Workers ask: What 'recovery'?

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The mainstream media call it the most impressive economic recovery of the post-World War Il era. Reagan, we are told, has put the country back on its feet-on the road to greater economic growth and stability. Is this really the case?

After the deep recession of 1980-82, the U.S. economy did show signs of "recovery."

The 1984 gross national product, for instance, grew at a rate of 6.75 percent, the highest growth rate since 1951. The rate of inflation was kept at 4 percent.

But this hasn't been a recovery for the average working person in this country. The slight business upturn, which saw real profits double from 1982 to 1984, came at the expense of the working class.

In 1982, 33 percent of the workers involved in contract negotiations had their wages frozen. In 1983 this figure increased to 50 percent. In addition a large percentage of workers were forced to take actual wage cuts.

In 1983 the average weekly U.S. wage was $172.93. In 1984 it dropped to $172.41. Yet in 1967—17 years earlierthe weekly wage was $184.83. (All of these figures are based on 1977 real dollars in order to permit a valid comparison.) These averages, however, conceal the growing differential between low and high incomes.

The mainstream media have also heralded the fact that the official U.S unemployment rate is now "only" 7.2 percent. This ignores the large number of "discouraged" workers no longer counted in the statistics and the even larger number who have been forced to take part-time or minimum-wage jobs.

Even official unemployment statistics show a worsening situation in major industrial areas and reveal a dismal situation for Blacks, Latinos, women, and youth. The unemployment rate for Black youth, for example, is now over 40 percent.

In early April the Congress passed a bill that would gradually eliminate the 26-week supplemental unemployment benefits for 340,000 people. In 1983, 26 million workers were unemployed at some point, but only 39 percent received any jobless benefits. With the new unemployment legislation, several million more will be without a job, with little or no hope of finding one, and with no unemployment "security net."

One-third of the small farms are going bankrupt. Home and farm foreclosures are on the rise, and social services are being severely cut back.

Fragile character of upturn For the time being, the 1983-84 upturn has allowed the media and the government economists to mask the deep underlying crisis of the U.S. economy. The spectacular rise of the U.S. dollar on the international money markets has also contributed to the mistaken notion that the "recovery" has put the economy on the road to susSOCIALIST ACTION MAY 1985 tained stability and growth.

During the past 18 years, since the end of the postwar economic "boom" there have been three major economic recessions: in 1970-71, 1974-75, and 1980-82. Each recession has been deeper than the previous one. In no case has the upturn signified any real recovery of the economy. The Reagan "recovery" is no different.

Take the high value of the U.S. dollar today, for example. Far from reflecting an increased strength of the U.S. economy, the artificially inflated dollar reveals that a major dislocation of the economy is in store for the future.

The "strong" dollar is essentially the result of the high U.S. interest rates, which have siphoned gigantic sums of capital from all corners of the globe to the United States. It is estimated that speculative capital amounting to $850 billion has been attracted to the United States in search of a higher rate of return.

This influx of "eurodollars,, "petrodollars" and foreign currency into the United States has greatly helped the lapse.

faster, at the rate of $27 million an hour.

in an ever ascending spiral.

1974) clearly illustrate:

close of World War II....

deep depression....

tral bank aided the victims of the Herstatt disaster.

greater and so is the leverage, here and abroad... U.S. Treasury to finance the skyrocketing budget deficit, particularly the exorbitant allocation of military expenditures. (Pumping up the arms economy has been one of the major means of bringing the economy out of the postwar recessions.) But this is just a short-term "fix."

It is also fraught with grave perils.

Just as easily as this foreign capital floated into the United States, it could leave the country tomorrow in search of more profitable markets. Analysts estimate that up to $550 billion could be immediately removed from U.S. financial markets, causing unprecedented chaos in the economy.

Future catastrophes aside, however, the "superdollar" has already caused enormous difficulties for the U.S. economy. Not only are industrial and farm producers finding it increasingly difficult to sell their products abroad (the export price of U.S. goods has nearly doubled), they are facing greater competition at home from low-cost imports.

The foreign competition has forced capitalists in this country to lower their prices-hence the low inflation ratebut this in turn has placed a great strain on the corporations' profit margins. The number of bankruptcies has reached record levels over the past two years, as smaller corporations can no longer compete in the marketplace.

The ruling rich cannot allow their profits to be squeezed down. They are therefore compelled to continue their attacks on the American working class, the producers of all wealth, in order to offset their declining profit rates. And they do this by demanding still greater concessions from working people.

Moreover, the high interest rates that U.S. banks are currently enjoying are actually a threat to the stability of the banking system—like a narcotic "high" of a drug addict.

New recession in sight The 1983-84 business upturn brought the economy to the point of producing at 80 percent of its productive capacity-hardly an economic "miracle."

But today, with a new slowdown in production already underway, economic observers are warning that a new recession may be upon us as early as 1986.

In this context the corporations are asking for even greater concessions from the workers. Not satisfied with the superprofits exacted from the previously granted concessions (the three auto giants registered their all-time high profit level of $10 billion in 1984), the ruling class is pressing for more takebacks.

One recent example of this increased assault on the gains of the labor movement is the campaign for a lower minimum wage for teen-age workers. A bill introduced by the Reagan administration—with the support of key Democratic Party leaders-—calls for a minimum wage of $2.50 an hour for workers 16 to 19 years of age, instead of the $3.35 an hour minimum.

A recent Wall Street Journal editorial complained that "wages in the United States are too high for the economy to be competitive in the long term."

And the editorial concluded, "What we need is permanent reductions in the wage levels of U.S. workers."

This is what the rulers in the corporate board rooms and in the Congress have in store for working people. No matter how great the concessions granted, these will never be sufficient to halt the attacks, let alone pave the way for an economy "recovery."

These are the bitter truths of the "debt economy,' which a growing number of workers are beginning to understand.

Dear editor, Steve Zeluck, an editor of Against the Current (a socialist quarterly published in New York), died on March 1 in New York City. Steve's death was the result of mesothelioma, an incurable cancer caused by exposure to asbestos when he worked in the U.S. Navy shipyard in Philadelphia at the beginning of World War II.

From the time he joined the Young People's Socialist League (Fourth International) in the 1930s, Steve remained committed to the advancement of revolutionary Marxist theory and practice in the United States.

A memorial meeting was held on March 24. Contributions in Steve's memory should be sent to Against the Current, 45 West 10th St., Apt. 2G, New York, N. Y. 10011 A reader, New York

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"Each recession has been deeper than the previous one."

Laid off factory workers can always find jobs in America apidly growing service sector.

Steve Zeluck 1922-1985