By Henry Melo
The U.S economy has officially been recovering from recession since June 2009. Until 2013 though, recovery has been slow, uneven, and uncertain, with low GDP growth – between 1.5-2.5% – and high unemployment rates – slowly dropping from 10% to around 7%.
Currently, even if things are not developing as steady and vigorous as analysts, the government and businesses wished, it appears that the recovery is a fact. Yes, it is the weakest post-World War II recovery (see graphic), but still, the economy is growing at a 2.8% rate, exports are increasing, families are consuming more, house prices are rising again, unemployment has dropped to 6.7% and the federal government deficit has dropped from 9 to 4% of GDP.
Considering the international scenario, the U.S economy has managed to emerge from the 2007-8 recession faster than Europe. Over there, most countries are still seeing close to 0% growth rates, high unemployment, declining wages, and austerity measures imposed by the Troika. Latin American economies are also facing anemic growth levels and China, the only country with considerable growth, has been decelerating to around 7%.
Imperialism and Austerity: the Secret of U.S Recovery
The current economic recovery was not spontaneous, or coming out of nowhere. On the contrary, it´s been the result of a deliberate policy from the U.S. ruling class – through the Obama administration – to do whatever was necessary to make workers pay for their crisis.
The first initiative was to reorient U.S. foreign policy from “boots on the ground” wars and military interventions, towards economic control, political pressure and diplomatic deals, as privileged ways to secure the interests of American companies abroad. This approach allowed the U.S. ruling class to lower their military expenditures, while still expanding their economic control over Afghanistan, Iraq, Libya, Tunisia, Egypt and other Arab and African countries. In Europe, the mechanism was economic “agreements” signed by countries in crisis – Greece, Portugal, Spain, Ireland, and others, which allowed the U.S to lend money, profit from these loans, and even more: impose austerity measures through the IMF. The same pattern can be observed in the recent intervention in Ukraine and the resulting crisis with Russia: the U.S and Europe are trying to isolate Russia in order to increase their presence in former USSR republics and, therefore, make it easier to recover from the economic crisis.
The second initiative was to implement austerity measures internally. The Obama administration managed to pull off the idea that everybody should give their own “share of sacrifice” so that the U.S could “cut down expenses” and recover from the crisis. With this rhetoric, Obama justified the budget cuts to education, healthcare and other public services; imposed concessionary labor contracts to workers, freezing wages and increasing contributions to pensions and healthcare plans – all agreed with the union leadership bureaucracy. At the same time, Obama implemented restructuring plans to rescue companies and banks from bankruptcy, and make them profitable again.
The result of these combined “efforts” is that on the overall, it seems that the U.S is in a better position than other imperialist countries to fight for its supremacy worldwide, and that internally the U.S. ruling class has managed to overcome – or bypass – the main obstacles on the way to recover their profit rates.
While Big Businesses Profit, Workers Struggle
But the recovery hasn’t been the same for everyone. Big companies, banks and investment funds are profitable again, government has seen cash flow back into their budget, but workers are still struggling to overcome the consequences of the recession.
Corporate earnings have risen at an annualized rate of 20.1% since the end of 2008, but workers´ income inched ahead by 1.4% annually over the same period. There hasn’t been a period in the last 50 years where these trends have been so pronounced. Figures released this year show that corporations pulled in a record $1.68 trillion in after-tax profit in 2013.
At the same time, around 10.5 million americans are currently unemployed. Those who do have jobs, have seen their wages’ purchase power shrink. 55% have no retirement plan, and 15% of the population is poor. College students have an average student debt of $26,000 each, and the total student debt in the U.S has now reached $1 trillion dollars! And the numbers go on… But what is behind the numbers is that the current recovery, as all capitalist recoveries, comes at the expense of the majority of the population to benefit the ruling class.
Now it´s Time to Fight for $15 and to Expand Workers´Rights!
During the recession, there have been many struggles against austerity measures and the attacks against workers´rights. We have seen the emergence of the immigrants movement, that is fighting against deportations and for legalization for all; workers´ mobilizations and strikes fighting for fair labor contracts; students and teachers demonstrating against fee hikes and budget cuts; the Occupy movement, questioning the wealth of the 1% as compared to the majority of the population, and many other movements.
It is important to learn from the successes and failures of these movements, and to elaborate a critique of the many false leaders that led them to compromise with the Obama administration. We must also keep fighting against all the attacks imposed by the government and big business against workers. But it´s now time to prepare more offensive struggles, not only defensive ones. It´s time to end the rhetoric of “shared sacrifice” and demand better living and working conditions for workers and the majority of the population. It´s time to fight to increase wages and expand workers rights, since big companies already have their pockets full of money again.
“It´s time to fight to increase wages and expand workers rights, since big companies already have their pockets full of money again”.
The fight for a $15 minimum wage can be an important step in this direction. 3.6 million workers are paid the federal minimum wage ($7.25), which has lost 30% of its purchasing power in recent decades. It was last raised in 2009 and since then only 19 states have set their minimum wages slightly above the federal amount. The minimum wage is an important way to distribute wealth, since it affects not only low-wage workers who directly earn it, but also creates pressure to increase wages in general.
Workers feel that they are working too hard but not making enough money to provide for their families. They realize that even by working two jobs and getting home exhausted, they still have to struggle to make ends meet. That´s why the “fight for 15” campaign, and others nationwide, have had a lot of support among workers and community. Thousands of workers have joined demonstrations and rallies in different cities across the country to demand a $15 minimum wage. This was one of the key issues that helped elect socialist Kshama Sawant for Seattle city council last year.
Avoid the Ballot Box Maneuvers
If workers’ demand for a decent wage is more than legitimate, the same cannot be said about the opportunistic maneuvers that Obama, the Democratic Party, and Union leadership bureaucrats are doing with the minimum wage.
Since there are mid-term elections this year, Democratic Party politicians and their union supporters want to use the push for a higher minimum wage as a way to boost their votes in the elections. This is the reason why Obama has been talking more and more about raising the minimum wage and has passed a $10.10 minimum wage for federal employees.
The same has been happening in different states and cities. In California, state legislature and governor Jerry Brown recently passed a proposal for a $9 statewide minimum wage starting July 1st 2014, and $10 in January 2015. San Francisco Mayor Ed Lee says he supports the $15 minimum wage and is pushing to pass this proposal in SF. In Oakland, unions such as SEIU and nonprofits are organizing the “Lift up” Oakland campaign, demanding a local $12.25 minimum wage.
It is important that workers, activists, combative unions, movements and socialist organizations are aware of these demagogic maneuvers, so that they can fight for their fair demands without being fooled.
Let´s join the rallies and demonstrations that demand a $15 minimum wage, but let’s not give an inch of support to the Democratic Party politicians and union leadership bureaucrats that pretend to defend it just to get more votes in the upcoming elections.
 Gross Domestic Product – The output of goods and services produced by labor and property
located in the United States. GDP increase is considered as a measure of economic growth.
 This number is only partially accurate, since about 36% of all unemployed Americans, or 3.7 million people, fall into the category of the long-term unemployed who have been unable to find a job for 27 weeks or more, even though they are still actively looking – http://www.theguardian.com/business/2014/apr/04/us-adds-192000-jobs-march-unemployment
 Troika – Nickname given by European workers to the strict coordination between the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission (EC) to impose austerity measures for countries facing economic crisis.