Stimulus package—why workers need more

By Fred Goldstein

Mass protests against the global economic crisis are spreading.

French workers demonstrate in the streets of Nice, France, Jan 29. SUD is the Solidaires Unitaires Démocratiques group of labor unions.

Protests recently toppled the government of Iceland. There have been militant protests against unemployment in Greece, Chile, Latvia and Bulgaria. A general strike in France on Jan. 29 compelled the government to give money to the automaker Citroën in return for a promise not to lay off workers.

As the crisis deepens in the United States, the multinational working class, unions, community organizations, students and youth must not be lulled into inactivity waiting for the $787 billion stimulus package, signed on Feb. 17, to take effect.

It is understandable that millions of workers who voted for Barack Obama are anxiously hoping that the legislation will bring them some assistance and relief from the dire economic circumstances they face. Some are unemployed and running out of benefits. Others, particularly public workers, are in danger of losing their jobs and health care.

In addition to the millions of unemployed workers and the people who have lost their homes, there are millions more who were impoverished even before the crisis and are hoping that the stimulus package will help them.

What workers get directly

Many features of the package are aimed at immediate relief. They are the very measures the Republicans focused on trying to cut back, evoking the rightful outrage of workers and all progressives.

Among many other provisions, the final bill stipulates $40 billion for extended unemployment benefits through Dec. 31, 2009. It increases these benefits by $25 a week and funds job training. It sets aside $20 billion to increase food stamp benefits by 14 percent. It includes $3 billion in temporary welfare payments and $14 billion for a one-time $250 payment to Social Security recipients, people on Supplemental Security Income, and veterans receiving disability and pensions. (USAToday.com)

There is aid to students, to workers who have lost their health care, to states to keep their sinking budgets from going completely under, and other measures that, altogether, are supposed to create 3.5 million jobs.

The bill is designed to entice states into expanding their unemployment benefits to include part-time workers, workers who have been forced to leave the job for family reasons, and workers who are in training.

Better than nothing—but still a pittance

Of course, any increase in assistance to workers is better than no increase at all. When you are unemployed or falling into poverty, every dollar counts. The workers are in desperate need and should take everything they can get.

But considering that the working class has created all the wealth of this society in goods and services yet now is living with a huge deficit, the workers are entitled to a lot more than the paltry sums being talked about.

According to government statistics, the unemployment rate went up to 7.6 percent in January. It is expected to continue growing for the foreseeable future, certainly for the rest of 2009 and into 2010.

A rate of 7.6 percent means 11.5 million jobless workers. Let’s assume that the annual wage of these workers was $40,000—which is a little less than the average wage and represents mere survival for a family of four.

If the jobless rate remains at the present level for the next year, the officially unemployed will have lost $460 billion in wages. This does not include the millions who are unemployed but not counted because they have given up looking for work. Add them in and the figure rises to $500 billion.

It is important to note that “total unemployment”—an official government figure that also includes those estimated to have dropped out of the workforce from discouragement about finding a job and those forced into part-time work—is actually 13.9 percent. At that rate, more than 20 million people are unemployed or underemployed. Of those, only 4.8 million are receiving unemployment benefits from the states and 1.7 million are receiving federal special supplementary benefits.

That means that 14 million unemployed or underemployed get no unemployment insurance.

Bankers get lion’s share

The situation is only going to get worse. The number of unemployed is far surpassing the limited plans for job creation. For the first time since 1939, the number of unemployed has grown by more than half a million per month for three months in a row. While the stimulus package is supposed to create 3.5 million jobs over the next two years, 3.6 million jobs have already been destroyed since the crisis began in December 2007.

To make matters worse, the government’s plan to bail out the banks aims to squander $2.5 trillion—three times the amount of the stimulus plan. The excuse for this fund is to “loosen up the credit markets.”

The fact that the government has given the banks trillions of dollars in direct cash and loan guarantees certainly entitles Washington to tell the banks: “Lend, or else.” But everyone knows that banks will not lend in an economy that is going under. There is no profit in lending in a shrinking economy and that is what banks do—make profit.

So why give trillions of dollars to greedy, profit-gouging bankers to “help” the economy? They are less than useless and have proven it by wild, fraudulent speculation that has ended up in disaster.

That money is being taken away from the stimulus package. It is being taken away from funds needed to keep people in their homes. It should be used to create a real jobs program. The multinational working class needs a direct jobs program. Unemployment insurance, if you’re lucky enough to get it, has a time limit and is not enough to live on. What workers need most right now is jobs at a living wage and an affordable home.

This is what the $2.5 trillion bailout should be spent on—every nickel of it.

Save workers, not profits

The secret truth that no one in the government dares say out loud is that most of these big banks are probably insolvent already. They should have been declared bankrupt long ago because the debts on their books are not worth much more than pennies on the dollar. The bailout is meant to keep these crooks from going under.

These millionaires and billionaires are worrying that they may be down to their last $100 million or so. Meanwhile, millions of workers are worrying about how to pay their rent, their mortgages, their bills for food, medical care, credit cards, auto loans, student loans and so on.

Only after decades of economic attacks on the multinational working class is the capitalist government hastily coming forward with a pittance in aid. These band-aids have nothing to do with concern for the workers. They are meant to save the profit system.

The help the government is offering is a pittance in comparison to what is needed.

The workers and their communities must form alliances everywhere to fight back.

This is an emergency!

The federal government and every state and local government have provisions in their charters or constitutions mandating the authorities to render assistance to the residents of a state or locality in time of emergency. The profit-addicted capitalist class has created emergencies everywhere–of unemployment, poverty, homelessness, medical crises and hunger.

An outstanding example of fightback is the Detroit Moratorium Now! campaign. The organizers have been carrying on a campaign of mass demonstrations and popular agitation to force the government to pass legislation to declare an emergency and stop foreclosures and evictions. The campaign has influenced the political atmosphere in Michigan to the extent that the Wayne County sheriff recently found a legal reason under the provisions of the Troubled Asset Relief Program to refuse to execute any more foreclosures.

Mass layoffs in times of unemployment create a threat to survival, a true emergency for the workers, their families and the communities that depend on their income.

State and local governments have given hundreds of billions of dollars in tax breaks, infrastructure and other enticements to get corporations to build in their areas in order to promote jobs and economic activity. Every one of these companies that closes down or cuts shifts is in violation of such an agreement. The community and the workers have every right to enforce the agreement by demanding that the plants stay open and the jobs remain.

In general, the right to a job should be recognized as a right of all workers. Every worker who has worked for a boss has contributed to the wealth of the employer and the creation of the enterprise. The workers have property rights to their jobs, since they have created the property by their labor.

Inextricably bound to this right is the right to occupy the workplace, the way the Republic Windows and Doors workers did in Chicago and the way the Waterford-Crystal workers have done in Kilbarry, Ireland.

There are innumerable legal ways to assert the rights of workers. But the only way to make those rights legally enforceable is for mass organization and struggle to compel the employers and the governments to meet their obligations to the people.

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