G-20 powers talk reform as more jobs vanish

The leaders of the big imperialist powers met in Pittsburgh in September to argue over how to protect capital. They didn’t put forward one credible proposal to solve the crisis of the hundreds of millions of unemployed and underemployed workers around the world.

At the G-20, countries like China, Brazil, India and South Africa, among others, fought to increase the influence of the underdeveloped world—that is, the majority of the world that has been artificially kept from developing because of the oppressive influence of colonialism and neocolonialism.

But for the imperialist core countries, represented by the heads of state of the U.S., Germany, France, Britain, Japan and Italy, among others, the hot-button issues were such matters as bank capital requirements, capping executive pay, regulating financial markets, derivatives and so forth. They even pledged to let governments review each other’s policies.

All these issues pertain to putting limits on the degree to which the capitalist banks and other financial institutions can defraud each other in the future, the way they did leading up to this past financial crisis. Banks, corporations and investors of all types are still trying to recover from the massive hyperspeculation and fraudulent mortgage schemes by which they swindled each other into a financial crisis. All their regulatory agencies were complicit in allowing the speculative bubbles.

The leaders of finance capital are basically breathing a sigh of relief that the capitalist system has escaped a global depression. The G-20 had met in April of this year and pledged trillion of dollars in government subsidies to the rich as a mechanism to deal with their crisis.

They are now congratulating themselves for having averted the crisis by injecting massive amounts of money into banks and corporations to hold them up from sinking under the crisis that they themselves had created.

But while they have averted their crisis, the working class and the oppressed have plunged deeper and deeper into unemployment—with no end in sight.

Job seekers outnumber jobs six to one

Official unemployment in the European Union is at its highest in 10 years—9.5 percent—and is expected to continue rising. It has been held down to even this high number by government stimulus money, which is due to run out before the year is over.

Unemployment in Germany has been held at 8.3 percent because of the “cash for clunkers” program and because of government subsidies to keep corporations from laying off workers, putting them on short hours instead. Similar programs exist in other European countries.

As the G-20 leaders were on their way home, the U.S. Labor Department released statistics showing that the official number of job seekers here was six times the number of existing job openings—the worst ratio since the government began tracking it in 2000.

This shows that the crisis of the capitalist system is deepening in this period. During the last downturn in 2001, the number of jobless people was slightly more than double the number of full-time job openings. By the beginning of this year, the number of job seekers had risen to four times the number of jobs. Now it is six to one.

In a front-page story on Sept. 27, the New York Times commented on the unwillingness of companies to hire even as the business downturn seems to be temporarily slowing. “Even after companies regain an inclination to expand, they will probably not hire aggressively anytime soon. Experts say that so many businesses have pared back working hours for people on their payrolls, while eliminating temporary workers, that many can increase output simply by increasing the workload on existing employees.”

The Times quoted Heidi Shierholz of the Economic Policy Institute as saying: “They have tons of room to increase work without hiring a single person. For people who are out of work, we do not see signs of light at the end of the tunnel.” Job openings have drastically diminished across the board, from manufacturing to construction, retail, government jobs and even education and health care.

The Times cites the case of a worker in Chicago, Vicki Redican, who has been unemployed for two years since she lost a $75,000-a-year job as a sales and marketing manager in a plastics company. “College educated, Ms. Redican first sought another management job. More recently, she has tried and failed to land a cashier’s position at a local grocery store, and a barista slot at a Starbucks coffee shop.”

There are officially about 15 million unemployed. Some 5 million of them have been out of work for more than 26 weeks, a record. Furthermore, there are close to another 15 million workers who are working forced part-time hours or who have dropped out of the labor market and are no longer seeking work. This does not count the untold numbers who are surviving through small, miscellaneous jobs.

Given the hiring picture, it is clear that the capitalist system has nothing but massive, long-term unemployment in store for the working class—unless and until the workers mobilize to fight for jobs, as was seen in embryo in Pittsburgh with the recent March for Jobs.

Fundamentals, not irregularities, behind capitalist crisis

The very premise of the G-20—that the world crisis was caused by financial irregularities—is false to the core. The crisis began with a financial collapse, but its underlying cause is capitalism itself—the profit system.

When the economic experts of the bourgeoisie talk among themselves about the so-called “recovery,” they all say they will not be convinced until they see consumer spending start to grow enough to lead the bosses to begin investing on a massive scale. Not one of them will confidently affirm that capitalism is really on the road to recovery.

The argument that consumer spending will pull capitalism out of the fire by leading to a surge of investment and the rehiring of tens of millions of workers has no basis in reality. Workers aren’t buying because they are broke. The creation of a regime of low-wage capitalism has deepened over the last 30 years and is the background to the current downturn. Now workers are continuing to be laid off or are having their wages pushed even lower as the bosses strive to regain their profitability.

Factories, stores and government agencies are shutting down or downsizing all over the capitalist world because the bosses cannot make a profit selling the products and services created by the workers. These products and services belong to capital, not to the workers who created them. If the bosses cannot dispose of them at a profit, then the workers get laid off. Thus, the capitalists are destroying the market they need to revive production. This is a growing contradiction that flows from production for profit.

It is a contradiction that the bosses cannot overcome. It can only be overcome by getting rid of capitalism altogether. What can replace it? A system where workers are not dependant on some boss making a profit before they can get work; a system based on planning production to satisfy human need, not private greed. That system is socialism.

Goldstein is author of the recently published book, “Low-Wage Capitalism.”