Goodbye Jobs and Hello Poverty: U.S. Capitalism in the Runup to the Elections and Beyond

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Tens of thousands of workers across the United States have lost their jobs in the last month, and most of those jobs won’t be coming back. There are 8 million people newly below the poverty line since May. This is the promise of U.S. capitalism in the age of crisis and coronavirus.

On October 28, Boeing Co. — which has been bleeding cash — announced another round of layoffs. That word is a euphemism these days for jobs that are unlikely to ever return. This time, 7,000 workers will be axed, adding to the almost 20,000 already announced. By the end of 2021, Boeing will have 40 percent fewer workers than it had when the company merged with McDonnell Douglas in 1997.

It’s more of the same for U.S. companies large and small. In Boeing’s case, the pandemic has collapsed air traffic and devastated its customers, the airlines and leasing companies. This has meant huge production cuts, and in the September quarter Boeing delivered only 28 jetliners compared with 62 a year earlier.

This is a devastating blow for the working class in the Seattle area and in South Carolina, where most of the jobs will be lost. But for the corporate bosses at Boeing, it’s not all bad news. “It has become more reliant on its defense business, where sales were double those of the commercial arm in the latest quarter,” according to the Wall Street Journal.

Like with any major industrial sector, a blow like this has ripple effects throughout the economy. The Journal reports further, “The collapse in airline traffic and reduced aircraft production have already cost the U.S. aviation industry around 100,000 jobs so far this year and another 220,000 are at risk, according to the Aerospace Industries Association, a trade group.” Small companies in the supply chain will go under, stranding more and more unemployed workers. The shops, restaurants, and other services in the communities where these unemployed workers live will suffer, too, which means their workers will take a hit.

The expanding ranks of the unemployed, and these sorts of layoffs, have the potential to entire communities. There are so many places in this country that have one local major employer — perhaps a small industrial facility that employs only a couple of hundred workers. If they halt production for an extended period, it can send a locality into a downward spiral of impoverishment from which it never recovers. People lose their homes or get evicted from their apartments. Sometimes, if things do bounce back, it’s too late for those places. That link in the supply chain has been broken, and the chain’s been put back together somewhere else.

It’s Capitalism 101. A system based on exploitation breeds crises, and when a crisis comes it’s not the big bosses who bear the brunt. It’s the working class.

Those are the kinds of places Trump appealed to in 2016.

Expanding Joblessness

Boeing was only the latest company to announce new layoffs. As an October 2 Time magazine headline blared, “Massive Layoffs Are Underway Across the U.S., Threatening the Already Frail Recovery.” In the weeks preceding the Boeing announcement, the news was full of others — across nearly every sector of the economy. WarnerMedia announced on October 8 its plan to cut thousands of jobs as the coronavirus eats into movie and television profits. Cineworld closed all of its theaters worldwide on October 5, throwing 40,000 people out of work in the United States.

Airlines had been barred from laying off workers until October 1 under the terms of the $25 billion federal bailout they got earlier in the year. That day, they started “taking more drastic action,” reported the Wall Street Journal. Like Boeing, the airlines are bleeding cash. American Airlines and United Airlines began furloughing tens of thousands of workers the moment the ban was lifted. Some others have sought to avoid layoffs by pressing workers to accept early retirement packages. Southwest Airlines did that all summer, and then on October 5 began pushing for its unions to accept cuts in pay so the company wouldn’t be forced to furlough workers for the first time ever.

Asking the unions for pay cuts in bad times is a time-honored ploy of the capitalists. Sometimes, as a show of “good faith,” multi-millionaire company executives take cuts, too — which, of course, they can afford. Southwest’s CEO is foregoing his salary for a year. He’ll be fine. But will those unionists ever recover those give-backs?

“It’s a slippery slope and we have no intention of sliding down it,” John Samuelsen, international president of the Transport Workers Union — one of Southwest’s unions — to the Journal. But other union bureaucrats have agreed to sit down and talk.

Allstate, the insurance company, announced on September 30 that it was dumping 3,800 employees — but softened the blow by allowing them to stay on their medical plans until the end of the year and offering “talent acquisition staff” to help people find new jobs. With the new upsurge in coronavirus across the country, they’ll be lucky to find jobs filling boxes in an Amazon warehouse for minimum wage.

