Capitalism sucks: more loyal to profit abroad than jobs at home

As a result of the Great Recession, states across the country are facing huge deficits.

In response, governors, particularly those from the tea party backed hard right, are attempting to relieve the crisis on the backs of the working class and people. But workers in Wisconsin, Indiana, Ohio, are saying "hell no."

And for good reason: prospects for U.S. workers in the post-recession economy are grimmer than ever.

On the other hand, in the midst of the recession, American big businesses are making record-breaking profits. The American Prospect writes, "Corporate profits for the third quarter were the highest on record - $1.659 trillion - and were 28 percent higher than third-quarter profits one year prior, the highest year-to-year increase on record, beating the old record set in the previous three months."

Fourth quarter profits were also top notch, according to the Wall Street Journal. "With about 50 percent of companies already reporting, fourth quarter profits for the biggest U.S. corporations have been exceptionally strong and 2010 is poised to deliver the third-best full-year gain since 1998-with sharp advances in the telecommunications and energy sectors and a rebound in financial services."

Apparently much of the profit making is derived from investments abroad: "In 2001, 32 percent of the income of the firms on Standard & Poor's index of the 500 largest publicly traded U.S. companies came from abroad. By 2008, that figure had grown to 48 percent," writes Harold Meyerson.

This trend, warns Meyerson, is continuing. "A 2008 survey of 1,600 companies conducted by Duke University's Fuqua School of Business and the Conference Board, a group of leading corporations, found that 53 percent had an offshoring strategy - up from just 22 percent in 2005. "Very few" companies, the survey concluded, "plan to relocate activities back to the United States."

Thus, corporate America, notwithstanding the recession and the loss of 11 million jobs, have no plans to rehire U.S. workers and invest in the domestic economy. Increasingly, their business and profits lie abroad: "A study published last year by the Business Roundtable and the United States Council Foundation concluded that in 2006, 48.6 percent of profits of U.S.-based multinationals came from their foreign affiliates, compared to just 17 percent in 1977 and 27 percent in 1994."

A case in point is JPMorgan Chase, which is deeply involved in administration of the food stamp program, a "going concern" in times of recession. Chase, having played a big role in precipitating the housing crisis, which caused the recession, now profits from people going hungry as a result of it. As Mary Bottari wrote for AlterNet, "The firm is paid per customer. This means that when the number of food stamp recipients goes up, so do JPMorgan profits."

However, that's not it. JPMorgan Chase finds that offshoring the administration of food stamp administration is more profitable than hiring U.S. workers. Bottari continues, "JPMorgan is taking its responsibility to keep the U.S. unemployment rate high by offshoring the servicing of many of these contracts to India, according to ABC News."

Meanwhile, in order to increase their rate of profits, big U.S. capitalists seem hell bent on paying American workers wages comparable to a developing country.

For the past 25 years, wage stagnation has been a constant factor in U.S. economic life, but as Meyerson points out, more than that is at work: "The median annual wage of American workers declined by $159 in 2009 from the previous year, to a mere $26,261, meaning that half of all employed American workers make even less than that. The hourly wage for new hires in manufacturing plants, both union and nonunion, today is roughly $15 - about half of what it was just a few years ago."

Not only that, but as result of the recession, new jobs, largely among temp and service workers, pay barely livable wages. Meyerson continues "According to a survey this summer from the National Employment Law Project, only a third of the jobs lost in 2008-2009 were in industries paying less than $15 an hour, but fully three-quarters of the job growth in 2010 came in these same low-wage industries. Among the industries that grew in 2010, the top three occupations were retail sales clerks, cashiers and food preparers with a median hourly wage of less than $10."

By holding down wages, increasing productivity, busting unions, exporting jobs and capital abroad, making greater use of temp workers - in other words, by waging relentless class struggle - U.S. capitalism foresees a very different future for its workforce.

The battles being fought in the state legislatures of the once mighty industrial Midwest will doubtlessly shape whether big business will be able to fundamentally reshape the labor/capital relation in its favor.

The election of President Obama two years ago foretold a different future. The counter revolt of November 2010 seemed to dim these prospects. However, traveling at light speed via the internet, the revolutionary storms brewing last fall in west Europe and now in the Middle East are blowing through the U.S. Midwest. They have a common source: predatory lending and the consequent collapse of financial markets and revenue, now resulting high food prices worldwide and severe budgetary cutbacks. They also have a common solution: workers and peoples solidarity.

Let those who caused the crisis pay the price for solving it.

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  • This direct,militant article shows how the capitalist and imperialist market and modern industry unify the august struggles of international labor. This makes the peace,unity and jobs struggle,along with the vast communication capacities of the internet combined with the love"Soul Force"of Gandhi,the winning weapons in Egypt,Wisconsin,Ohio,New Jersey,New York,Missouri and Texas,and the whole United States and world.
    As brother Joe Sims writes finally,all is lost,unless we-"Let those who caused the crisis pay the cost for solving it."

    Posted by E.E.W. Clay, 02/23/2011 6:25am (3 years ago)

  • The flag of the ruling class is, and has always been, a big dollar sign. Real patriotic Americans (and I mean those believing in real democracy, equality and civil rights) are the people who work hard to build and invest in the United States and its people. Down with the phoney patriots and victory to the people!

    Posted by Rico, 02/23/2011 12:45am (3 years ago)

  • The multi-national corporations are shrewdly playing workers off each other, while attempting to destroy labor unions in the USA through the puppets in state and national halls of political power. Wisconsin may be a flashpoint, but the ramifications travel throughout the globe.

    Posted by RDC, 02/22/2011 5:36pm (3 years ago)

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