Sinister attack on unemployed

Hundreds of thousands of workers in Washington State, among the eight million who have lost their jobs in the US since the recession, are now receiving letters warning them that their unemployment benefits could run out much earlier than they expected.

They thought they were entitled to 99 weeks of support, including 53 weeks of emergency unemployment compensation and 20 weeks of extended benefits. But it is looking increasingly likely that the newly-elected Tea Party influenced Congress is preparing to abandon the unemployed to their fate. With emergency benefits ending within days, those registering as unemployed will now be eligible for just 46 weeks of unemployment benefit – less than half the previous limit.

President Obama has talked of the danger that very high unemployment – currently running at 9.6% - is now “the new normal”, while senior economic adviser Paul Volcker warned that unemployment will remain high for a long time to come. The prospect of millions with no form of income looks set to become commonplace, and not just in America. One in five is out of work in Spain.

Tomorrow Britain’s Lib-Con Coalition will publish a White Paper expanding the meaning of its sinister threat that people who are in work will always be better off than those on benefits. Work Activity Scheme proposals to be outlined by Iain Duncan Smith, work and pensions secretary, could force long-term benefit claimants into unpaid manual labour on community work placements doing jobs like litter clearing and gardening.

With hundreds of applicants chasing every job in places like Merthyr Tydfil, the new scheme would give job advisers the power to require them to do community work for charities and local councils in exchange for the new universal benefit. With 1.9 million children living in a home with no working adult, the UK has 5 million people on out-of-work benefits and one of the highest rates of workless households in Europe.

The contraction of the global capitalist economy is irreversible, and Duncan Smith knows it. Whilst millions of employment contracts have been broken and millions more are about to be busted, he is talking about a profound shift. The Coalition plans to establish a new, punitive form of contract between the individual and the state. Just as in the US, benefits will be withdrawn, and wage levels driven down.

In Ireland, which is just a few months further down the track towards state bankruptcy, with unemployment at over 14%, wages in the public sector have already been driven down by 14% and in the private sector by 7%. That is what is planned for Britain.

Duncan Smith’s threat is clear: "I think most of the public think that progressively you send them signals. They have a bit withdrawn, then a bit more, then eventually to have to say you will eventually lose all your benefit.

"The signal will get round very quickly that you are serious about this. We may have to do it initially to some of the more recalcitrant people. But I have a view about human nature, most people once you start to show them the right way out I think most people move. Those who won't play get lost in the system at present and they infect everyone else."

The use of the term “infect” is particularly sinister and reveals the deeply reactionary, not to say totalitarian, thinking behind this government. These are ideological threats for sure, but they are formed by the reality of a worsening crisis. Protest or changing those at the helm of the state can’t reverse the fact that the economy is shrinking at a rapid rate.

Capitalist production must be replaced by a different way of doing things. People’s Assemblies are needed to take over the productive resources currently owned by investors grouped together in secretive private equity funds, and turn them from for-profit destruction of the eco-system to planned production for need.

Gerry Gold
Economics editor