Forum Post: The Crisis Persists By Richard Wolff

The latest employment report (for July 2012) from the Bureau of Labor Statistics (BLS) in Washington documents the utter failure of the political establishment to respond effectively to the crisis that began in December 2007. Unemployment remains over 8 %, more than 50% higher than it was in 2007. The U-6 figure published by the BLS that adds to these unemployed the numbers of marginal workers (those who gave up looking for work) and the part-timers who want full-time work has returned to 15% of the labor force, nearly 20 million Americans.

Perhaps the most important statistic was the 1.7 per cent increase in average wages for US workers over the last year. That is significantly below the rate of price inflation over the same year period. In other words, wages of US workers bought fewer goods and services than a year ago. Given that workers are also reducing their debts (banks are refusing to lend to them), this means that the demand for goods and services is shrinking. That means less demand for workers. And that reinforces the persistence of economic crisis. Obama and Romney will blame each other while Republicans and Democrats manage to do nothing significant.

Persistent crisis condemns workers to suffer falling real wages. That, in fact, is the actual “solution” capitalism produces for its own crises. Eventually, real wages may decline far enough that capitalists will see profit in resuming significant hiring. But real wages have not yet fallen far enough for them despite 5 years of crisis. So the system condemns most people to wait, watching their standards of living decline.

Thus the social devastation of long-term economic crises (lost homes, lost skills, depressed workers, deepened anxiety, interrupted or ended educations, broken families and households) accumulates alongside their colossal wastes (tools and equipment in offices, stores, and factories gathering dust and rust). The questions that haunt every corner of US society: (1) how long will the people tolerate this crisis and the system that imposes it and (2) what political forms will the end of that toleration take?

http://rdwolff.com/content/crisis-persists-blog