Posts Tagged ‘unemployment’

by Chaz Bufe, editor See Sharp Press

(I wrote this about three years ago, so some of the statistics, especially the employment statistics, are no longer accurate.)

Let’s get one thing straight right now: I’m not questioning the good intentions of those who join the U.S. military. The vast majority almost certainly do so for very understandable reasons.

At the same time, respect for the individuals who comprise the military is not the same as worship of the military, which is almost a state religion in the United States. It’s nearly all pervasive, from Fox “News” to liberal pundits  (Rachel Maddow, Stephen Colbert, Michael Moore) to every craven baseball announcer (in other words, almost all of them). The reasons for this military butt kissing are obvious: 1) to create and maintain conformism with its us-versus-them mentality; 2) to confuse military worship with patriotism; and 3)  to make discussion of the size and role of the military taboo, “unpatriotic.”

But what of those who serve in that military? Why do they do so? And are they heroes simply because they do so?

The primary reason that most young people enlist is almost certainly that they’re economic draftees. Real unemployment (counting the “underemployed” and “discouraged workers”) is approximately twice the official rate of 7.0%. On top of that, the black unemployment rate is more than twice the rate of whites, with hispanics falling in between: 6.2% white; 12.5% black; 8.7% hispanic; with teenage unemployment at 20.8% (according to the Bureau of Labor Statistics). And the employment situation is in reality even worse than that: the percentage of adults aged 18 to 65 either working or actively seeking work is at a historic low, only 63%.

Then realize that wages in this country are so low that it’s nearly impossible even for those who have jobs to get ahead. Real hourly wages hit their high point in the U.S. in 1973, and have fallen about 15% since then; productivity per hour worked has doubled over the same period. And during the current “recovery,” a large majority of new jobs are low-wage jobs.

So, it’s virtually impossible for young people to work their way through college (if they can find jobs), and their families simply can’t afford to send them. The cost of college tuition rose roughly 300%, three times faster than the cost of living, over the last 35 years–far higher even than the increase in the cost of health care. As a result the percentage of college graduates in the 25 to 34 age group in the U.S. fell to sixteenth in the world in 2012, with the U.S. seeming to fall further behind with every passing year. And those who do graduate from college in the U.S. are often burdened with crushing debt well up into the tens of thousands of dollars–debt which, thanks to the U.S. Congress, they cannot discharge through bankruptcy.

So, is it any wonder that many “volunteers” in the U.S. military enlist simply because they have no good economic or academic alternatives?

The second reason Americans enlist in the military is that a great many believe that they’re “protecting America” or “protecting freedom.” But is this at all realistic?

The first and most obvious question here is “protecting” against what?

The U.S. has been the world’s sole superpower for the last quarter-century, and has a military presence in over 100 countries and on all continents except Antarctica. Since the War of 1812, U.S. territory has been invaded exactly once: two remote Aleutian islands invaded in 1942 by the Japanese–twice if you count Pancho Villa’s border raid on Columbus, New Mexico in 1916. In the same period, to name only instances that immediately come to mind, the U.S. has invaded Mexico (seizing half of its territory), Cuba, the Philippines, Haiti, the Dominican Republic, Nicaragua, Grenada, Panama, Vietnam, Cambodia, Afghanistan, and Iraq. That’s some “defense” there, Bubba.

Who does this benefit? Certainly not the American people. The U.S. spends more on its military than the next ten countries combined; the U.S. military budget was $682 billion in 2013 ($711 billion now), and that doesn’t count the “black budget” nor veterans benefits nor interest on loans taken out to finance previous military spending. This means that the U.S. government spends over $10,000 on the military annually for every American family of four.

So, again, who does this massive military spending benefit? Certainly not American soldiers. They’re the ones in harm’s way (4500 dead in Iraq, over 2000 so far in Afghanistan–with tens of thousands physically wounded, and quite probably far more bearing psychological wounds: approximately 5,000 current or former members of the U.S. military commit suicide every year). And their wages are often so low that their families end up on food stamps.

