Unemployment under Covid Capitalism: A Preventable Epidemic

Karyn Pomerantz, June 6, 2020

Introduction

There are millions of useful jobs that could improve our quality of life. The Covid pandemic requires the mobilization of millions to provide healthcare, food, outreach, and the production and distribution of protective gear. The US and other countries also need infrastructure overhauls to prevent collapsing bridges and further climate devastation. There are great deficits in education, transportation, housing, and health care that need to be addressed. Unemployment plagues workers, especially black, Latin, and young people. Why is there so much unemployment when our needs are so great?!

This post reports on unemployment, why it exists, how communism can prevent it, and the ways US activists fought it during the Depression in the 1930s.

Unemployment During Covid19

Before Covid19 hit the US, the unemployment rate was officially low with  a steep rise in jobs since the 2008 recession. This changed dramatically during the pandemic as businesses closed or laid off workers, and consumer spending dropped, leaving millions of people without a paycheck or adequate savings. 

Let’s look at some of these statistics.  Keep in mind that unemployment statistics usually undercount people. They don’t include people who give up looking for work, join the military, work part-time, are incarcerated, or young people who have never worked.  Doubling the reported rates often provides a more realistic picture. Black jobless rates are typically double those of white rates. Young people between the ages of 18-24 years experience rates as high as 50% around the world.

Unemployment statistics for April 2020 reported in the Washington Post from the Bureau of Labor Statistics:

Overall Unemployment

• the April unemployment rate was 14.7% 
• 40 million people had no jobs in June (Wash Post, 6-2-2020)
• 2 million would permanently lose employment (this number is expected to increase)
  
  Unemployment Rates by Demographic Categories
• 33% of all teens; unemployment rates are growing fastest for young people
• 19% of Latin workers
• 17% of black workers; in DC rates are 6 times that of whites
• 16.2% of women; black women lost more jobs than others
• 14% of Asian and white workers
• 13.5% of men
• 21% of people with less than a high school graduation
• 17% of high school grads
• 15% with some college
• 8.4% with a Bachelor’s degree or higher

Retail, construction, and hospitality industries account for most of the lost jobs and explain the high rates of unemployed black, Latin, and women workers. Major arts centers risk closures, and performers and athletes will lose valuable opportunities to advance their skills and careers. More educated white workers can hold onto their jobs and work from home in safer environments.

 Other economic factors exacerbate losing one’s income. Often the last hired and first fired, black and Latin men and women earn less than white men. White median wealth is $171,000 while black families have a median income of $17,150. Many black and Latin workers at the same time that black workers have lower rates of unemployment insurance. These unlivable racist economic conditions invade people’s bodies as well as their pocket books  Affluent white people in DC’s Ward 3 live 15 years longer than black workers in Ward 8 who also have higher rates of diabetes, asthma, and covid deaths due to stress, food insecurity, and toxins. These inequities have added to the anger the rebellions sparked by the murders of George Floyd and 1000 other deaths by police per year.

Capitalists and politicians also severely exploit immigrant workers by using them for cheap, hard labor and denying them unemployment insurance and social services under the Public Charge Rule. This means NO health care, NO food stamps, and NO stimulus checks. It DOES mean unbearable suffering.

Women

Women, especially black and Latin, have disproportionate losses compared to men. They make on average 88% of white men’s earnings (and much less for black, Latin, and Native women) and are more likely to hold lower paying jobs in healthcare, retail, and hospitality industries. Government job losses hit women the hardest; women fill 58% of public jobs, including schools. Furthermore, women’s role as mothers place them in precarious situations if there are no safe and affordable childcare options; 66% of women in the lowest paying jobs are the single or main earners for their families.

Why Unemployment?

With so much lifesaving work to do, why is there so much unemployment? There are several reasons. Unemployment is profitable under capitalism. Business owners at every level earn more money if they can reduce their labor costs by pushing fewer employees to produce more (think Amazon), earn less, and forsake benefits (think Whole Foods when Bezos cut health insurance for part-time employees). With so many people looking for jobs, the bosses have a desperate “reserve army” of labor to replace people who they fire for organizing unions, file grievances, strike, or who just cannot keep up. The capitalists use the threat of deportation to intimidate immigrant workers and divide workers with racism and anti-immigrant sentiments in order to direct anger against immigrant workers accused of “stealing” (miserable) jobs. While profits and inequality have skyrocketed, the federal minimum wage remains at $7.25 per hour and just over $2.00 an hour for tipped workers. Even the $15 an hour campaign woefully underpays people, forcing many to work multiple jobs. For example, staff at nursing homes often work at different sites to make ends meet, increasing the risk of spreading Covid19 to patients and colleagues. Covid19 has magnified and revealed the horror job insecurity causes as many are forced to choose between making an income or preserving family health. Many people favoring “opening the economy” just really need the money.

