Facebook Instagram Twitter YouTube

The Legend of “Full Employment” Under Capitalism

Treasury Secretary Janet Yellen has been talking about the United States achieving “full employment” next year — buttressed by this morning’s lower-than-expected new jobless claims numbers. But the very idea of every worker having a job is absolutely anathema to the capitalist system.

Scott Cooper

March 25, 2021
Facebook Twitter Share
Image: Getty Images

Another Thursday, another report from the U.S. Labor Department on weekly claims for unemployment insurance across the country.

A week ago, I wrote about numbers that had risen to new heights despite bourgeois economists having all forecast figures much lower. Now comes the news that the most recent new jobless claim numbers are down — touted as a sign of strong economic recovery. The 684,000 new filings for unemployment benefits announced this morning are the lowest since the pandemic began in the United States in March 2020, and the first time they’ve been below 700,000 during that period.

It’s “a great sign that things are starting to pick up again for the economy,” declared Ben Ayers, senior economist at Nationwide Mutual Insurance Company, to the Wall Street Journal. Mark Hamrick, senior economist analyst at Bankrate, told Yahoo!Finance, “This is likely a sign of even better things to come for the nation’s battered economy and the millions of individuals who are jobless, underemployed or have left the workforce but would like to work.”

Is it, though? Really? “Better things to come”?

The news wasn’t so “positive” for workers in Connecticut. That state saw what CTPost reports as the “biggest jump in initial claims for unemployment since April 2020.” So clearly there’s a long way to go. But that’s not getting in the way of spinning a good yarn.

Just last week, Treasury Secretary Janet Yellen testified before the U.S. House Committee on Financial Services. In her opening remarks, she stated, “We should be clear-eyed about the hole we’re digging out of: The country is still down nearly 10 million jobs from its pre-pandemic peak.” And she added that there “still are some very deep pockets of pain in the data.”

To get a true understanding of all this, it’s useful to turn first to the great American humorist Mark Twain, who popularized (although didn’t coin) the statement, “There are three kinds of lies: lies, damned lies, and statistics.”

The statistics lie is that unemployment as reported by the U.S. government even remotely corresponds to the actual numbers of people without a job. Pandemic or not, the numbers have never included people who have run out of benefits, aren’t eligible for benefits, or have given up looking for work. And since the pandemic began, these new claims numbers have never included anyone applying for unemployment compensation through the specific coronavirus-related temporary federal relief program.

The “damned lie” in Yellen’s testimony came later in her opening remarks. Touting the recent passage of the Biden administration’s American Rescue Plan, she said, “I am confident that people will reach the other side of this pandemic with the foundations of their lives intact. And I believe they will be met there by a growing economy. In fact, I think we may see a return to full employment next year.”

You read that correctly: “full employment.”

What exactly does Yellen mean by “full employment”? Not what you or I would mean: everyone who wants to work has a job. No bourgeois economist or capitalist politician has ever said there would be that kind of full employment, for a very simple reason: the capitalists have no interest in ensuring everyone who wants to work has a job. It would be to the system’s disadvantage. Karl Marx explained this in his monumental analysis of how capitalism works, and it’s as true today as in 1867 when Capital was first published.

In Volume I, Chapter 25, Marx describes that capitalism goes through periods of “average activity, production at high pressure, crisis and stagnation,” and that the system’s survival through these “oscillations” depends “on the constant formation, the greater or less absorption, and the re-formation of the industrial reserve army or surplus population.” In other words, capitalism ensures — because it is necessary for its survival — that there will never be “full employment,” because having unemployed people comprise an “industrial reserve army” allows for the bosses to “recruit the surplus population.”

Having this reserve army of the unemployed serves other purposes, too, beyond just ensuring there are workers seeking jobs when the oscillation creates that need among the capitalists. It also keeps the entire workforce in check in ways that benefit capital. It drives down demand for higher wages, because workers are essentially forced to compete with unemployed and underemployed workers for whatever jobs are available. And the more desperate the unemployed become, the more likely they are to be recruited as scabs when employed workers do fight back and strike.

“Full employment” under capitalism is as much a legend as the vanishing hitchhiker, unicorns, or the alligators that live in New York City’s sewers.