The ones who benefit from massive military spending and military intervention are the transnational (not U.S.) corporations that have no loyalty to anyone or anything other than their bottom lines. The U.S. military essentially operates as security, as muscle, for these corporations as they siphon profits from the rest of the world.

The words of former U.S. Marine Corps Commandant, Major General Smedley Butler are still pertinent after eight decades:

I spent thirty-three years and four months in active service in the country’s most agile military force, the Marines. I served in all ranks from second lieutenant to major general. And during that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism….

War is a racket, possibly the oldest, easily the most profitable, surely the most vicious… Out of war a few people make huge fortunes, nations acquire additional territory (which is promptly exploited by the few for their own benefit), and the general public shoulders the bill–a bill that renders a horrible accounting of newly placed gravestones, mangled bodies, shattered minds, broken hearts and homes, economic instability, and back-breaking taxation of the many for generations and generations.

How would you describe those whose lives and physical and mental health are sacrificed in such service? Or simply all those who put on the uniform? Heroes? All of them?

Those who indiscriminately use this term cheapen it; they use it as a propaganda term to stifle dissent. If all members of the military are heroes, their acts are also heroic. And who wants (or dares) to protest against those who order “heroic” acts?

Reserve the term “heroes” for those who deserve it–those who commit out-of-the-ordinary, genuinely heroic acts. The term simply doesn’t fit all those who are cynically used and discarded by the government and the corporations it serves.

We put up our 1,000th post a little over a week ago. We’re now looking through everything we’ve posted, and are putting up “best of” lists in our most popular categories.

This is the sixth of our first-1,000 “best of” lists. We’ve already posted the Science Fiction, HumorMusicInterviews, and Addictions lists, and will shortly be putting up other “best ofs” in several other categories, including Anarchism, Atheism, Politics, Religion, Science, and Skepticism.

Best Economics Posts

by Chaz Bufe, co-author The Anarchist CookbookAnarchist Cookbook front cover

Most people believe that economics is far too complicated for them to understand, and that they shouldn’t even try; they should leave economic decision-making to “the experts”–simply not concern themselves with it.

And, yes, some economic matters–tariffs, trade deals, taxation, the stock market, futures trading, derivatives, etc.–are complex. Very complex. But other economic matters are pretty damn simple.

Let’s start with material wealth. What creates it? Labor applied to natural resources (coal, oil, ore, timber, etc.), using the collective knowledge of human civilization, acquired over hundreds of generations.

Who created natural resources? If the answer is God or nature, why should a handful of people receive the lion’s share of benefits from the world’s resources? What possible justification is there for this? If the answer is “inheritance,” that’s merely an assertion that the descendants of those who have unfairly benefited should also unfairly benefit.

As for labor, why should those with inherited wealth, who have often done no useful work for generations, benefit from the labor of others? Why should there even be inherited wealth? Why should heirs, many of whom have never done an honest day’s work in their lives, inherit the wealth created by the collective labor of hundreds of generations? And again, why should they be the primary beneficiaries of the world’s natural resources?

Another question regarding labor: If wealth is produced by labor applied to resources, what possible reason is there for unemployment? What benefit derives from producing less wealth than is possible? Who does this serve? No one but the 1%, the relative handful who control the world’s resources. “The reserve army of the unemployed” allows them to hold down wages through the threat of replacing any worker who isn’t sufficiently subservient with someone so desperate for a job he or she will put up with anything.

And what about immigration? An overwhelming majority of immigrants come here to work, that is, create wealth. What’s so wrong with that? The all-too-common answer is “They’re stealing our jobs.” This answer points to two things. The first is that the current economic system, corporate capitalism, does not produce jobs for all who want them. This holds true across the globe.