US Government Response

In the age of increasing economic inequity bolstered by tax cuts for the rich, and the ideas of personal responsibility and “government is the problem,” it is no surprise that the ruling class provides inadequate support to the newly unemployed. Stimulus checks of $1200 (for citizens) barely cover one month’s rent. Millions cannot access unemployment insurance that will stop July 31, and conservative politicians oppose extending or increasing aid claiming that workers earn more from unemployment insurance than income from their jobs. A right wing foundation wrote that the CARES Act (the main relief program) “introduces a lot of inequities and perverse incentives that damage the economy (WP, 5-22-2020, p. A15).”

Fighting Against Unemployment and Evictions in the 1930s Depression 

The US suffered a massive economic depression during the 1930s that dumped up to 28 million people into unemployment and hunger. As it started, President Hoover dodged the need for relief, claiming it would blow over (sound familiar?).  There were no federal poverty programs at this time, only private charities. The government claimed that employment depended on personal responsibility and told poor people to tough it out or enter the poor house where they could work for free. People blamed themselves, shamed by these widespread ideas.

As the unemployment rates rose, thousands massed in the streets attacking private charities, burning businesses, and blocking streets. The Communist Party (CP) and Socialist Party launched many demonstrations. The CP formed the Unemployment Councils (UCs) to provide leadership and an organizational framework to plan protests on the national and local levels. Impoverished veterans organized also, culminating in a march on Washington, D.C. The Unemployment Councils’ work shifted public opinion from blaming the victim to blaming the system. Many of their actions forced the government to provide aid. As evictions soared, Council members by thousands blocked the police from removing residents from their homes. At the first UC meeting with black workers in Chicago, a member described using direct action to stop an eviction :

“We spoke simply, explained the platform, the demands and activities of the unemployed council. And then we said, “Are there any questions?”…. Finally an elderly Black man stood up and said, “What you folks figure on doing about that colored family that was thrown out of their house today?… They’re still out there with their furniture on the sidewalk.” So the man with me said, “Very simple. We’ll adjourn the meeting, go over there, and put the furniture back in the house. After that, anyone wishing to join the unemployed council and build an organization to fight evictions, return to this hall and we’ll talk about it some more.” That’s what we did…everybody else pitched in, began to haul in every last bit of furniture, fix up the beds…and when that was all done, went back to the hall. The hall was jammed!  (International Socialist Review).”

NYC UCs moved 77,000 families back into their homes in 1933.

Communists relied on the rank and file to plan and take action, and united unionized and unorganized workers, arguing that greater employment prevented the bosses from using the unemployed as scabs or replacement workers. Most importantly, they made anti-racist demands central by including anti-discrimination policies in every struggle for jobs, housing, and relief. The UCs had a multi-racial composition that forged relationships between black and white activists. White members supported black voting rights and objected to a segregated union hall. As the movement developed, more people moved away from viewing unemployment as a personal flaw to a problem of capitalism, a very significant shift in a country defined by individualism and survival of the fittest. 

The militant protests occurred just 13 years after the Russian Revolution instilled fear in President Roosevelt and his ruling class cohorts that the US could also face a revolution. Staving off this potential threat, he enacted the New Deal programs that provided relief and jobs and created Social Security. However, these programs did not fill the enormous need for economic support, and racism further degraded them. Social Security did not cover farmers and domestic workers who were predominantly Mexican, black men, and black women. Roosevelt caved in to the southern democrats who wanted to maintain their power and wealth by continuing to exploit black workers for cheap labor. FDR also refused to sign an anti-lynching bill, again to appease the southern politicians and landowners whose votes he wanted, another example of liberal politicians supporting racist policies.

Today, we could follow this model of the UCs to organize the unionized and nonunionized, employed and unemployed together in militant action. The absence of organized labor in the rebellions today weakens our movement. Strikes for economic (wages and jobs) and political interests (defunding the police) could shut down and significantly disrupt the system. Some bus drivers in Minneapolis and NYC have refused to transport people to jail, actions endorsed by the transit union ATU 689. Black and Latin workers are key to this struggle because they work in transportation, food production, and sanitation. Their leadership is essential to making radical change because they suffer the brunt of racist attacks that give them a clearer lens about the nature of capitalism and a deep hatred of it. 

Communism, Socialism, and Unemployment

In contrast to the high jobless rates today, socialist societies wiped out unemployment by nationalizing industries and providing jobs for workers. They directed the workforce to improve social conditions like health and education, and opened employment to women whose labor had been relegated to the home.  Here are some examples from Cuba, the Soviet Union, and China. 

Cuba

In pre-revolutionary Cuba, 40% of the people were unemployed; 60 years later, the World Bank reported an unemployment rate of 1.64%. The literacy campaign employed millions of Cubans to teach reading and socialist principles, and achieved near universal literacy allowing Cubans to work. Everyone could access and use free health care in spite of employment status. 

