March jobs growth dominated by low-wage sectors
Despite a better than expected jobs report for the month of March, one year after the onset of the coronavirus pandemic, the US remains blighted by high levels of unemployment, including a stubbornly high number of long term unemployed.
The US Bureau of Labor Statistics reported Friday that employment rose 916,000 in March, a number boosted by large numbers of hotel, restaurant and other service workers returning to work as states moved rapidly and prematurely to remove COVID-19-related restrictions. Employment in education also rose significantly as the Biden administration moved ahead with the forced reopening of public schools.
The official unemployment rate fell to 6.0, still well above the pre-pandemic figure. However, a more realistic measure of the unemployment rate, which takes into account so-called discouraged workers and those forced to work part time who want full time work, stands at 10.7 percent. Known as the U6 rate, this figure gives a more accurate picture of the degree of social distress.
Reflecting the reentry of lower-paid workers into the labor force, average hourly earnings fell slightly in March.
In another indication of the depth of the social crisis, more than 4.2 million have been out of work for more than six months, and that number rose slightly in March from the previous month.
The largest job gains in March came from leisure and hospitality with a 280,000 increase. Bars and restaurants added 176,000 jobs, while arts, entertainment and recreation saw 64,000 new hires. These three sectors, typically low-wage and seasonal, accounted for well over half of the March job gains.
Local, state and private education added 190,000 jobs in March as schools reopened in cities across the US under the pressure of the Biden administration and Democratic Party politicians, who see the schools as a child care service for potential workers. This homicidal policy will only serve to add new fuel to the pandemic, which despite vaccinations, is surging in Michigan and a number of other states.
Construction added 110,000 jobs in March, while manufacturing added 53,000. Manufacturing is down 515,000 jobs since February 2020. Altogether, through March the US economy is still down 8.4 million jobs since before the pandemic.
While some economists predict that April will also show strong employment gains and an optimistic report by the Wall Street Journal predicted monthly job gains averaging 500,000 for the rest of the year, that would leave overall employment below pre-pandemic levels. According to the Federal Open Market Committee, a return to the 3.5 percent unemployment rate prior to the pandemic would take until the end of 2023 in the unlikely event there are not intervening economic shocks.
Another measure, the labor force participation rate, which measures the percentage of the population employed or actively seeking work, was little changed in March at 61.5 percent. That compares to the pre-pandemic level of 63 percent. The number of workers forced to work part time who wanted full time employment stood at 5.8 million, 1.4 million higher than February 2020. The number of discouraged workers stood at 523,000, unchanged from the previous month.
The release of the jobs report follows the publication of the Department of Labor report on weekly unemployment claims that showed an increase of 61,000 state claims from the previous week to 719,000. This marks more than one year of historically unprecedented numbers of new unemployment filings. In addition, there were 237,025 new claims filed under the Pandemic Unemployment Assistance program that provides assistance to contract and self-employed workers not covered by regular unemployment benefits.
In the face of the rising employment numbers, Federal Reserve Chairman Jerome Powell rushed to reassure markets that the cash spigot would be left open despite signs of an improving economy. The US central bank has been propping up equities markets through the purchase of $120 billion in bonds each month while keeping interest rates near zero. Were this flow of money to be stopped or even slow down, the inflated stock market would likely crash.
The precarious nature of the financial boom was illustrated earlier this week by the stock selloff around the collapse of investment firm Archegos Capital that resulted in massive losses for major banks. The degree to which the failure of even a relatively small firm could threaten to spark a panic in the markets testifies to the highly leveraged and unstable character of the world financial system, inflated by the infusion of ultra-cheap money.
In a sign of continuing social distress, food banks report no let-up in demand. According to a local news report, the Alameda County Food Bank in the San Francisco Bay Area is continuing to see high demand. In March 2020, at the start of the pandemic, the food bank distributed 3.2 million pounds of food. In March 2021, that number was 6.0 million. The food bank went from helping one in five residents of the county to rising over the course of the past year to one in four.