The second is that unemployment not only suppresses wages, but it turns workers of different races and nationalities against each other. Again, this serves only the interests of the 1%. It helps to ensure labor “peace”–that is, subservience to corporations, and rivalry and hatred among workers, who compete with each other for crumbs from the corporate table. Anxiety over immigration also encourages the rise of xenophobic, racist political movements whose members are so deluded they consider themselves patriots. Who does this benefit?

One final question regarding labor–beyond whether those who inherit wealth should benefit from the labor of those who actually work–is whether the present system of payment for labor is rational, that is, whether it provides fair compensation to those doing useful work. Of course, this is a difficult question, given the near impossibility of accurately assessing the value of work. This difficulty is not, however,  an argument in favor of the current extreme differential in wages, with CEOs receiving hundreds of times the wages of average workers. Rather, it supports the argument that wages should be equal across the board.

At present, those who do the dirtiest, hardest, most necessary work–farm workers, garbage collectors, childcare workers–are among the lowest paid, while those who perform useless or worse-than-useless “work”–stockbrokers, hedge fund managers, commodities speculators, corporate attorneys, lobbyists, advertising executives–are among the highest paid. Is this fair? Is this rational?

Again, the answer is pretty damn simple: it’s so far from fair and rational it’s a sick, cruel joke. Let’s do something about it.


Recap of Previous Posts in the Series

In Part I, we saw that the distribution of income and, especially, wealth in the U.S. is extremely inequitable, with the top 1% owning 42% of financial (nonhome) wealth, with the top .1% owning as much as the bottom 90% combined, and that the bottom 50% of the population owns essentially nothing. As well, since total wealth in the U.S. is currently $81.5 trillion, average (not median–which is half above, half below) per capita wealth comes to over a quarter of a million dollars. Yet distribution of wealth is so lopsided that most people have almost no net worth.

We also saw that American workers–who have one of the longest average work weeks in the world, 47 hours–have seen their real wages decline nearly 10% since 1973, while productivity per hour worked increased by, on average, over 1.75% per year during the same period; compounded, that works out to an over 80% increase in productivity. So, American working people are producing far more than we did four decades ago, and are being paid less. To maintain the same average standard of living as in 1973, we should (assuming a 40-hour work week then) only be working 22 hours per week, had wage increases kept pace with productivity.

In Part II, we saw that working and “middle class” people (an increasingly quaint concept) pay higher taxes than the top 1%. There are two primary reasons for this: 1) Capital gains income is taxed at a far lower rate (15%)  than a good majority of earned (through work) income (with a rate of 28% starting at $37,000); and 2) Other taxes (sales, property, social security, gas, “sin”) hit average people, who spend almost all of their income, far harder than those in the top income brackets, who don’t. It works out that a single worker earning $10 an hour pays taxes amounting to roughly 40% of his or her income, while a nonworker in the top .1% only pays about 30%.

Eliminate that 10% difference in tax rates, and the average worker would have 10% more income–or could work 10% fewer hours to maintain his or her standard of living. Adding that to the 18 hours of work per week that should have been eliminated over the last four decades, and it means that the average work week should now only be 18 hours.

In Part III, we saw that a huge amount of tax money is wasted. The U.S. spends as much on its military as the next eight to ten countries combined, (Estimates of China’s military spending vary, and at least three (maybe four or even five) times the amount of the next highest-spending country, China. Taking the highest estimate of China’s military spending, that means that if the U.S. matched China’s expenditures, it’s now wasting approximately $400 billion annually (out of an annual military budget of approximately $600 billion). That comes to $1200 for every man, woman and child in the country.

We also saw that the U.S. through its sky-high–by far the highest in the world–incarceration rate and the “war on drugs,” is wasting at least $50 billion per year (probably considerably more), and that this is not keeping us safe, with the U.S. having the highest murder rate and the fourth highest rape rate in the industrial world.

