Commentary

War talk from the Bush administration has done a pretty good job of shouting down any news coverage of rising unemployment. Just released figures from the Labor Department show that unemployment continued to climb slightly from 5.6 percent in September to 5.7 percent in October. The Bureau of Labor Statistics said that the economy lost 5,000 jobs.

On face value, 5,000 jobs lost and one tenth of one percent doesn’t seem all that bad. But, of course, the real numbers to worry about are buried underneath.

The 5,000 figure is a net figure after all the pluses and minuses are tallied. In fact, the economy lost 49,000 jobs in manufacturing. Most of these jobs are factory jobs in the key basic manufacturing industries like auto, airline, steel and machine tool. There has been a three-month surge in factory job loss. In 2002, the previous three months, May through July, 58,000 factory jobs were lost, compared to 140,000 lost in August through October – a sharp increase.

These basic manufacturing jobs are at the heart of a capitalist economy. Manufacturing is not the largest sector. Yet built around it, and dependent on it, are other huge sections of the economy, including large parts of the service, energy, transportation and construction industries. For example, the rule of thumb in steel is that every steel job requires five more jobs in the other sectors of the economy. Samuel Gompers once said something to the effect that Americans didn’t build a strong economy by taking in each other’s washing, but by manufacturing washing machines – there is still great truth in that.

The acceleration of job loss in basic manufacturing does not bode well for economic recovery.

Another aspect is the so-called consumer driven recovery. It is often said that consumers constitute over 60 percent of the economy. Of course, the overwhelming majority of consumers are workers, and many of the worker/consumers with the most money to spend in the economy are union manufacturing workers. As they are laid off in greater numbers, the purchasing power of “consumers” takes a hit and consumer demand declines. Capital spending on new factory construction and new manufacturing equipment is falling as a result.

The Labor Department report gave other indications of an economy headed back towards a deeper recession. Since the recession began, the private sector has lost 2.1 million jobs net. The number of long-term unemployed (more than 27 weeks) surged to the highest levels since October of 1994, well into the ‘recovery’ from the last major recession.

Another telling indication is that temporary agencies reported a fall-off of 56,000 jobs, the largest decline in over a year. Corporations often hire temp workers to test the waters before putting on new permanent employees. This is another indication that companies are not soon going to be adding new jobs.

At the same time jobs were created in government. This included 13,000 new federal jobs and 28,000 local government jobs. While these jobs help keep the overall unemployment rate from skyrocketing, these are for the most part lower-paying jobs than in manufacturing. Again, this means fewer consumer dollars in the economy. In any case the tax cuts for the rich and increased military spending are combining to create a dangerous budget short-fall that threatens domestic government budgets at all levels.

Real recovery must be based on rebuilding the core industries and basic manufacturing. These are the jobs that rebuild America by rebuilding our crumbling infrastructure. Recovery needs to be based on meeting human needs like health care, education, recreation, housing and transportation. These are the needs that put people back to work at the decent wages that allow workers to be consumers.

Scott Marshall is a vice chairman of the Communist
Party USA and the chair of its Labor Commission.
He can be reached at scott@rednet.org

PDF version of ‘Whose recovery? Unemployment up’

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