Resurgence of Jobless Claims Signals Prolonged Economic Depression

Cover photo of European Central Bank Forum on Central Banking by Rev

By Mike Talavera

Last week marked the first sharp rise in applications for unemployment benefits since early October, jumping from 18,000 the previous week to over 743,000. The spike comes as the economy has struggled to bounce back since the crisis began in March, forcing senior government officials to recognize the inherent inequality of capitalist society.

At a bank forum virtual panel last week, Federal Reserve Chairman Jerome Powell said that the pandemic accelerated (rather than caused) existing problematic trends in the economy, like increasing automation and a growing telework industry, which were already pushing the lowest paid workers out of jobs and into poverty before 2020.

“We’re recovering, but to a different economy,” Powell said, a week before news of the spike in jobless claims.

While Powell may be correct that conditions for working people will have dramatically worsened by the time a vaccine for the coronavirus comes around, the US economy will still be the same imperialist economy as before with the same inherent and unavoidable contradictions.

The chaotic competition of capitalists inevitably leads to crises of overproduction, and during these crises it is the monopoly capitalists who benefit by absorbing the smaller capitalist companies who can’t weather the storm. That’s why, this month, Elon Musk of Tesla and Jeff Bezos of Amazon reported billions in profit while tens of thousands of small businesses have shuttered this year.

Repetition of this vicious cycle makes the monopoly capitalists grow even larger, giving them more to invest in better machinery and technology. They use these advancements to dominate their industries, allowing them to rake in more profits all while downgrading the number of jobs necessary to operate production.

Under imperialism, coronavirus vaccine or not, the future offers less and less to the majority of workers, who are forced to compete for the few low wage jobs available while having to pay more for basic necessities as monopolies dictate pricing through their control of the markets. On top of this misery, the state becomes more reactionary and cracks down harder on the people when they rebel against this attack on their livelihoods.

The bourgeois economists promise a recovery is just around the corner in 2021, but any meager recovery will be for the imperialists, not the workers. The imperialists anxiously wait to watch their stocks increase in value again and their profit margins soar. Meanwhile, the workers watch as their jobs are taken away and their families are evicted from their homes. 7.3 million are expected to lose unemployment benefits by the end of the year as the Pandemic Unemployment Assistance expires.

The coronavirus vaccine will bring relief to many who are vulnerable to COVID-19, but it will not cure the ills of capitalism, which get worse with every crisis. Socialist revolution is the only cure for the sickness of US imperialism—it is time to stop hoping that the economy will turn around and to start preparing for the hard struggle ahead.