As for the “better things to come,” Yellen and her ilk who make this claim say nothing about the global economic crisis that began in 2008, was never resolved, and that has only been exacerbated by Covid-19. They make no mention of the looming battles over making the working class pay the costs of the crisis, so the capitalists don’t have to. They are silent on the likelihood of severe austerity measures that will cut back on social services, education, and so on — despite the Biden stimulus.

Revolutionary socialists have an answer to the problem of unemployment. It’s one that makes perfect sense, but runs right up against the profit-making and exploitation on which capitalism is based: cut the length of the workweek and divide up the work hours so everyone can have some, without any reduction in pay. Put people to work fixing roads and bridges, building schools and clinics, refurbishing housing, and so on. Pay for it by taking the massive profits from the corporations and using it to meet people’s needs.

Capitalism can’t solve the problem of unemployment. Capitalism doesn’t want to solve the problem of unemployment. But take the fetters off production and put the economy under workers’ control, and we can drop the charade of these Thursday morning reports on new unemployment claims.

A program like that will require a real battle by workers organized to fight in militant, mass struggle independent of the political parties that represent the bosses — no matter what they may say when they ask for our votes.

Facebook Twitter Share

Scott Cooper

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

United States

New York’s Eviction Moratorium Ends Today. We Demand Free Public Housing For All

New York’s eviction moratorium expires today, and hundreds of thousands of households across the state are at risk of eviction. We cannot turn a blind eye to a single eviction, and we must demand rent cancellation and free public housing for all.

Emma Lee

January 15, 2022
US President Joe Biden delivers remarks on the grounds of Morehouse College and Clark Atlanta University in Atlanta, Georgia, US on Jan 11, 2022

Jim Crow Joe’s Voting Rights Speech Made a Mockery of the Civil Rights Movement

Joe Biden cynically spoke out in favor of voting rights, pretending to have been an activist in the civil rights movement. But for all his talk about expanding democracy, Biden serves, strengthens, legitimizes, and protects the racist, undemocratic system under which we live.

Tatiana Cozzarelli

January 14, 2022

Shut Down Guantanamo Bay

Yesterday was the 20th anniversary of the opening of Guantanamo Bay Prison. Its continued operation shows that the “War on Terror” has not ended.

Tristan Taylor

January 12, 2022

2022 Must Mark a New Stage for the Climate Movement

After a year packed with climate disasters and blatant disregard by capitalists, the climate movement cannot afford to be apathetic or repeat a failed strategy.

Sam Carliner

January 11, 2022

MOST RECENT

“I Am A Man”: MLK and the Memphis Sanitation Strike

Martin Luther King Jr was assassinated in Memphis, TN. He was there supporting striking sanitation workers.

Madeleine Freeman

January 17, 2022
Students hold sign that reads "Safe schools should not be a debate."

“I Want to Thank the Staff That Held the Line”: Interview with a Chicago Teacher

Earlier this month, teachers in Chicago voted to resume remote learning rather than return to unsafe working conditions. In response, Chicago Mayor, Lori Lightfoot locked the teachers out of their classes and threatened to stop paying them. After a few days, the Chicago Teachers Union’s House of Delegates voted to suspend the teachers’ action and called them to in person classes. We spoke to a Chicago teacher about this struggle and what it means for educators across the country.

Left Voice

January 17, 2022

Eleanor Marx: A Punk in the 19th Century

Eleanor Marx, the youngest daughter of Karl Marx and herself a socialist activist, was born on this day in 1855. A citizen of the world, she resonated with Shelley and Ibsen and participated in the main theoretical and political debates of her time.

Celeste Murillo

January 16, 2022
Protesters carry a banner that says "Johnson Must Go, He Partied While People Died."

Why “Partygate” Threatens to Bring Down UK Prime Minister

UK Prime Minister Boris Johnson is in the midst of a growing political crisis after it became clear that he and his aides violated Covid-19 regulations by having parties. These parties are a slap in the face to the working people of Britain, who were banned from seeing their families while the Prime Minister drank with his cronies.

Ezra Brain

January 16, 2022