Radical economist Rick Wolff has a post on MR Zine examining recently released economic data and questioning whether the economy can really be said to be recovering if we look at the issue from the point of view of workers rather than capitalists. He starts with those workers lucky enough to still have a job:
The first set of numbers came from the US Department of Labor’s Bureau of Labor Statistics. They showed some remarkable facts about (1) US workers’ productivity — the physical quantity of goods and services produced per employed worker, (2) the compensation paid to US workers, and (3) the hours they actually worked. These numbers showed how the economy had changed from the first quarter (January-March) to the second (April-June) of 2009. The average number of paid hours worked per employee fell by 7.6 per cent, but the total output fell only 1.7 per cent. That was because the workers who had not (yet) lost their jobs were fearful, so they worked harder and faster doing some of the jobs previously done by laid-off workers. With fewer employed workers doing more, the BLS reported a gain of 6.4 per cent in the productivity of US labor.
For their harder, faster, and thus 6.4 per cent more productive labor, those still employed saw their money wages rise by only 0.2 percent from the first to the second quarter of 2009. When the BLS took into account the rising prices workers had to pay, their real wages (the goods and services they could actually buy) fell by 1.1 per cent. Taken together, these numbers show that employers got a huge increase in output from each employee, while what they paid to their employees imposed on them a decrease in the goods and services they could afford.
Speed up, reduced wages. What about the unemployed? How is the economy doing in terms of putting the fifteen million unemployed back to work?
The second set of numbers was collected and published by the US Federal Reserve; that set concerns “capacity utilization.” Roughly, these numbers measure the proportion of the nation’s capacity to produce that is actually being used for production. In July 2009, the US capacity utilization proportion in all manufacturing was 65.4, or roughly two thirds. Over one third of the tools, machines, equipment, factory and office space, etc. in manufacturing was idle. By comparison, the average rate of manufacturing capacity utilization from 1972 through 2009 was 79.6. The crisis is thus increasing our economic system’s huge waste — failure to make use — of a very significant portion of our nation’s productive resources. Idle capacity usually means deteriorating capacity. And this after a year of Bush and Obama “economic stimulus packages.”
Consider the meaning of this waste. Side by side with today’s 15 million unemployed people (not to speak of the underemployed), we have one third of our industrial capacity unemployed as well. Meanwhile massive social needs go unmet (rebuilding center cities, providing daycare, healthcare, and eldercare to millions, repairing decades of damage to the environment, and so on). The way this economic system works, we are supposed to wait until private enterprises see profits from rehiring the unemployed and utilizing the available capacity. Until then, we are supposed to watch and accept this system’s inability to combine unemployed people with unemployed resources to meet obvious social needs.