Drowning in student debt

Published at Socialistworker.org and IndyBlog.

COLLEGE STUDENTS across the U.S. are drowning in debt--yet a promised plan by the Obama administration to provide "relief" will do little in the long run to reduce their burdens.

Facing increasing pressure from an Occupy movement that has brought attention to youth unemployment and crushing student debt among other issues, President Obama announced an executive order in October that would decrease student loan payments for some borrowers and allow others to consolidate their loans at lower interest rates.

In addition, the "pay as you earn" plan will forgive student loans for some borrowers after they make 20 years of payments, rather than the 25 years mandated under current law.

This proposal comes just months after Obama's 2012 budget cut Pell Grants that would allow students to attend school year-round, and got rid of government subsidies that paid interest on student loans for graduate students, adding to their debt burden when they graduate.

Now, pitching the plan as a lifeline to those struggling with massive student loans, Obama has pointed out that the plan would have a stimulative effect on the economy, as money spent repaying student loans could otherwise be devoted to consumer goods.

For those with qualifying federal student loans, Obama's order means that changes to the "Income-Based Repayment (IBR) Plan" approved by Congress last year will take effect in 2012, rather than 2014 as originally planned.

The IBR plan currently allows borrowers who fit the criteria of having excessive student loans relative to their income and family size to pay a lower monthly amount on their student loans over a longer period of time.

Currently, those who fit IBR criteria pay 15 percent of their discretionary income (all income over 150 percent of the federal poverty level) in student loan payments each month. Obama's plan would reduce this to 10 percent. In addition, those paying their loans back via the IBR program will have their remaining balance forgiven after 20 years of making payments under the program, rather than the current 25 years.

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WHILE THESE changes will assist some borrowers burdened by excessive student loan debt, only a fraction of those with student loans will qualify under Obama's order, and there are drawbacks to the IBR plan.

The changes to the IBR plan will only impact those who take out a student loan in 2012 and have taken out a loan between 2008-12. That disqualifies recent graduates as well as those currently in default.

And according to the Federal Student Aid office, borrowers who enroll in IBR may end up paying more interest on their student loans than they would if they repaid them in the standard 10-year period. This is because IBR stretches repayment out over a longer period of time, during which interest continues to accrue.

The consolidation portion of Obama's plan would allow borrowers with both direct federal loans and loans from the Family Education Loan Program (loans from private lenders backed by the government) to consolidate their debts and pay up to one-half of a percentage point less in interest, which would reduce monthly payments and the total amount repaid over the life of the loan. Private loans, and those who have already consolidated their loans with private lenders, will not qualify.

The Obama administration claims that 6 million people would be impacted by the loan consolidation portion, while 1.6 million would qualify under the changes to the IBR plan. In other words, the plan will impact only about one-fifth of the 36 million people in the United States with student loan debt.

Jeff Selingo, vice president of the Chronicle of Higher Education, told PBS that Obama's executive order is:

not going to make a huge difference...between both programs, it's probably going to impact maybe about 7 million of those people in repayment or new students coming into the program...The income-based program that was announced today is...only going to affect students in college right now.

So all of these students, these recent college grads who have graduated with a lot of debt who are now looking for jobs and can't find them or are doing jobs that only require a high school diploma, it's not going to provide much help to them.

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STUDENT LOAN debt is at crisis levels. The class of 2011 is the most indebted in U.S. history, with an average debt burden of nearly $23,000. According to the Wall Street Journal, "That's 8 percent more than last year and, in inflation-adjusted terms, 47 percent more than a decade ago."

According to USA Today, total student loan debt in the U.S. is on track to exceed $1 trillion this year, having surpassed credit card debt. And while consumers have paid down other forms of debt, student loan debt continues to rise, doubling in the last five years.

This is a result of the skyrocketing cost of college tuition and fees, which has increased at over four times the rate of inflation over the past 25 years, a process that has accelerated in recent years as budget cuts target higher education spending in states across the country.

Average tuition at public four-year universities has tripled over the past three decades, as states have shifted the burden of paying for college onto students. According to"State of Young America," a report by the policy center Demos and the Young Invincibles, "In 1985, 23 percent of higher ed revenue was from tuition--by 2010, it had climbed to 40 percent."

At the same time that the cost of college has risen dramatically, students in need of assistance who once received grants now have to borrow to pay tuition and fees. "Federal financial aid has shifted from a grant-based to a loan-based system," says the Demos report. "Today, 36 percent of all federal aid is grant-based, down from 55 percent in 1980."

And, grants available to low-income students have not kept pace with rising costs. According to the report, "in 1980, the maximum Pell grant covered 70 percent of the costs of a 4-year public college, including room and board...today, it covers 34 percent."

