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New Unemployment Numbers Reveal the Truth about Economic Recovery

Skeptical about capitalist claims that we will soon be “flush with cash” and out boosting the economy? The latest weekly increase in claims for unemployment benefits shows the real truth about the system of exploitation the working class confronts every day.

Scott Cooper

March 18, 2021
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Photo: Joe Raedle/Getty Images

The U.S. Department of Labor released its latest report on weekly claims for unemployment insurance across the country this morning. The business press has recently been touting “signs” of a strong economic recovery this year, anxiously awaiting the lifting of pandemic restrictions so people can get back to spending money — and not just online. But the real story for the people who actually create the wealth is never as good.

According to today’s figures, initial claims for jobless benefits hit 770,000, an increase of 45,000 from the previous week. It was a slap in the face to the many bourgeois economists who, just in recent weeks, had been forecasting that new claims would drop to 700,000. And the new figure doesn’t even include the nearly 300,000 applications for unemployment compensation through a temporary federal relief program.

Over the course of the pandemic in 2020, the official unemployment rate approached 15 percent in the United States — its highest level since the Great Depression of the 1930s. Official numbers don’t even count people who have run out of benefits, who aren’t eligible for benefits in the first place, or have given up looking for work. And they don’t measure the underemployed — people with jobs, often part time, that don’t even come close to providing enough to stay afloat.

All told, last week’s combined state and federal jobless claims totaled 1.02 million across the United States. Since the pandemic began last year, this number has never been below 1 million per week. Before the pandemic, there had never been more than 700,000 applications for unemployment aid in a single week.

Joblessness in Texas is largely behind the surge. It is the state with the largest increase — thanks in large part to the massive winter storm that shut down so much of the state’s economy in February and caused power outages that literally resulted in people freezing to death. Those outages also made it impossible for many people who lost their jobs to apply for benefits until last week.

In general, those benefits do little more than “help” people barely live another day to be exploited if, and when, the capitalists decide they need workers again. In the world’s richest country, what gets paid out to those in need of unemployment assistance is in most cases barely a subsistence “wage.” For a huge percentage of those who do receive some unemployment benefits, the money ends up being sent immediately to landlords for unpaid rent or gets taken out of accounts by banks to cover a wide variety of automatic payments and overdraft fees. Still, it doesn’t keep you from being evicted or, say, from having to forego buying overpriced prescription medications. Does a $1,400 stimulus check on top of being out of work for months or an entire year make you feel “flush with cash” and “likely to go out and spend” on “air travel, restaurant reservations, and hotel bookings,” as MarketWatch predicted recently? Of course not. The plight of the great mass of people in this country is largely invisible to the business press.

The truth is that the U.S. labor market is going to take years to recover from the damage Covid-19 has done, as the bourgeois economists acknowledge. And in this context, “recover” means getting back to an increasingly exploitative labor market with minimum wages that do not come close to keeping people from falling into poverty. It means creating new jobs that are more and more precarious and less likely than ever to have any sorts of protections, or calling people back from layoffs to insufficient jobs from before coronavirus.

That’s how an economy that is based on exploitation works. The Texas debacle is how a system based on maximizing profits and disregarding people’s needs works. Paltry, insufficient weekly unemployment benefits — the government giving us back our own money — instead of a guaranteed pandemic wage for everyone, is about as “enlightened” as capitalism can get. And the bosses will take that away in a heartbeat to protect their own interest. That’s the one thing we can always take to the bank.

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Scott Cooper

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

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