As well, we saw that the government gives tax breaks amounting to over $1.2 trillion annually, with almost all of the breaks going to corporations and the wealthy, and it also gives direct subsidies to them coming to tens of billions of dollars annually. This works out to total taxpayer subsidies to corporations and the wealthy of approximately $4,000 for every man, woman, and child in the country.

The Inefficiency of Capitalism

Then there’s the fact that capitalism is an inefficient economic system–if you judge efficiency by capitalism’s ability to meet human needs rather than its ability to funnel profits to a very small percentage of the population.

But just how is it inefficient?

In his nearly book-length 2003 pamphlet, The Inefficiency of Capitalism, Brian Oliver Shepherd listed 10 ways in which capitalism is inefficent:

  1. Product duplication
  2. Systemic unemployment
  3. Cost-shifting
  4. Waste of unsold goods
  5. Inherent inefficiencies of hierarchies
  6. Planned obsolescence
  7. Price gouging
  8. Creation of false desires (advertising/consumerism)
  9. Parasitic “jobs”
  10. Inefficient distribution patterns

Another significant one that Brian didn’t list is inefficient, wasteful development patterns.

We’ll look closely at what is probably the most important of these inefficiencies–systemic unemployment–and glance at some of the others, which are more difficult to quantify. Let’s look at those first.

Product duplication is very obvious–just go into a supermarket and look at the dozens of different varieties of toothpaste or breakfast cereals, or walk out your front door and look at the hundreds of different vehicle models on the streets. All of these products are the result of unnecessary duplication of effort. They all–at least those produced by different corporations–have their own supply chains, sometimes-idle factories, delivery chains, and marketing campaigns.

Cost-shifting, the shifting of costs from businesses to the public, is rampant. The most obvious example is climate change damage (rising sea levels, rising temperatures, droughts, etc.), which is caused by fossil fuel burning. Exxon, which funds climate change deniers, raked in $4.2 billion in profits in the second quarter alone this year, and $8.8 billion in the same quarter last year.  The eventual economic cost of climate change will almost certainly come to well up into the trillions, perhaps tens of trillions, over the coming decades–and all of that cost will be borne by the public.

Superfund cleanup is another example. According to the EPA, the costs of cleaning up contaminated sites will be roughly $350 billion over the coming decades. Virtually all of the contaminated sites were created by profit-making businesses, and all of the cost for cleaning up those sites will be borne by the public.

Unsold wasted goods. Huge amounts of unsold goods are wasted, simply thrown away in the U.S. and other developed countries. The most flagrant, and maddening, example of this is waste of edible food. A 2012 estimate in the Washington Post placed the amount of edible food wasted in the U.S. at 40% of the total, or $165 billion worth annually. The USDA reports that 30% to 40% is wasted.

Planned obsolescence is difficult to quantify, but very real. Going beyond such things as Apple cultists standing in line overnight to buy the newest must-have versions of their gadgets, you have such things as auto manufacturers deliberately making their vehicles very difficult for shade-tree mechanics to work on. One example of this is that they often make parts that require special tools to remove or install, and put parts in very inaccessible places (fuel pumps in fuel tanks, for instance–yes, they actually do this). An example from personal experience involves water pumps. Decades ago, I owned a 1951 Chevy pickup, and had to replace the water pump. It took about ten minutes. Back in the early ’90s, I owned a Plymouth for a short while and had to replace the water pump on it. Most of the bolts attaching the pump to the block were easy to access, but they had put one at the end of a tine that extended several inches up in under the timing chain–rather a synthetic rubber timing belt; they sometimes snapped, wrecking the engine in the process–making what should have been a short job into a multi-hour job (made all the worse by having to remove and then reinstall the radiator). There was absolutely no engineering reason for them to have done this. They did it solely to discourage do-it-yourself mechanics. And as cars get older, they require more and more work to maintain; if that work is difficult, owners are more likely to buy new models.