Cuba pioneered community oriented primary care by establishing health centers, “polyclinics,” in neighborhoods staffed by physicians who lived above the clinics and provided office based care and home visits. The public health system prioritized maternal care with special hospitals for women with high risk pregnancies. Only four infants out of 1000 live births died compared to the US with six infants overall (World Bank) and eleven black infant deaths in 2017 (HHS). Thirty six Cuban mothers died per 100,000 live births in 2017 (WHO), a decrease from previous years but still high. Cuba is well known for educating 1000s of doctors deployed throughout the world to treat people caught in disasters and by covid today.

China

China’s unemployment rate stabilized at 3.6% before 2019, mostly in urban regions, before the corona virus outbreak when it rose to 4.3%, a similar rate in the US before the pandemic. The post-revolutionary Chinese government increased industrial production and redistributed land to property less agricultural workers. As in other socialist countries, China prioritized health promotion and disease eradication. The government mobilized millions of people to manually pick out snails that carried the parasites that cause schistosomiasis from thousands of waterways. Through education, outreach, allowing divorce by women, and eliminating prostitution and drug dealing, it also eliminated syphilis. Life expectancy rose from 35 years in the 1950s to 74 years in 2015, similar to US rates. Infant mortality rates dropped from 200 per 1000 live births in 1952 to 34 per 1000 in 1985. Rural communes arranged payment for health services and relied on the “barefoot” doctors to provide basic health care.

However, disparities between wealthier urban areas and poorer rural communities developed by 1999 with higher rates of immunization (96%) in cities compared to lower rates (78%) in the countryside. Infant mortality also varied from 12 deaths per 1000 live births in the more affluent areas compared to 52 per 1000 in the more impoverished. China’s privatization, free market policies reduced the amount of funding the rural governments had to allocate to health services. As unemployment increased, mortality rates increased.

Soviet Union

The vast majority of people who could work had jobs after the Russan Revolution. The USSR, economically devastated after imperialist countries sent troops to attack the new socialist republic, needed to increase industrial production and educate the population. The unemployment that existed in the early years was lowest for skilled workers and office staff. Women’s work opportunities expanded; currently women comprise half the workforce in Russia. They received six to eight weeks of paid maternity leave. The government banned work for children under the age of 14 years and allowed only four hours of work per day for teens older 14-16 years old. Working hours decreased over time as well, from ten hours per day before WWI to eight hours per day and six hours per day for those holding more dangerous jobs. By 1927, people worked seven hours per day. When the US and the capitalist world suffered severe unemployment during the Depression of the 1930s, Soviet workers had minimal joblessness. By the mid to late 1970s, the unemployment rate in the USSR was between 1.5% to 3% while the US’ rate was 6.5%.

Workers received generous social benefits including health and 14 holidays, two weeks vacation with an extra two weeks for people in harder jobs. Factory union committees organized libraries, literacy programs, schools, and publications to educate workers and enhance their cultural lives. 

Would communism make a difference?  

With a communist society, wages would be abolished. This is a critical difference from all other revolutionary socialist societies. Without wages there would be no need for a division of labor based on gender, so-called “race,” nationality or citizenship status. There would be no profit squeezed from people’s work. Racism and sexism will be effectively abolished. In fact, it would be outlawed as the Soviets had done. Without wages that stratify people into high income/high status jobs versus low income/low status jobs, there would be greater social equality. 

Local and central communist groups would determine the priorities for infrastructure projects and workforce based on needs rather than profit. People would be matched with jobs based on skills and interests, reducing the amount of boredom and alienation associated with capitalism. There would not be a division between mental and manual labor so workers would not be doomed to lower socioeconomic status or mind dumbing jobs. While scutwork will certainly exist, it could be shared more equitably. Education would allow less skilled people to train and pursue jobs that capitalism put off, such as medicine, science and the arts. In China, doctors were actually expected to mop hospital floors, and  housekeepers rounded with the medical teams to provide insights into patient concerns.

During emergencies, people could be mobilized to respond as China did during the anti-schistosomiasis campaign and as Kerala, India does today. Technology, such as robotics, would be used to benefit workers by making production easier and freeing up time for artistic and other interests. Communism means everyone has value and can contribute regardless of racial, religious, ability, age, citizenship, or gender categories. No one is disposable. 

The communist politics and ideology of sharing, helping people, community responsibility, multiracial unity, and workers’ power also apply today. Tens of thousands of people in the US are living many of these principles now. They have united across so-called racial and other demographic categories. The multiracial character of the protests spark fear in the capitalists and set the stage to create a better world. We need to see capitalism as the source of racism, the enemy of black, Latin, and white people. While many white people hold racist ideas, the vast majority did not create and do not benefit from a racialized capitalist society. We need to build on these new relationships, conversations, and joint actions to form organizations that can seize power.  We cannot stop at reforms, such as prison abolition or universal health care, demands unlikely to be won. We fight racism to decrease oppression and allow everyone to contribute their talents equity and liberation. Let’s continue to rebel and develop more social solidarity so we can abolish racism and capitalism everywhere.

Further Reading

Gregory P and Collier, Jr. I in The Soviet Union: Achieving full employment. https://nintil.com/the-soviet-union-achieving-full-employment/