Disposable workers: today's reserve army of labor

Monthly Review, April, 2004 by Fred Magdoff, Harry Magdoff

The NLRA was passed during an exceptional time in U.S. history, when the depression brought forth an unusual constellation of forces--including capitalists who were concerned about the viability of the system and a militant labor movement. Even though the law still exists, it has been subverted repeatedly by both government and bosses.

The Reserve Army--In the Open and Hidden

Although at the top of the heap among capitalist countries, the United States has--and indeed depends on--a large reserve army of labor. While the total size of the reserve army of labor in the United States and elsewhere is difficult to determine, there is information on the status of some of its sectors. First there are the unemployed and the underemployed. At present (February 2004) in the United States, there are over 8 million people actively looking for work (defined as having looked within the last four weeks) and officially considered to be unemployed. The "official" unemployment rate declined between November 2003 and January 2004, from 5.9 to 5.6 percent but not primarily because of new jobs. With only 33,000 more people working at the end of this three-month period, the main cause for the decrease in the official unemployment figure was that over 200,000 people stopped looking for work. There are over 2 million people that want to work but have stopped looking and they are not counted among the unemployed. There are also part-time workers that want to work full-time, approximately 4 million people. The total of underutilized and not utilized workers in the United States comes to around 14 million people--about 10 percent of the potential labor force.

There are many people that don't show up on most surveys of unemployed or underemployed. For example, the approximately 2 million U.S. prisoners are for the most part removed from productive employment. There is also evidence that some discouraged job seekers have gained disability pensions as a result of enhanced benefits and liberalized qualifications for programs for the disabled. Some workers permanently stop looking for work when faced with long periods of bleak job prospects. Downsizing companies encourage other workers to retire with the offer of early pensions or generous severance payments--over 21,000 workers at Verizon, 10 percent of its labor force, recently took financial inducements to retire (New York Times, January 11, 2004). They retire early and may receive private pensions, as well as Social Security retirement payments after reaching age 62, and therefore are not even considered "discouraged" workers. This group is not evaluated by most surveys, but an indication of its magnitude is that the proportion of U.S. men from 25 to 54 years old that say they are retired and not looking for work rose, from less than 6 percent in 1991 to over 10 percent in 2001 (Issues in Labor Statistics, U.S. Department of Labor, Bureau of Labor Statistics, Summary 03-03 September 2003). Germany, in an effort to reduce the embarrassingly high number of officially unemployed has made a novel offer to workers 58 and older. In return for signing a statement stating that they are no longer looking for work, they can continue to receive payments equal to unemployment benefits until eligible for a pension (Wall Street Journal, December 22, 2003). That's quite an innovative technique for reducing the official unemployment level and making the economy look better!