The result is that nearly half of all students who start college never finish, many of whom are forced to drop out because they can't afford to continue. While 55 percent of students earn a bachelor's degree in 6 years. African Americans and Latinos are hardest hit: just 39 percent of African Americans and 46 percent of Latinos graduate within 6 years.

African Americans are also disproportionately indebted. According to Demos, "among 2008 bachelor's degree graduates, 80 percent of African American students borrowed to pay for their education in 2008, graduating with an average debt of nearly $29,000."

Those who do not graduate must still pay back their loans, without the higher wages on average that come from a college degree. David from New York City explains:

After four years at college, I left half way through my engineering program because of mental health issues. Since then I've worked in the service industry, making about 25 cents more than minimum wage. I had $10,000 debt when I left school...I still have the same amount of debt now despite 10 years of making payments over the last 25 years. I've been in debt my entire adult life...it's been a ball and chain around my neck for 30 years.

Unlike credit card and mortgage debt that can be discharged in bankruptcy, student loan debt cannot be gotten rid of except by paying it off or having it forgiven through select programs like the IBR. Wages and even Social Security payments can be garnished to collect. In other words, in order to obtain access to higher education, working-class students are forced into massive debt that in some cases can continue to haunt them even after they retire.

Ben, a student at the University of Massachusetts-Amherst, a public university, who will graduate with $50,000 in loans, said:

My financial aid was pretty good--for the first two semesters. Then my grants dried up. Then more of my loans were of the unsubsidized kind, meaning my debt will have an even higher rate of interest charged. It's a scam, it's unjust, it's modern day indentured servitude. I'll be paying this debt off for the rest of my life--and when I die, there will probably still be some left.

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YOUTH UNEMPLOYMENT is at record highs, with less than 50 percent of youth aged 16-24 employed, the lowest figure on record at the Bureau of Labor Statistics. More people in what the mainstream media is calling a "lost generation" are unable to keep up with student loan payments. According to USA Today, "The portion of borrowers in default--more than nine months behind on payments--rose from 6.7 percent in 2007 to 8.8 percent in 2009, according to the most recent federal data."

Default spells disaster for those who cannot make payments on time. Julian, from New York City, explained:

I took out a loan of $45,000 in 2004, and it's ballooned to $75,000 already. By the time I pay it off, it'll cost me $125,000 if I were to pay the $900 they demand every month, which I can't afford. It's like making another rent payment, and it's killing my credit score.

How can we tolerate an educational system that is more worried about making money than educating people? Especially now, when they check your credit score for any loan approval--when you're looking for a place to live, buying a car or even when you look for a job...It's economic disenfranchisement. We already have a generation of students with loans like myself who won't be addressed by Obama's plan. What about all of us who can't discharge or pay off these student loans? What about our future?

In addition to only impacting a fraction of borrowers, Obama's executive order does not even begin to address the root causes of the student loan crisis--skyrocketing tuition and fees, stagnant wages and record youth unemployment. It is a bandage on a gaping wound.

The student loan crisis is one of the many grievances driving the Occupy movement around the country. Protestors at Occupy Wall Street have proposed demands including free higher education and the forgiveness of all student loans. At Occupy Philly, there is a "Student Loans Jubilee Working Group" raising similar demands.

On October 5, as workers joined in a community-labor march in which 20,000 people take to the streets of New York City, thousands of students on hundreds of campuses in New York and across the country walked out, protesting among other things the rising cost of higher education and the loans that students are saddled with just to obtain a degree.

It is in this context, as well as the approaching 2012 election, where Obama will be hard-pressed to match the unprecedented youth turnout that was a key to his victory in 2008, that Obama issued his order on student loan debt. He and his advisers no doubt hope his plan will bolster support for his re-election bid--and make it seem as though the government is listening to the Occupy movement and taking action.

But while many Occupy supporters understand that Obama's executive order on student debt is a response to the pressure he is feeling from Occupy Wall Street, they aren't satisfied and are demanding more.

According to New York Public Radio, "[M]any Occupy Wall Street protesters see the president's move as trying to harness their energy without doing enough to change the system."

"It's really frustrating to see how something [that's presented] in the language of helping us is not actually doing anything," said protester Jason Ahmadi. "The people have these real concerns and mobilized to look for real answers, and they make changes that have the language of solving the problem, but actually don't do anything."

Rather than dampen the struggle, Obama's announcement has spurred activists to take further steps--Occupy supporters have declared November 12 "Student Debt Day," with protests planned at Zuccotti Park, the site of Occupy Wall Street, and a call for it to spread to other encampments.

