of the population, by contrast, owns barely 5 percent.

Taken together, these figures tell us that U.S. workers have worked harder and harder over decades, while gaining nothing more in wages–in fact, they have lost ground as a consequence of the Great Recession–nor in the financial wealth their labor produces.

It is not the case that the American worker has become ‘lazy’ or ‘inefficient’ and thus deserving of their impoverished status. You may find the detailed explanation that higher productivity does not result in higher wages here on the Washington Post’s economics and politics blog, hardly a bastion of pro-Communist Bolshevik propaganda.

The recovery hype serves multiple purposes – lulling the 99 percent into a false sense of security, soothing the anxieties of bourgeois economists whose careers have been built on promoting capitalist economics as the only sensible course, and reassuring those of us who are suffering that recovery is just around the corner and achievable. This has not meant that the recognition of unemployment and inequality has gone away – US President Barack Obama admits that poverty and inequality are still major issues in his speeches for public consumption. However, the explanation of the persistence of these problems is always reduced to the individual – after all, capitalism is a meritorious system, where the hardworking are justly rewarded, aren’t they?

There is another explanation about how and why unemployment persists at such high levels. This explanation was first elaborated more than one hundred years ago by a certain German philosopher and political economist. In his voluminous works about the capitalist system, he elaborated that the unemployed are a ‘reserve army of labour’, temporary workers to be used and discarded according to the imperative of profit maximisation by the capitalist class. Full employment is never the normal state of the capitalist system, notwithstanding the rhetorical commitment to such a goal by the politicians. Since the 2008 economic debacle, his analysis regarding the law of capitalist accumulation has received renewed consideration. The working class are partially replaceable by new technologies, automation and software. A portion of the workers can retrain and find some employment with the new technology, but the overall trend is to replace people with technological adaptations, robots and algorithms. Economic recoveries are increasingly jobless, with greater numbers of workers unemployed for longer periods. To understand unemployment and inequality in the capitalist system, we can do no better than by starting with the writings of the following person;

The heavyweight champion of the world
The heavyweight champion of the world



3 thoughts on “Do not believe the hype about recovery – unemployment and inequality are persistent and growing

  1. Thanks Rupen. To confirm your observations anecdotally, I have dozens of friends who are either academically qualified, or rich in experience in their field, or both, who have been out of work for prolonged periods of time, and whose only chance of re-entering the workforce is through casual or contract work.

    It seems that the system needs a permanent army of unemployed to: a) To ensure it remains an employer’s market; and b) To provide the kind of ‘flexibility’ that the market needs in terms of type and availability of labour.

  2. On a related note, a friend recently posted this article on Facebook: It’s in Danish, but a simple Google translation is enough to grasp what is being said.

    The sub-title reads: “Education alone does not create jobs and equality.” The article argues that the emphasis by development agencies on education as an empowering tool in developing countries has led to a new problem: an army of over-qualified citizens in countries that don’t have the industries to provide work for such people.

    As already mentioned, we are beginning to see the same problem in the west, too, with qualified professionals in at least some fields finding it harder and harder to find work.

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