We are endlessly and repetitively treated to sermons on the wonders of capitalism. Everybody will be taken care of, with the proviso that you are willing to work. As I have had frequent cause to note, that a line has to be furiously propagated across every channel speaks to a lack of concrete reality. And as more people, especially young people, see that they have declining possibilities, more questioning inevitably arises.

The only thing worse in capitalism to having a job, however unpleasant, is not having a job. Unemployment benefits are barely at starvation rates and end all too soon. Naturally, that is worse in the United States than most other advanced capitalist countries of the Global North. Six months is the limit set at a rate well less than half of what your wages were in the job you just lost. And given that six months is the average time necessary to secure new employment, that means around half of those collecting unemployment insurance will likely have a spell of no income at all.

Moreover, the official unemployment rates issued by the world’s governments drastically understate how many are in need of full-time, regular work. And, in turn, the number of those with regular employment or seeking regular employment drastically understates the lack of jobs out there.

How large is the shortage of jobs? So large that only a little more than one-third of the world’s workforce has a formal job! To this we will return below.

The official unemployment rates understate the true extent of joblessness because they report only those collecting unemployment benefits and are actively searching for work (often the latter is necessary to qualify for the former). Your unemployment benefits ran out? Congratulations! You are no longer counted as unemployed. Maybe your landlord will not collect the rent until you are employed again since you are no longer an unemployment statistic? No, I suppose not. But if you are out of work, you are far from alone. Just how not alone? Let’s see if we can quantify that, first for a few countries and then for the world.

The official U.S. employment rate for May 2024 is 4.0 percent. That is certainly far better than the 14.8 percent reported for April 2020 when the Covid-19 pandemic forced a closing of much of the economy. But how real is that 4.0 percent statistic? Not at all realistic, even though this is the standard rate faithfully reported by the corporate media every month. That is not to say that the 4.0 percent statistic is wrong, based on the definition used to calculate it. Rather, it is quite inadequate. The better measure is the U-6 statistic that is also issued by the U.S. government but invariably ignored. 

What is the U-6? This number represents all who are counted as unemployed in the “official” rate, plus discouraged workers, the total of those employed part time but not able to secure full-time work and all persons marginally attached to the labor force (those who wish to work but have given up). That figure is 7.4 percent for May. That comes closer to representing the true state of employment — and that 7.4 percent is actually better than the long-term average of 10.1 percent. Typically, the U-6 is somewhere near double the “official” rate.

Even the U-6 statistic doesn’t necessarily fully capture the lack of jobs. A better indication of how many people have found work is the “civilian labor force participation rate.” By this measure, which includes all people age 16 or older who are not in prison or a mental institution, only 62.5 percent of the potential U.S. workforce was actually in the workforce in May 2024. That is a significant drop from the peak of 67.3 percent in May 2000., and the number has steadily drifted downward across the 21st century, except for a short-term drop during the 2020 pandemic that has since been reversed. Want more bad news? The percentage of the U.S. gross domestic product going to wages had fallen to 42.8 percent in 2023. Since 2011, the percentage going to wages has been the lowest it has ever been since the statistic began being tracked in 1929. This decline — the flip side of skyrocketing corporate profits — is long-term. The peak of 52 percent was reached in 1969.

A lack of jobs around the world

In Canada, we find much the same situation. The “official” unemployment rate was 6.2 percent for May 2024. But how high is Canadian unemployment when everybody is counted? The closest Canadian equivalent to the U.S. U-6 rate is the R8, which nonetheless counts people in part-time work, including those wanting full-time work, as “full-time equivalents,” thus underestimating the number of under-employed. The R8 for May is 8.5 percent. What might the actual percentage of Canadians lacking full-time work be? We can extrapolate from an analysis published by The Globe and Mail analyzing unemployment in 2012, which estimated the true unemployment rate for that year to be 14.2 percent as compared to the R8 figure of 9.4 percent. Thus if we apply the same ratio, the true Canadian unemployment rate must be above 13 percent.