Obama's executive order on student loans won't help nearly enough people, and those who do benefit deserve more. Our struggle to make higher education a human right continues.

Using Black children as guinea pigs

Published at Socialistworker.org.

ANOTHER HORRIFIC chapter in the history of American racism was revealed last month when a class action lawsuit was filed against the Kennedy Krieger Institute in Baltimore. The suit accuses the institute of intentionally exposing young Black children to lead paint and dust in order to study the effectiveness of various types of abatement strategies for decreasing lead levels in housing.

The suit alleges that beginning in 1993 and until 1999, Kennedy Krieger, which is affiliated with the prestigious Johns Hopkins University, moved Black families with children between the ages of 1 and 5 into apartments subsidized by the state, telling them that they were "lead safe."

However, the apartments allegedly contained lead dust and paint that put the children at great risk. Kennedy Krieger is accused of not informing parents of the risk of lead exposure and providing no medical care to children in the study.

Lead exposure is especially harmful to children; it can cause serious and permanent health problems, including learning disabilities and behavioral disorders.

These allegations have drawn comparisons to the infamous Tuskegee Experimentconducted by the United States Public Health Service from 1932 to 1972, in which hundreds of poor African American men were misled in order to study the affects of syphilis if left untreated.

Subjects in the study were not told they had syphilis; the government "deliberately denied treatment to the men with syphilis and they went to extreme lengths to ensure that they would not receive therapy from any other sources."

Many of the subjects died of syphilis, several passed it on to their wives, and many of their children were born with congenital syphilis, which can cause a host of serious health problems, including deformities, brain damage, seizures and death. The men were denied treatment for decades, even after penicillin was introduced as an effective treatment for syphilis in the 1940s.

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SIMILARLY, KENNEDY Krieger allegedly did not inform the parents of the low-income African American subjects of their study that they risked exposing their children to unsafe levels of lead paint and dust. The lawsuit claims that over 100 children were placed at risk of exposure.

According to the New York Times, the lead plaintiff in the suit against Kennedy Krieger, David Armstrong, says he brought his 3-year-old son to the institute for treatment for elevated lead levels in his blood.

Armstrong agreed to participate in a two-year study, but was not told this would mean exposing his son to lead. He and his son, unaware of the health risks, continued to live in the contaminated apartment after the conclusion of the study. According to theTimes:

Mr. Armstrong said blood was collected from his son for two years, but that no one told him the lead levels had increased. After the two-year mark passed, Mr. Armstrong said he continued to live in the two-bedroom apartment but did not hear from Kennedy Krieger.

During those two years, he said his son, now 20 years old, received no medical treatment for lead. Later, when Mr. Armstrong took his son to a pediatrician, the doctor detected blood lead levels two-and-a-half to three times higher than they had been before the family moved into the apartment.

Kennedy Krieger claims that the study "was conducted in the best interest of all of the children enrolled," citing the fact that "[with] no state or federal laws to regulate housing and protect the children of Baltimore, a practical way to clean up lead needed to be found so that homes, communities, and children could be safeguarded."

While that is certainly an argument for reforms to ensure lead-free housing for children in Baltimore and beyond, it does not justify the use of poor Black children as guinea pigs, subjecting them to the risk of permanent developmental disabilities and behavioral disorders, let alone without their parents' knowledge or informed consent.

The technology to test lead levels in paint had been available for decades prior to the study, and Kennedy Krieger was already aware of the crisis of lead poisoning among Black children in Baltimore because so many had been brought by their parents to the institute for care.

There were clear alternatives, such as the use of lead paint tests on animal subjects that did not involve violating the basic human right of Black children to a safe, lead-free home environment.

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WHILE THE allegations contained in the lawsuit against Kennedy Krieger are outrageous enough and demand justice and accountability, the fact remains that poverty exposes poor children, especially Black children, to lead paint on a scale far greater than that of the study.

More generally, the disproportionately poor health of Black children is the shame of a nation, a crime whose victims are defenseless children targeted because they happened to be born Black in the United States. It is a preventable catastrophe on a mass scale in our society, the result of poverty and institutionalized racism that are behind racial disparities in access to health care, housing and healthy food.

According to the United States Census Bureau, nearly 40 percent of Black children, or 4.8 million, live below the poverty line. This compares with 22 percent of all children in the country, and 12.4 percent of white children.

These figures understate the actual scale of poverty in the country, as the poverty line is artificially low, based on a measure of the standard of living that dates back to the 1950s. In order to count as officially poor, a family of four must make less than $22,113 per year. For a single parent with two children, that number drops to $17,568. Especially in large cities with high costs of living, families making twice that amount can have difficulties making ends meet.