At the Mission Food Hub in San Francisco, donations are collected for farm workers. It has gone from distributing food to 300 families a year to over 9,000. "The pandemic has caused them to get COVID and they can't work. And when they can't work they get no money. They don't have savings and 401Ks," organizer Roberto Hernandez told KTVU News. "You have people who lost their jobs a year ago. And they won't be able to go back to those jobs because a lot of those businesses are gone."
According to a report released by the Georgia Food Bank Association, an additional 344,000 residents of the state have been forced into food insecurity since the start of the pandemic. The report said that 1.7 million people in the state face food insecurity, including 562,000 children.
Nationwide food bank network Feeding America projects that 1.4 million New York City residents will struggle to secure adequate food this year. Enrollment in food stamps had increased 12 percent to 1.66 million city residents as of January.
Food Bank for New York City, which distributes food through a network of 1,000 food banks and charities, has seen a 61 percent increase in demand over the prior year. Zac Hall, vice president of programs for the nonprofit, told the Wall Street Journal, “I don’t have a crystal ball, but I think the same level of response that we have today is going to at least be needed for the next couple of years.”
Growth in class struggle in the US pits workers against the pro-capitalist trade unions
There are a number of expressions of a significant growth of the class struggle in the United States, which pose fundamental questions of perspective for the working class.
At Columbia University, 3,000 graduate students are fighting against “COVID-19 austerity” and are demanding decent pay, health and child care benefits. In Worcester, Massachusetts, more than 700 nurses have been on strike for more than four weeks against unsafe staffing ratios in the midst of the coronavirus pandemic. These ongoing strikes were joined this week by important sections of industrial workers, including 1,300 workers at steelmaker ATI in the northeast US and 1,100 miners at coal company Warrior Met in Alabama.
These struggles are a component part of a growing movement of workers internationally, including a one-day general strike against a pay-rise cap in Belgium, a four-day strike by 2,000 Amazon workers in Germany, a strike by 2,000 coal miners in Bosnia and Herzegovina over unpaid wages, and a planned walkout of primary school teachers against school reopenings as the pandemic surges in France.
This is only an initial expression of an enormous growth of social antagonisms throughout the world as a result of the ruling class response to the pandemic. The subordination of public health to the profit interests of the rich has led to more than 2.8 million deaths globally, including more than 560,000 in the United States alone. At the same time, the pandemic was used to orchestrate a historically unprecedented bailout of the rich, which is being followed by a massive restructuring of class relations to force workers to pay for it.
Every struggle of the working class raises directly the reactionary role of the corporatist trade unions, including the AFL-CIO in the US, which serve to suppress the class struggle and, when they cannot avoid a strike, to isolate and defeat it. The “unions” intervene not on behalf of the workers that they falsely claim to represent, but on behalf of management against workers.
At Columbia University, the United Auto Workers, which covers graduate students, is working to keep the strike isolated from graduate students at NYU only a few miles to the south, who are in the same local. Last month, the president of the UAW local revealed that they had planned to shut down the strike before a strike vote at NYU. The UAW is doing nothing to mobilize auto workers behind the graduate students and everything to prevent them from even knowing about the strike.
Meanwhile, the UAW is starving graduate students out on the picket line with a meager $275 weekly strike pay, in spite of the fact that the UAW controls a strike fund of $790 million.
The Massachusetts Nurses Association (MNA), the largest state organization of the National Nurses United with 123,000 members, is isolating the 700 Worcester nurses while not providing any strike pay. Instead, the MNA is forcing nurses to beg for charity: it is running a Venmo account to receive donations from the public to pay for nurses’ living expenses.
As for the ATI and Warrior Met workers, the United Steelworkers and the United Mine Workers are using the tactic of an “unfair labor practice” strike to avoid raising any concrete demands, and to allow the union to shut down the strike as soon as possible under the pretext that management is “bargaining in good faith.”
Over the past year, the executives that operate and control the AFL-CIO have played an absolutely essential role in enforcing the homicidal policy of the ruling elites. The teachers unions—the American Federation of Teachers and the National Education Association—have been instrumental in forcing a reopening of schools against overwhelming opposition from both teachers and parents. Local teacher unions have forced through reopening agreements by forcing teachers to vote on a fait accompli, as in Chicago and Los Angeles, or by not allowing them to vote at all, as in Philadelphia and Detroit.