Attempting these adjustments for other countries is difficult as statistics equivalent to the U.S. U-6 or Canadian R8 are not generally made available. Britain’s official unemployment rate is reported at 4.4 percent for February to April 2024. That rate counts 1.5 million Britons. According to a BBC report, there are an additional 1.7 million people who “said they wanted a job.” So if we count them, we arrive at a reasonably true unemployment rate of perhaps 9 percent.

The European Union reports an unemployment rate of 6.0 percent. The EU does provide a statistic for those counted as unemployed by the standard measurement, plus others out of work and part-time workers seeking full-time work (although difficult to find) and the latest statistic is 12.3 percent for 2022. Australia is also reluctant to make known the full extent of unemployment. For May 2024, the Australian Bureau of Statistics reports an “official” unemployment rate of 4.0 percent and an underemployment rate of 6.7 percent. The latter rate includes part-time workers wishing full-time work. Australia does have an “extended labour force underutilisation” rate but does not seem to make this statistic available. In February 2017, the rate was given as 15.4 percent at a time when the official rate was 5.8 percent, so it is reasonable to estimate the true percentage of those without full-time work is more than 13 percent.

The bottom line as we sort out all these statistics is this: Capitalism does not provide anywhere near enough jobs. We have thus far examined countries among the Global North. Not surprisingly, the numbers get considerably worse when we zoom out to examine the state of the world as a whole.

Just how unable is the world capitalist system’s ability to provide for working people? As mentioned above, only a little more than one-third of the world’s workers have secured regular employment. Hard to believe? The numbers are there. The International Labour Organization published a report, “World Employment and Social Outlook,” in May 2024 that calculates the total of the world’s formal workers is 1.48 billion. That doesn’t mean, of course, that all those folks earn an adequate wage — we can safely assume that is far from the case — but these at least have regular employment. Those workers represent only 38 percent of the world’s workforce. To put that 1.48 billion total in perspective, the number of workers with only informal employment is 2.03 billion and there are another 402 million without work at all. This last statistic is fairly comparable to the U.S. U-6 statistic — the 402 million are the total of those “officially” counted as unemployed, plus all those without work who do want a job. That works out to a global unemployment rate of 10.3 percent. Those with only informal employment constitute another 52 percent of the world’s workforce.

It’s worse in the Global South and for women

What sort of system fails so drastically to provide the means to earn a living? And as capitalism’s relentless, uncontrollable competition continually intensifies, and thus the ever-present mechanization, layoffs, work speedups and all the rest of the techniques used to boost profits and thus maintain competitiveness, the percentage of employees with stable, regular employment will decrease in future years.

“Development” will not be a path out of this trap for the Global South, where, to nobody’s surprise, the jobs picture is much more dire than in the world’s advanced capitalist countries. Then there is the enormous wage and employment gap between men and women, also significantly more acute in the Global South than the North.

The total number of those without work around the world (the 402 million mentioned two paragraphs above) is referred to as a “jobs gap” in the International Labour Organization (ILO) report. The jobs-gap rate for the Arab region is 20.5 percent and for Africa 17.4 percent. Although not noted in the report, this surely provides much of the explanation for the immigration crisis.

When broken down by sex, the gap between men and women becomes stark, and wider the lower a country’s income level. For high-income countries, the jobs-gap rate is 7 percent for men but 10 percent for women. For low-income countries, the jobs-gap rate is 15 percent for men but 23 percent for women. The ILO reports summarized this discrepancy as follows: “In 2024, the ILO estimates that 45.6 percent of women (aged 15 and above) are employed, compared to 69.2 percent of men, a gap of 23.6 percentage points. This gap is much larger than what the labour underutilisation indicators would imply, including the most broadly defined jobs gap indicator.”

Why such a discrepancy? The report states:

“A novel empirical ILO analysis shows that family responsibilities are a key driver of the gender gap in employment rates. … It must be highlighted that family responsibilities explain a large share of the observed gender employment gap across all income groups. In low-income countries, the estimated effect of family responsibilities accounts for 62 per cent of the gender employment gap. In high-income countries this share reaches 80 per cent and it is close to 76 per cent in middle-income countries.”

