People are out of work longer and the jobs that become available pay less. These developments of the past several years of economic downturn are not your imagination, no matter how many times individualist ideology is invoked to falsely point fingers at the “downsized.”
A flurry of studies and papers demonstrate these patterns are found across the mature capitalist economies. The latest of these, “The Low-Wage Recovery” issued by the National Employment Law Project, found that nearly half of the jobs created in the United States since unemployment peaked in February 2010 are low-wage jobs.
Two million more low-wage jobs, defined as those paying $13.33 per hour or less, have been created in the past four years than were lost between January 2008 and February 2010. By contrast, the deficit in jobs paying more is about two million. Although the number of jobs in the U.S. has rebounded to what it was at the end of 2007, that means more people are unemployed since the population has grown. The Employment Project’s breakdown:
• Lower-wage industries ($9.48 per hour to $13.33) constituted 22 percent of the 2008-2010 losses, but 44 percent of jobs gained since then.
• Mid-wage industries ($13.73 to $20.00) constituted 37 percent of the 2008-2010 losses, but 26 percent of jobs gained since then.
• Higher-wage industries ($20.03 to $32.62) constituted 41 percent of the 2008-2010 losses, but 30 percent of jobs gained since then.
The National Employment Law Project notes that:
“Job growth is still heavily concentrated in lower-wage industries. As a result of unbalanced employment growth, the types of jobs available to unemployed workers, new labor market entrants, and individuals looking to move up the career ladder are distinctly different today than they were prior to the recession.”
More people are out of work for longer periods
At the same time, the Economic Policy Institute reports, the number of long-term unemployed in the United States has risen sharply. This is true for all age, education, occupation, industry, gender, and racial and ethnic groups. The author of the EPI report, Heidi Shierholz, wrote:
“Today’s long-term unemployment crisis is not at all confined to unlucky or inflexible workers who happen to be looking for work in specific occupations or industries where jobs aren’t available. Long-term unemployment is elevated in every group, in every occupation, in every industry, at all levels of education.”
The overall rate of those who were unemployed for six months or longer in 2013 was 3.4 times the rate in 2007. There is little variation in this ratio based on educational attainment. In fact, the two categories of “some college” and holders of four-year college degrees showed the highest increases in long-term unemployment. That pattern has been persistent, rendering nonsense the frequent claims of right-wing economists and those intellectually dependent on them that higher or longer-term unemployment is a result of a supposed “mismatch” between worker skills and job requirements.
The picture is not different when we look at other countries. In Canada, the number of people who have been unemployed for 27 to 51 weeks, although down from its peak, is nonetheless close to double what it was in 2008. The number of Canadians who today have been out of work for at least one year is more than double those in the same position in 2008.
In the European Union, where total unemployment has barely declined from its 2013 peak, the number of long-term unemployed has yet to retreat. The long-term unemployment rate, defined by the European Commission as those out of work 12 months or longer, was about two-thirds higher in the third quarter of 2013 than it was in the first quarter of 2009. (The third quarter of 2013 is the latest for which figures are available.) The commission reports that:
“[O]ver the last five years, full-time employment has decreased dramatically — by 9.8 million (–5.4%). On the other hand, at EU aggregate level, the number of employees working part-time has grown by 1.2% (or 480,000 part-timers) in the year to 2013 Q3. There has been steady growth in this type of work in recent years, with 2.9 million more part-time jobs since the third quarter of 2008, a rise of 7.8%. Consequently, the share of part-time workers (of total EU employees) has risen consistently in recent years, reaching 19.3% in the third quarter of 2013.”
Less work, and less of it for those who do have it. The E.U.’s unemployment rate of 10.8 percent climbs to almost 20 percent when the underemployed and discouraged are added to the officially unemployed.
So it is elsewhere. The percentage of Australians unemployed for more than 52 weeks constituted 21 percent of the country’s unemployed in February 2014, in comparison to 13 percent in February 2009. Similarly, New Zealand’s long-term unemployed have more than doubled since 2009.
The race to the bottom
What we have here is something much bigger than any individual or single country. Market forces are at work, which undergirds the “race to the bottom” capitalism has foisted on the world. It is demand that creates jobs and if wages are declining and more are unemployed, demand will naturally decline, leaving less incentive to hire. Eventually, corporate profit margins will be squeezed, with the result that production is moved to locations with ever lower wage, safety and environmental standards.
Although the future will see occasional periods of growth, with temporary rises in employment and wages, the trend toward more austerity, lower wages and more inequality — concomitant with increasing concentration of power in corporate hands as more money leads to more coercive power over governments — is not only firmly in place but accelerating. This is the inevitable result of allowing “market forces” to make ever more social decisions.
Market forces are nothing more than the aggregate interests of the most powerful industrialists and financiers. Blaming sacked employees for being caught in this flow as lacking adequate personal characteristics is not simply an abuse of individualist ideology but is scapegoating.
Capitalism is a system that produces for the private profit of a few by paying employees far less than the value of what they produce. Meeting human need, when it does occur, is an accident of this system. The only long-term escape is the imposition of a different system designed to meet human needs that provides work for all who need it under democratic control.
Ask yourself: Why is is that massive numbers of people are unemployed at the same time that factories and offices sit empty in large numbers? Is it really true that a system that produces such results is the best the world can do?