Parasitic jobs are a higher percentage of the total than people generally realize. We can define them as “jobs” that do nothing to produce goods or services that meet human needs. Let’s look at one of the most aggravating examples of such parasitism: lawyers. According to the ABA, there are 1.3 million lawyers in the country, and the average pay for lawyers is over $114 thousand a year. Then there are stock traders, stock brokers, and hedge fund managers who produce nothing, yet receive vast amounts of money, in a few cases over a billion dollars annually. The more mundane useless jobs, such as real estate agent, armaments-industry worker and  car salesman, often make substantially more than average working people doing necessary jobs. And even those doing outright harmful jobs, such as narcotics agents and prison guards are relatively well paid. In contrast, those doing the dirtiest, most necessary work–for example, farm workers, sanitation workers, elder care and health aides–are among the lowest paid. Under capitalism, parasites make the most money, and those doing the most necessary work make the least.

Advertising is another huge waste, given that it’s annoying, provides almost no real information, in many cases is designed to misinform, and in a great many others is designed to stimulate demand for unnecessary or harmful products (alcohol, tobacco, sodas, etc.). In the first quarter of 2015 alone, advertising spending came to an estimated $37.4 billion, which projects to $150 billion this year, or over $400 for every person in the country. This money could be better spent.

Finally, let’s consider the most quantifiable and arguably most important inefficiency of capitalism: systemic unemployment. “Full” employment is usually defined as a 5% unemployment rate, that is, 95% of those who want work have it. The current unemployment rate is 5.3%, which doesn’t sound too bad, but which vastly understates the problem. That 5.3% refers only to those currently working or actively seeking work, and doesn’t include those working part time who want full-time work but can’t find it, at least as many as are officially considered unemployed. Statistica places the current combined rate at 14.2%; the Bureau of Labor Statistics places it at 10.7%, including “discouraged workers.”

Since participation in the labor force is currently only 62.6% of working age adults, that means that a full 37.4% of the work force isn’t working. So, among those working full time, underemployed,  officially unemployed, and “discouraged,” the real unemployment/underemployment rate is at least 17% among those those working, looking for work, involuntarily working part time, or “discouraged.” As for the 37.4% of adults who don’t work, some retired early, some are disabled (estimates of the numbers of those too disabled to work vary, with 7% to 10% sometimes cited), some are stay-at-home parents doing childcare (work not officially classified as work), and some are upper middle class and wealthy people who choose not to work. Even if only a quarter of that 37.4% were able and had to look for work,  that would bring labor force participation up to 72%–with two out of seven, nearly 30% of those able to work, either unemployed or underemployed.

This is a huge waste of potentially useful labor. It means the nation is producing far less than it could; it means those of us doing useful work are carrying a disproportionate share of the work load; and it means that the huge “reserve army of the unemployed” holds down wages, which benefits only corporations and the wealthy–not those of us doing useful work.

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We’ll conclude this series later this week with a summary of the reasons why the work week is far too long.

FREELOADER, n. A man or woman unable to find work, eking out a miserable existence on food stamps and, if exceptionally fortunate, unemployment insurance and friends with couches. Not to be confused with those who earned their idleness through wise choice of parents.

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–from the revised and expanded edition of The American Heretic’s Dictionary, the best modern successor to Ambrose Bierce’s Devil’s Dictionary


Power Plant Men

The Power Plant Men and Women knew that a major downsizing was going to occur throughout the company on Friday, July 29, 1994.  The upper management had already experienced the preliminary stages of this particular downsizing since it started at the top.  Over a four month period that started with an early retirement, it worked its way down the ranks until the actual Power Plant Men at the plant in North Central Oklahoma were going to be downsized on that one day.

The people that had taken the early retirement (which was available for anyone 50 years and older) had already left a couple of months earlier.  Since the downsizing was being decided from the top down, we soon learned that our Plant Manager Ron Kilman would no longer be a Plant Manager.  He was too young to take the early retirement.  I believe he was 47 at the time.