A one-sided responsibility for child rearing, care for relatives and other household work is a substantial contributor to the differences in male and female employment. 

“Given these results, it seems likely that social norms concerning the organisation of unpaid care work, coupled with deficits in care services, are critical factors behind the observed employment penalties. First, women generally bear disproportionate childcare responsibilities. Moreover, the effect of this can become entrenched through a deterioration of job prospects that can last well beyond the first few years of a child’s life. Second, even in the absence of children in the household, women devote a disproportionate amount of time to unpaid care work compared to men. In ILO 2018 the authors find in a sample of 11 countries that daily hours spent in unpaid care work by women in households with no children average 3.7, which increase to 6.1 daily hours in households with small children. For men, daily hours on unpaid care work are 1.7 with no children and 2.2 with small children in the household. This suggests a disproportionate share of time devoted to unpaid care work beyond childcare, whether for household upkeep or care of relatives other than children.”

As a result, the wage gap between men and women persists, and as with employment prospects, the gap is greater in lower-income countries. In high-income countries, the ILO calculates that women earn 73 cents to the male dollar and in low-income countries only 44 cents. That also means women are more likely than men to be in precarious (informal) employment and in turn wage differentials are larger in informal than formal work.

Going beyond trying to reform the unreformable

As is standard with these sorts of reports, there is useful information demonstrating a problem but concluding with the weakest tea possible in suggested solutions. True to form, the ILO report concludes by suggesting “social dialogue at all levels, aimed at promoting inclusive, equitable, and effective public policies that resonate with societal needs and promote human dignity for all.” There is nothing wrong or bad about those suggestions, but we really ought to be far beyond the point where a polite discussion with the world’s power brokers could be seen as anything other than a farce.

Human dignity and the provision of social needs are surely what is needed. But are the world’s capitalists, who grow wealthy and powerful under the current world economic and political system, and all the institutions that keep them in power and animated by the governments that promote the wealth and power of capitalists, really going to change their ways once the world’s unfairness is explained to them? Santa Claus and the Easter Bunny will be riding on flying pigs and elephants before that happens. Capitalism is working as intended, and its beneficiaries can’t, as a class, be expected to “see the light” no matter how nicely inequality is explained to them. A single capitalist, or heir to a capitalist fortune, might decry the world’s vast inequality and act on that, but an entire class is not going to commit economic suicide. Nor is any percentage beyond a minuscule number. 

What do the high representatives of capital have to say about the state of the world? Commentaries by orthodox economists, conservative think tanks and business publications such as Forbes say the problem is that wages are too high. The U.S. Federal Reserve, the world’s most important central bank, agrees that wages are too high. Cutting wages and lowering already low taxes for corporations and the wealthy are routinely promoted, despite higher taxes leading to more jobs. The International Trade Union Confederation yearly issues a report on the state of labor, and every year finds that not one country on Earth fully respects labor rights; in its 2023 study, only nine countries were merely “sporadic violators of rights.” One of the leading institutions used by the most powerful capitalist countries to leverage their power in the rest of the world, the World Bank, routinely funds massive infrastructure projects that can each displace tens of thousands of people, disrupt the livelihoods of hundreds of thousands and are often imposed with violence. The list could go on and on, but I’ll note just two more related items: the US$10 trillion handout to the financial industry through programs artificially propping up financial markets in just the first two years of the Covid-19 pandemic, on top of the further trillions handed out to business in those years while employees received crumbs and layoff notices.

Can this really be reformed? No. Working people are losing one of the most one-sided wars in human history. The hyper-competitive nature of capitalism, under which our labor is a commodity, can’t be altered; at best through massive effort reforms can be achieved until the next wave of attacks commences. As long as we continue to fail to question the world economic system, our conditions will only worsen. But questioning that system is only the first step in a long journey; changing the system to one centered on meeting human needs in a sustainable, environmentally sound manner is what is needed. Call that system “economic democracy” or “socialism” as you wish. Once again, that or barbarism is the choice to be faced.

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