Five reasons we need socialism to solve unemployment

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Only 58 percent of adults have a job in the heart of global capitalism

By Ben Becker
September 29, 2011

The “official” unemployment rate is essentially worthless in assessing the state of the economy. Journalists use this rate—9.1 percent presently, or 14 million people—which only counts the people who have actively looked for work in the last four weeks. The real unemployment rate, counting those who have given up on the dismal job market, and those who are severely under-employed, is at least double the official number.

A better way to evaluate whether the economic system is working, and making the most out of society’s vast human resources and potential, is the employment-to-population rate. This rate takes into account the 29 million men and 47 million women that are not even counted in the “official” labor force.

For the ages of 20-64, only 77 percent of the population was employed in 2010. The overall rate (over age 16) has been stuck at 58 percent and is significantly worse for African Americans—51 percent.

These are the worst figures in 30 years. To put them into perspective, the country has roughly the same number of jobs today as it had in 2000, while the population has increased by 30 million over the same period. As a result, the economy would have to add around 18 million jobs to get back to the same employment rate as 2000.

What we are witnessing then is not only high unemployment, but a relentless trend of casting people out of the productive process altogether.

Even if Obama’s recently announced plan were to produce the 2 million jobs he promises—and it won’t—it would hardly make a dent into these long-term trends. The bill, which is unlikely to pass anyway, would come with devastating cuts to Social Security, basically forcing people to mortgage their futures to pay for the present.

What we’re dealing with is a problem far bigger than the White House and Congress. It is not fundamentally a problem of bad policies, nor can it be turned around simply by raising the taxes on the rich (although that would help).

The system of capitalism cannot resolve unemployment for several reasons:

  1. The unplanned economic system leads to periodic crises of overproduction. Competing with one another to control the market, the capitalists inevitably produce too much to sell at a profit, and so start to lay off workers to maintain their profit margins.
  2. Technology is used against workers, not for them. Nearly every technological advance is used to replace jobs; while the workforce shrinks, the remaining workers are expected to produce more. The working class is punished for its own productivity.
  3. The system requires a section of workers to be unemployed. If everyone had a job, workers would demand higher wages and would not fear being replaced. The capitalists actually aim for a 4% unemployment rate—which they misleadingly call “full employment”—but this amounts to 5 million workers out of a job.  
  4. The vast resources that could be used to employ idle workers are in the hands of a small number of capitalists. Because of the banks’ economic dictatorship, all the government does is give more and more concessions to these capitalists to make them feel more “confident” to invest.
  5. The capitalists only offer employment based on profitability. The capitalists will not spend their trillions of dollars in cash until they believe it can return a steady rate of profit for them.

These problems are all related to one another, and cannot be solved piece by piece. We have to put the operation of the economy on an entirely different basis.

There are tens of millions of people who want to work, or would be willing to go back to school to become trained in other fields if their jobs have become obsolete.

There are vast social needs in the country—in the fields of science, education, health care and infrastructure, to name a few—but since these are not immediately profitable enterprises, they are systematically neglected.

It is not utopian to demand a society in which its vast human resources are used to address its vast needs. It is not utopian to demand a society in which technological advances are used for the benefit of everyone, and in which workers replaced by machines are provided a guaranteed wage while they are re-trained for other work.

In fact, we need such a society to escape a future of increasing unemployment and impoverishment. Socialism—the public control and ownership over society’s productive resources—is no longer a question for the far-off future. It is now an elementary and basic demand.

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