On September 29, Disney eliminated 28,000 jobs, mostly at its two theme parks in California in Florida.

To call this list partial would be a gross understatement. The same story is being replicated across the country. In small machine shops, local service companies, mid-size factories … you name it. Speaking of understatement, Betsey Stevenson, a University of Michigan professor of public policy and economics, told Time, “These numbers are worrisome.”

But Stevenson wasn’t pulling punches with the rest of what she said. “When they let people go, it’s not temporary layoffs. These are companies struggling to keep people on and thought could get to the other end [of the pandemic]. But the end is not in one or two months. And maybe not in six months.” She speculated that of those “temporarily laid off,” perhaps only 70 percent will have their old jobs to return to. That seems optimistic, given the impending global recession forecast for 2021 by every major international financial institution.

Growing Poverty

All this is playing out in the richest country in the world. And as joblessness expands across the United States, the super-rich just keep getting richer. The United States, before the pandemic, already ranked as the country where the distribution of wealth is more unequal than any other.

In the age of the coronavirus, the number of people in the United States who are officially “poor” has already grown by 8 million since May, according to a Columbia University Study. No surprise that it’s worse for Black people and children.

The same study found that the Cares Act aid — the $2 trillion dollar federal emergency package that included one-time payments for households across the country (excluding, of course, undocumented workers and many others among the most vulnerable) and a huge expansion of unemployment benefits — had kept more than 18 million from falling below the poverty line. Put simply, said one of the study’s authors, “The Cares Act was unusually successful, but now it’s gone, and a lot more people are poor.”

Meanwhile, the U.S. Senate went into recess after months of abject failure to throw any lifeline whatsoever to the masses in desperate need of help — assistance that comes in the form of our own money, because the federal government’s only money is what it collects from us.

The New York Times painted a picture of what it’s like for everyday people trying to eke out an existence in the rapacious U.S. capitalist system where the ruling class doesn’t even care about — to use some old Marxist words — ensuring the menial daily reproduction of people’s labor power so they can come back to work and be exploited again. The newspaper told the story of a family of five in a small village 80 miles north of Sacramento, California. When schools closed in the spring, the mom — who was working as an Instacart shopper — had to stay home to care for them. The dad then got laid off from his landscaping job. The Cares Act kept them afloat, and they prepaid three months’ rent with their stimulus check. But when the unemployment bonus ended in July, their cash income plummeted nearly 80 percent.

Now they live on $350 a week plus food stamps, no electricity, and have gone weeks without propane for cooking and hot showers. “We stick with cold meals — cereals,” the mom told the Times. The parents skip meals to keep the kids fed. The dad sold his tools to buy diapers, and the mom tried to sell her eggs to a local fertility clinic – but didn’t qualify medically.

This is a white family in the United States of America, the richest country in the world.

What’s Next?

That California family’s story is the one being prepared by the ruling class for people in all 50 states. The coming recession will be bad enough; the pandemic makes it much worse. We will likely look back on October 2020 and ask, “Remember when it was only 8 million newly poor?”

Capitalism in crisis always means things get worse for the great majority. The ruling class is nothing if not consistent about crises: it will do whatever is necessary to protect its wealth and make sure the working class pays to save the economy. If the coronavirus is ever brought under control, we’ll still have the impending recession. Layoffs will increase. Austerity will be on the agenda. Social services will be slashed. Profit must be protected at all costs.

U.S. capitalism’s nearer-term, post-election future holds out a promise: the number of newly impoverished people will grow far beyond 8 million. For the working class, the path forward must be to replace this rotten system of exploitation. We won’t do that through lesser-evilism, by electing yet another politician who serves the interests of our oppressors.

“Bourgeois society stands at the crossroads,” the great German revolutionary Rosa Luxemburg once wrote, attributing it to Friedrich Engels, “either transition to socialism or regression into barbarism.”

About author

Scott Cooper

Scott Cooper

Scott is a writer, editor, and longtime socialist activist who lives in the Boston area.