Poverty forces families into substandard housing, especially African Americans, for whom decades of racist de facto and legal housing discrimination ("redlining") have pushed them into old, dilapidated, unsafe apartments and houses.

The risk of lead exposure is highest in housing built before 1978, when the federal government outlawed the use of white lead paint in homes. Black children are disproportionately likely to live in old, untreated housing contaminated with lead and with chipping lead paint, the most common source of exposure. They therefore suffer a relatively larger share of the impact of lead poisoning.

According to the Centers for Disease Control, from 1991 to 1994, around the time the Kennedy Krieger study began, 11.2 percent of Black children ages 1 to 5 had elevated blood lead levels, nearly five times the rate of 2.3 percent for white children the same age. Although these rates decreased significantly by 1999-2001, racial disparities remained, with 3.1 percent of Black children ages 1 to 5 suffering from elevated blood lead levels, over twice the rate of 1.3 percent for white children.

Lead paint exposure is just one of many ways that poverty and institutional racism harm Black children's health.

According to the Children's Defense Fund, when compared with whites, Black children are less likely to have health insurance, their mothers are less likely to have access to prenatal care, they suffer from asthma at a 50 percent higher rate, they are more likely to be overweight or obese, they are less likely to have access to dental care, and more than 25 percent do not receive full immunizations against childhood diseases.

Health disparities fueled by poverty and racism are responsible for a situation where Black children are almost twice as likely as whites to be born with low birth-weight, which increases the risk of behavioral and learning problems. And "Black infants are more than twice as likely as White infants to die before their first birthday," according to the Children's Defense Fund.

To make things even worse, when Black children exhibit the behavioral problems associated with lead poisoning and other health disparities, rather than receiving the health care they need, they are more likely to be funneled into the criminal injustice system instead. Approximately one in three Black men born in the early 21st century will go to prison during their lifetime.

The Kennedy Krieger Institute's study is emblematic of the 1990s, a decade that saw the continuation of the attacks on the gains of the civil rights movement that were a central focus of the rise of the right wing in the 1980s. These included the "war on drugs," which precipitated the rise and growth of a system of racist mass incarceration that has locked millions of African Americans behind bars for nonviolent offenses, what author Michele Alexander has dubbed the "New Jim Crow."

Central to racism is the dehumanization of the oppressed. In the United States, the dehumanization of people of African descent began with their enslavement over 300 years ago and persists to this day. It is this context of racial oppression that makes possible atrocities like the Kennedy Krieger Institute study.

The NYPD's naked racism

Published at Socialistworker.org.

"I FRIED another nigger," said New York Police Department (NYPD) officer Michael Daragjati in a phone call to a friend. "Another nigger fried, no big deal." Daragjati was on patrol in Staten Island on April 15 when he did a "stop-and-frisk" of a 31-year-old Black man, searching him on the street.

Although he found no weapons or contraband on his victim, Daragjati is accused of responding to a supposed insult from the man by arresting him on trumped-up charges of resisting arrest, lying in the police report and to his supervisor, and subsequently making racist comments about his victim in text messages and phone calls to a friend.

Daragjati's epithets were recorded because his phone was being monitored as part of an investigation into an ongoing pattern of wrongdoing.

This vile racism has touched off a fresh storm of criticism of the NYPD and prompted the federal government to charge Daragjati with a civil rights violation for "trumping up charges against a Black man and lying on the police report."

According to the New York Daily News:

Daragjati swore out a criminal complaint, falsely asserting the man had pushed and kicked him and 'flailed' his arms to prevent being arrested. Several other officers had witnessed the arrest, in which the man offered no resistance. The victim later pleaded guilty to disorderly conduct on the advice of his lawyer.

Stemming from these charges, Daragjati faces a possible year in prison and a $100,000 fine, and combined with charges in an unrelated case in which he is accused of beating and intimidating a man he suspected of stealing a snowplow from him, Daragjati could face up to $850,000 in fines and 60 years in prison.

This is not the first time Daragjati has been accused of racist and illegal practices. According to the Daily News, he "has been sued twice before for falsely arresting [Blacks]--the city settled one case for $12,500 and the other is pending."

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DARAGJATI'S RACIST abuse is the latest high-profile example of the systematic racism that runs through the NYPD. This isn't a matter of "a few bad apples," but of a rotten barrel that has produced a culture of brutality and racism that produces and protects officers like Daragjati.

Just last month, 17 NYPD officers were indicted for fixing tickets and other violations. Tapes from this case revealed widespread racism among the officers under investigation as well as many others. "The wiretap recordings at the heart of the probe captured conversations rife with racist and inflammatory remarks," according to theDaily News.

