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.
March against inflation and unemployment, Chicago 1973 (Photo by John H. White)
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.
(Graphic by the Economic Policy Institute)
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?
Systemic Disorder 
Of course, it is only going to get worse. There was an article out recently about how more companies are making use of ‘temp agencies’ as opposed to flat out hiring people. This has become the new ‘norm. Many highly skilled workers are finding themselves shut out of the workforce and have been unemployed for years to the point where they had to take a ‘temp’ job and where is the incentive for employers to hire these people when they get the best of both worlds? They get a worker who is skilled and they don’t have to worry about offering the ‘temp’ worker any benefits and most ‘temp’ workers never qualify for any benefits from the ‘temp’ agencies that ’employ’ them for want of a better word. Also, how can they attempt to buy a home, or rent an apartment or purchase a vehicle when their application would read: ‘temporary employment’? They can’t.
We are spiraling downward, faster and faster and it is not looking good for people who want to work and make ends meet and live a decent life. I believe that concept is lost, over and out.
Thank you for an excellent piece, as usual.
I was at a talk last year where one of the speakers pointed out that Wal-Mart was the biggest employer in the U.S. (speaking of low wages). He then asked if anyone knew the second biggest? I didn’t. It turned out to be a temp agency!
As you correctly point out, Shelby, our conditions are only going to get worse, because that is all that unchecked capitalism has to offer us. We’re rapidly heading back to the 19th century, except we have militarized police forces instead of Pinkertons to crack down on dissent. Then again, maybe we’ll see new versions of Pinkertons, too — Blackwater (or Academi as it now calls itself) needs new revenue.
I recently came across a research paper that found that at eight months of unemployment callbacks from employers are about 45% lower than at one month of unemployment. The researchers submitted 12,000 résumés to 3,000 job postings in a variety of industries in 100 different cities. The longer someone is out of a job, the harder it is to find a job because employers believe there is something wrong with them. Blaming an individual victimized by circumstances is always better from the bosses’ perspective than questioning the system.
Our only escape is organizing across borders and fighting back collectively.
On “organizing across borders and fighting back….,” I couldn’t agree with you more. You are correct in that the applications of those who have been out of the workforce longer are not even considered because to paraphrase, “there’s just got to be something wrong with them.” Something is wrong alright, but not with the long-term unemployed. But, yep, they’re blamed and shamed. Sigh! I often wonder if we’ll ever get it together!
..and I was not surprised at the ‘temp’ agency as the second biggest employer. I only wish I were!
Even worse than temps or part time jobs, are unpaid interns and zero hour contracts. And they argue it is good for flexibility. Sigh.
Well, for the bosses exploiting interns, free labor is the ultimate in “flexibility.”
A friend, who has cancer, recently wrote me to say that “cancer sucks”. So does capitalism. There are strong parallels between cancer and capitalism – both end up destroying their hosts.
Capitalism is indeed a cancer: Cancer is an uncontrolled growth. We can’t expand infinitely on a finite planet. The drive — necessity — of expanding profits (or attempting to) is a part of that expansion and a key part as to why unemployment rises over time and more working people lead increasingly precarious lives.
[…] Scapegoating the unemployed for being at the mercy of a global phenomenon […]
I’m re-reading Catastrophism: The Apocalyptic Politics of Collapse and Rebirth. I’ve suggested that followers of this blog read this book before and I’ll recommend it again. From Sasha Lilley’s essay, on pp 46-47:
“The notion that capitalism would inevitably collapse under its own weight makes up the deterministic half of the catastrophist dyad, premised on the presumption that capitalism will butt up against insuperable economic limits. The idea that capitalism would come to and end is not unique to Marxism, and was particularly prevalent in the first half of the twentieth century; economist Joseph Schumpeter – briefly Austria’s minister of finance – concluded that capitalism would eventually render itself obsolete. Yet the Marxist tradition – at least prominent parts – has been particularly afflicted with the notion that capitalism would catastrophically break down rather than be vanquished by the downtrodden.”
I’d suggest that a focus on the impossibility of “expand[ing] infinitely on a finite planet” is another form of catastrophism. When I drew a parallel between cancer and capitalism, I was only pointing out that both manifestations of life (the cancer cell and homo sapiens sapiens) destroy their hosts. One destroys a unique individual and the other destroys entire ecosystems. I’m beginning to see that what needs to be examined is the fundamental disrespect for Life, in all of its myriad forms, that humans exhibit on a daily basis. It seems that every other form of Life on this planet is subject to some form of control, be that predation or disease. Only humans seem to have escaped those constraints, to their peril. I don’t know that any life-form respects other manifestations of Life but I do know that humans, as a species, are doomed if they continue on their present path. Will Life cease to exist? Not likely. As long as what Nietschze described as the Will to Power exists and it is not tamed by some counter force, humans are on a path to extinction or drastically reduced numbers.
Read the book by Lilley and the other members of Retort. A lot of historical events that seemed not to be connected will be connected after you finish the book.
I would not agree that the concept of “expand[ing] infinitely on a finite planet” is catastrophism, because it reflects simple mathematics. You take everything out of the ground, there is nothing left. A critical part of why the world is being subjected to an accelerating race to the bottom is the need, intrinsic to capitalism, to expand. Exxon and Mobil merged, so Conoco and Phillips had to merge to remain competitive. And on and on.
Either humanity moves to a sustainable mode of production and existence — and that means either we in the West use far less energy and resources and/or use them far more efficiently — or a reduction will be forced on us by the limitations of nature. Rosa Luxemburg said it a century ago: Socialism or barbarism. My position is that it is better to start transitioning toward a sustainable, more humanistic economic system now before change is forced on us.
Just because capitalism will not last forever does not mean what replaces it will be better. It can be, with organizing. Or it could be something worse because elites will be able to retain their positions only through force while the rest of us scramble to survive. Contrary to its critics (and despite its misuse by some of its practitioners), Marxism is not teleological. Nor does it make definitive predictions. What it does is provide the most useful critique of capitalism we have and the philosophical means to grasp modern reality and find a path to a better future. What we do with it — or any other body of work — is up to us.
And that capitalism will not live forever does not mean it will “inevitably collapse under its own weight.” It’ll be around for decades unless we speed its demise, and it will likely be a downward trajectory rather than some sudden implosion. Sasha Lilley, in this particular passage, is setting up a straw person to knock down. The irony is that, in the early 20th century, it was the social democratic reformers, and not the more militant, who believed in capitalism’s inevitable replacement by socialism; but they believed that socialism could be implemented in stages through a parliament. No, the capitalists did not stand by and let their system be replaced. They will won’t.
[…] February 2010 industries whose jobs pay between $9.48 and $13.33 an hour have accounted for 44 percent of job growth. The salary of many full time workers in these industries keeps them […]