Double whammy spells more misery for workers: Behind Obama’s ‘jobs bill’ & austerity budget

No jobs means no future: youth gather for protest near Wall Street Sept. 17. photo: G. Dunkel

By Deirdre Griswold

Sep 22, 2011

The vast majority of the people in the U.S. depend on wages to get by. Only 7 percent of those who work full-time are self-employed. Farmers, for example, who a century ago made up almost half the population, now account for less than 1 percent. Vastly more people work for large corporations or retail chains than have their own businesses.

Fully 93 percent of those who work every day rely on that paycheck coming in. This figure shows the tremendous growth of the proletariat — people who have nothing to live on but their ability to work and thus be exploited by a boss.

Without that pay, wage workers are in danger of losing everything: their homes, being able to feed their families, access to health care, retirement funds, higher education for themselves and their children, even their mobility — most workers need cars to get to work. All these things have to be paid for with wages.

Keep this in mind when looking at the unemployment figures put out by the Department of Labor. In August, there was zero job growth. More than 9 percent of the workforce — adding up to 14 million people — have no jobs. Another 9 million people work only part-time, even though they want and need full-time jobs. Close to half of those completely jobless have been looking for work for more than half a year — at least 27 weeks.

These figures don’t even cover the millions who lost their jobs and have given up looking.

Many analysts consider these figures to be understated, but they do show that what has been called a “recovery” means nothing for the workers. The fact is that four years after the housing bubble burst and started a financial crisis, there has been no jobs recovery. Now the markets are heading down again and the prospects are even more ominous for workers.

Obviously, workers are in a terrible crisis — and not just in the United States. The same thing is true throughout the capitalist world. Unemployment is high and there is no relief in sight. In several European countries, half of all young people can’t even get started in the job market.

Wherever there is oppression based on racism and national origin — which means in all the imperialist countries — the figures on unemployment and poverty in these communities are dramatically worse.

Workers had hope in Obama, but got nothing

Workers in the U.S. have been hoping the Obama administration would come to their aid. They have seen Washington spend trillions of dollars to bail out huge banks and other financial institutions, even those responsible for such disasters as the mortgage foreclosure crisis.

Since the financial crisis of 2008, however, nothing has been done to set up a real government jobs program. In fact, just the opposite has happened. In addition to all the millions of jobs that have disappeared as private companies downsize and/or move their operations to low-wage areas of the globe, the working class is now confronted with millions of layoffs in the public sector. Governments at all levels — federal, state, municipal, county and township — are claiming poverty and cutting budgets for all kinds of social services.

This phenomenon — trying to force austerity down the throats of workers as a supposed antidote to the crisis — is being repeated across the capitalist world. The politicians — who have learned their tricks in parties totally beholden to the capitalist class — are fearful of offending their patrons by shifting even part of the state’s burden onto the shoulders of the rich.

They will stampede into their legislative seats to raise their hands for bailouts to billionaires, but they will find any excuse to avoid making the capitalists pay for the catastrophic failure of their system. This bloodletting of jobs in the public sector has only made the overall capitalist crisis of overproduction worse.

After three years of stagnation and decline, in which his popularity dropped in tandem with workers’ hopes of getting any relief, President Barack Obama finally gave a speech about jobs on Sept. 8. He followed that up with another speech on Sept. 19 about reducing the budget deficit.

No jobs, but jobless benefits — with a hook

Obama’s first talk was to push Congress to pass what he called the American Jobs Act. A telling feature of this bill is to continue extended unemployment benefits for up to 99 weeks. While, if passed, this would undoubtedly be welcomed by a lot of jobless workers about to have their checks cut off, it contradicts the idea that the act will provide many jobs.

For the “99ers,” people who have already maxed out of the time allowed for unemployment benefits but have not found work, this bill provides nothing.

There is also another side to the proposed extended benefits: recipients who get “training” from a company will receive only their unemployment checks for eight weeks, during which time the boss pays nothing for these full-time new employees.

The average unemployment check in 2010 came to less than $300 a week. This is significantly below the federal poverty level for a family of three. If workers get nothing but unemployment to live on for two years, they will likely exhaust any other assets they might have.

Tax breaks to small businesses

The premise behind the bill is that more tax breaks and other incentives to small businesses will encourage them to create new jobs. This is not a new idea. That was the rationale behind the $825 billion American Recovery and Reinvestment Act of 2009 and the Small Business Jobs Act of 2010.

Both became law, but they have had no effect on overall unemployment.

Obama in his talk called this bill a “$447 billion stimulus plan.” Some $105 billion would be spent on infrastructure projects, like schools and transportation, spread out over two years. Considering how badly the infrastructure has deteriorated and how many people are looking for work, that amounts to nothing more than a band-aid.

$50 billion a year wouldn’t cover the annual wages of 1 million construction workers — without even considering the cost of materials, the planning and administration of the projects, and other overhead, which always come to much more than actual wages paid. Meanwhile, there are between 25 million and 30 million unemployed and underemployed workers in this country.

Cutting ‘payroll taxes’ is attack on Social Security

More than half of the $447 billion price tag for this bill would come from reducing payroll taxes paid by businesses and individuals. However, the catch here is that payroll taxes, or FICA, are what both employers and workers pay into the Social Security Trust Fund.

If Obama wants to cut workers’ taxes, why not cut their income taxes? The federal government funnels hundreds of billions of dollars of general revenue to the Pentagon and also to big banks that perpetually suck up huge interest payments on government loans. Both Republicans and Democrats have agreed not to cut these money guzzlers.

What Obama is calling a “payroll tax cut” is really an assault on Social Security and Medicare. This huge pool of money, meant to keep workers out of abject poverty in their older years, was set up as a completely separate fund, not to be used for anything else. It was something that workers were entitled to and finally won through militant struggle.

Now the word “entitlement” is said with a sneer by reactionary politicians who owe their positions to corporate-financed election campaigns. The ruling class wants access to this huge amount of money, to “privatize” it, to draw it into the obscene speculation and gambling that especially characterize this phase of parasitic capitalism.

Next: Austerity budget will kill more jobs.