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by Chaz Bufe, compiler/editor of The Heretic’s Handbook of Quotations

Certain economic assertions keep popping up year after year, much in the manner of venereal warts. Here are a few of the most common assertions (in italics at the beginning of sections), along with some of the reasons they’re bogus:

* Stock ownership is so widespread that we all have a stake in the economy, that we all benefit from it. This is belied by the facts: the top 1% own 35% of stocks and mutual funds; the next 9% own 45.8%; and the bottom 90% own 19.2%. Other measures of financial wealth are even worse. The top 10% own 91.1% of business equity and 93.9% of financial securities. The top 1% own 42% of financial wealth; the next 9% own 43%; and the bottom 90% own 15% of total financial wealth.

Distribution of wealth is so lopsided in this country that according to Politifact the Walton (Wal-Mart) family owns more wealth than the bottom 41.5% of American families combined.

* It doesn’t matter if corporations are taxed, because they pass those taxes on to their customers. If this is true, one wonders why corporations so strenuously attempt to shift taxes to individuals. One might also wonder why, if corporations are people, according to a grotesque, still-in-force Supreme Court ruling (Pembina Consolidated Silver Mining Co. v. Pennsylvania – 125 U.S. 181 [1888]), these “people” should be exempt from paying taxes.

And while it is hard to believe, competition still exists in some sectors of the economy, and if corporations are taxed, they can’t automatically pass along the taxes to their customers. They can, to preserve or expand market share, shave their profit margins and executive compensation. Beyond that, not all individuals use all products. For instance, a tax on companies that produce corporate jets will affect corporations that produce and corporations that buy private jets, not the vast bulk of consumers. Further, consumers can choose to avoid passed-on taxes by buying goods from manufacturers who have trimmed their profit margins, by buying used goods, by reducing consumption, or simply by refusing to buy nonessential goods.

* Unemployment is a result of laziness. If this were so, why do unemployment levels vary so drastically over the years, and often change nearly overnight (as in 1929 and 2008)? Is it really the fault of employees’ laziness that employers shut down their businesses and lock their doors? Do employees really prefer losing their health benefits, pensions, and most of their income in favor of limited-time unemployment insurance checks? As anyone who’s ever suffered it knows, unemployment is a miserable, stressful condition, often accompanied by irrational shame. That shame–and endless repetition–is why well-paid corporate lackeys get away with uttering this cruel lie.

* Military spending is good for the economy. The U.S. government’s 2013 military budge is $682 billion, by far the largest military budget in the world. It’s more than the military expenditures of the next ten countries combined. and that $682 billion doesn’t even include veterans’ pensions, veterans’ healthcare costs, or the cost of the interest on military spending-incurred debt.

Somehow this is supposed to be good for the economy. Why isn’t it? Isn’t money flowing into communities with “defense” industries and military bases? Yes, it is. But that money produces nothing to meet human needs (food, housing, medical care, utilities, transportation, etc.). To put this another way, this massive expenditure of taxpayer money pays people and companies that contribute nothing useful to the economy.

In fact, the harm extends beyond this utter waste. Those who perform useful work are not only taxed heavily to pay for military spending, their tax dollars that go to the giant military make-work project devalue the money that’s left in their pockets. Rather than their spending the money taken from them on useful goods and services (which would stimulate demand and employment), the government spends their money nonproductively. That spending results in no additional useful goods or services. The amount of money in circulation remains the same, but there are fewer goods and services than there would be if taxpayers kept their money and spent it on their own needs. Military spending devalues the wages of everyone not on the military-industrial dole.

Military spending is not a boon to the economy. One could just as easily spend the $682 billion military budget on the mass production of ping pong balls and produce the same economic “good.”

Military spending is to the economy as a shot of methedrine is to the body. It produces a temporary feeling of euphoria, but at a high ultimate price.

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