MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
BuzzFlash at Truthout isn't breaking any new economic theory in stating that corporations and the 1% -- incuding the increasingly dominant Wall Street financial stranglehold on the economy -- are actually quite happy with permanently high (as long as it doesn't cause political de-stabilization) unemployment.
1) The most important value to high unemployment to the 1% is in the ever-increasing profit margin that comes from lowering the cost of labor by decreasing salaries and benefits. This result from competition for jobs among a group of desperate employment seekers is that they have no choice but to accept low-paying jobs.
Therefore, while the media likes to use the benchmark unemployment statistics as a sign of the economy "improving" if the government figure goes down, the 1% actually sees its lopsided share of US assets increase when the unemployment figures are higher and wages lower.
This reality, largely ignored by the mainstream media, is of course facilitated by the globalization of jobs to lower cost (often slave wage) settings, devaluing the US labor market even further.
A corporation that may best illustrate this is the favorite of many progressives: Apple. Apple, as a New York Times series revealed awhile back, ruthleslly contracts overseas for labor at the lowest possible cost. According to Robert Reich, only 6% of the cost of IPhone production expenditures is spent in the US.
Apple doesn't lower its prices to reflect lower labor costs, either. It sits on tens of billions of dollars in cash profit, while selling overpriced trendy, innovative hi-tech products, relying on the consumer to pay the higher prices due to its brand identity.
2) By forcing US laborers into lower-paying jobs with reduced benefits, the 1% profiteers are forcing an increase in debt among the working class and unemployed. This debt is then charged at interest rates such as credit cards, which can easily reach around 30%. This is one of the fundamental Wall Street financial expectations: there will be increasing workers who need to debt at usorious interest rates to survive.
Of course, the debt servicers make millions of dollars in bonuses at the expense of the decreasingly paid worker. (The salary of American workers has been stagnant for decades, adjusted for inflation.)
3) Living paycheck to paycheck -- and if a worker has any spare money, receiving literally .01 interest in a savings account -- laborers have virtually no funds to support political candidates of their choice. This leaves the campaign finance arena mostly to the likes of the Koch brothers and other billionaires. Given that national and most statewide (and even congressional) elections are hashed out over television and radio, the men and women with the million and billion dollar bottom lines can write the checks that pull the strings on what has largely become the appearance of a democratic process -- but is in actuality a blended oligarchy.
4) Higher unemployment and lower wages means that corporations can "re-tool" their products to a more affluent market that further increases their profit margin, since the wealthy tend not to be bargain shoppers.
5) Over the years, we have read how some 1% figures, such as Steve Schwarzman (who threw a 60th birthday party in the New York Armory in which he reportedly paid Rod Stewart $1 million to sing for him and his well-heeled) pals, bemoan their critics.
Venture capitalist Tom Perkins doubled down on a recent tasteless and alternative reality claim that the wealthy were being persecuted as the Jews were by Hitler (Schwarzman, who is Jewish, made a similar remark a couple years back) with the notion that people should be allowed an increase in the number of political votes based on the size of their humongous cash hordes and financial holdings:
And, just as everyone was thinking that Perkins was a tiny bit off his rocker, he suggested that he had the solution to America's problems. In order to vote, he proposed, everyone should have to have paid at least $1 in taxes.
"And those who have paid a million dollars in taxes," he continued, "should have a million votes."
Later, he walked back the comment made at the Commonwealth Club of San Francisco, by claiming, "I intended to be outrageous."
There's a theory that the wealthy do believe that they are anointed. This speculation about their world view is not that different from the monarchies that democracies revolted against. It presupposes that the people of the world are set in sort of a pre-determined caste system. In this world view, those who inherit wealth (which is a high percentage of the super rich -- just look at the Walton and Koch heirs) are inherently more deserving of their billions. Those persons who ruthlessly claw their way to the top -- with money appearing to be their ultimate criteria for the value of their lives -- have been chosen to acquire fortunes because of their basic worthiness, this theory argues.
So, there you have it, five reasons the 1% do not really want unemployment to decrease. They are in a gilded stratosphere of wealth right now, making a killing with low labor costs and a generally soaring stock market (with some recent readjustment).
Their economy is soaring to the heavens -- and for it to continue to reach new unprecedented heights of opulence, it is essential -- in their thinking -- that the cost of labor continue to be pushed down, further and further. That can most easily be accomplished if there are a surplus of workers and a scarcity of jobs.