The United Food and Commercial Workers union and its subsidiary, the Retail, Wholesale and Department Store Union, have kept meatpacking workers on the job even as more than 50,000 in the United States have become infected and at least 286 have died. In the auto industry, the UAW is not only keeping workers on the job but forcing them to work 50, 60 and even 80 hours per week, while covering up all information on the extent of infections and deaths.
The word “union” conjures up images of an organization that defends workers against the deprivations of the companies, or at least one whose fate is somehow bound up with its ability and willingness to defend workers’ standard of living. This, however, bears no relationship whatever to the present unions. They function as labor syndicates, controlled by wealthy executives whose incomes move in inverse proportion to the fate of workers.
Within every major national organization in the AFL-CIO, there are literally dozens, and in some cases hundreds, of bureaucrats at both the national and local levels who earn more than $100,000 per year, many times more than the workers in the unions. Top executives have incomes that place them in the top 5 or even top 1 percent of income earners in the US.
Stuart Appelbaum, the president of the relatively small RWDSU, which is campaigning for recognition at Amazon, made $344,464 last year, and secretary treasurer Jack Wurm made $324,022. In the RWDSU national office, there are 29 staffers who “earned” more than $100,000 last year, and the union spent more than $6 million on salaries for the national office alone.
Randi Weingarten of the AFT made $564,236 in total compensation for the fiscal year ending June 2019, according to the AFT’s IRS filings. The national office received more than $253 million in receipts and spent more than $238 million, including $43.75 million on salaries and zero dollars on strike benefits last year. Fully 234 people in the AFT national office alone made more than $100,000 during the union’s last reporting period, and 28 made more than $200,000.
The Teamsters union has more than 200 officials on its payroll making more than $100,000 a year, and ten making more than $200,000, including President James Hoffa ($387,000).
As the unions’ dues base has continuously shrunk as a result of their own betrayals, the executives have resorted to control of strike funds, pension funds and even ownership of corporate stock in order to finance and supplement their income. This directly ties the financial status of the organizations and the executives who control them to the profitability of corporate America and the performance of the stock market. They fear a movement of the working class not least because it would threaten their own financial interests.
The union bureaucracy has shared in the looting operation carried out by Wall Street during the pandemic. According to the UAW’s latest federal financial filings, for example, its assets increased by $31 million last year, and the union shelled out tens of thousands of dollars for trips to resorts and casinos for its top bureaucrats, hundreds of whom earn more than $150,000 per year. In recent years, the UAW has been exposed as an organization run by corrupt gangsters who steal workers’ dues money and accept bribes from the companies in exchange for ramming through concessions contracts.
The unions are emerging more and more as a critical instrument of bourgeois statecraft. The unprecedented intervention into the unionization campaign at Amazon by Biden and the Democrats, and even right-wing Republican Marco Rubio, reflects the intense fear within ruling circles of the growth of the class struggle, and their calculations that this can be blunted by putting workers under the guardianship of the AFL-CIO and byzantine US labor law.
Under conditions of growing commercial and military conflict between the US and its rivals China and Russia, the unions are viewed as a means of tying the working class to the capitalist state and its war preparations.
This year is the fortieth anniversary of the betrayal by the AFL-CIO of the PATCO air traffic controllers, who were fired by President Ronald Reagan in a deliberate provocation. The attack on the PATCO workers was preceded by an agreement from the AFL-CIO that it would oppose any broader mobilization of the working class to defend them. This was followed by a series of struggles that were systematically isolated and defeated with the collaboration of the unions. This was a key turning point, not just in the US but around the world, in the complete integration of the unions into the structure of corporate management.
The expansion and unification of the struggles of the working class requires the formation of rank-and-file factory and workplace committees, completely independent of the pro-capitalist trade unions. Such committees are the form through which workers can advance their own demands, including emergency measures to stop the coronavirus pandemic, an end to the unsafe reopening of schools and workplaces, with full compensation for workers and small businesses.
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