Lee Wengraf, an activist against police brutality in New York and member of the Campaign to End the Death Penalty, explained:

The reality is that police violence and police brutality are far from an exception. They are a day-to-day reality in poor communities and communities of color where police play a repressive role. The numbers of people of color targeted by stop-and-frisk in New York speak for themselves, as well as the hundreds of thousands who are detained or worse because of the color of their skin.

This pattern of brutality includes multiple cases of NYPD killings of unarmed Black men, including Amadou Diallo, a 23-year-old African immigrant shot 41 times in 1999 for the "crime" of reaching for his wallet on his own front porch--and Sean Bell, a 23-year-old Black who died in a hail of 50 police bullets the morning after Bell's bachelor party in 2006.

In both cases, officers charged in the shootings were found "not guilty."

Then there is the everyday bigotry of encounters with New York police. Stop-and-frisk is a widespread tactic employed by the NYPD where hundreds of thousands of mostly Blacks and Latinos are stopped and searched on the street each year without any valid cause for suspicion. The statistics show that the racism on vile display in Daragjati's boast is merely the most confident expression of a pattern that runs through the stop-and-frisk program.

In 2010, 601,055 people were stopped and frisked in New York City, according to the New York Civil Liberties Union. Of these, 86 percent were not charged with a crime, and 85 percent were Black or Latino, although Blacks and Latinos comprise just over 50 percent of city residents.

In Black and Latino neighborhoods, the NYPD's stop-and-frisk policy creates conditions akin to life under military occupation. For example, in just eight blocks of Brownsville, a predominately low-income African American neighborhood in Brooklyn,police made 13,200 stop-and-frisks in 2009, nearly one for each of the blocks' 14,000 residents. They resulted in arrests less than 1 percent of the time.

The stark racial disparities involved in stop-and-frisk searches by the NYPD contribute to the already overwhelming disparities in drug arrests and convictions. Although the practice is justified as an attempt to keep residents of "high-crime areas" safe, the truth is that over-policing in communities of color serves to manufacture the elevated crime rates that create the pretext for stop-and-frisk in the first place.

Stop-and-frisks often result in Blacks and Latinos being illegally arrested for open marijuana possession, according to a WNYC News investigation:

Under New York state law, possessing a small amount of pot becomes a crime--a misdemeanor--when it is smoked or displayed "open to public view." If the marijuana is concealed on the person, possession of the drug is only a violation, which is not a crime. The person receives a ticket and fine.

WNYC tracked down more than a dozen men arrested after a stop-and-frisk for allegedly displaying marijuana in public view. Each person said the marijuana was hidden--in a pocket, in a sock, a shoe or in underwear...They each said the police pulled the drugs out of his clothes before arresting him for having marijuana in public view.

Such searches are illegal because police are only legally allowed to search someone's pockets if they believe someone might possess a weapon.

More than 50,000 people were arrested in New York City in 2010 for marijuana possession, and 90 percent of them were Black and Latino, despite statistics that show that young Blacks and Latinos are less likely than whites to smoke marijuana.

Not only that, "a former New York City Police Department narcotics detective [recently] testified officers commonly planted drugs on innocent people in order to meet arrest quotas," alleging that the practice was widespread, including supervisors, undercover officers and investigators.

That's why stop-and-frisk is commonly understood as a form of intimidation and repression aimed at communities of color in New York City.

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THE NYPD has been mired in scandal in recent months, and the naked racism of Michael Daragjati is only the most recent revelation. NYPD officers were recently acquitted of raping a woman they were tasked with helping, despite admitting on tape to having sex with the victim while she was incredibly intoxicated.

Last year, former NYPD officer Wilfredo Rosario was convicted of sexually assaulting an 18-year-old woman while on duty, part of a pattern of abuse.

And the brutality of the NYPD has been revealed to the world as a result of its heavy-handed response to peaceful Occupy Wall Street protests, which has included mass arrests, the pepper-spraying of women already in a police pen on the sidewalk, beating unarmed protesters with batons, charging them with horses, throwing them to the ground, and punching them in the face.

All this makes clear that the behavior of a cop like Michael Daragjati isn't the exception--but the NYPD rule.

What do we mean by exploitation?

Published at Socialistworker.org.

THE TERM "exploitation" often conjures up images of workers laboring in sweatshops for 12 hours or more per day, for pennies an hour, driven by a merciless overseer. This is contrasted to the ideal of a "fair wage day's wage for a fair day's work"--the supposedly "normal" situation under capitalism in which workers receive a decent wage, enough for a "middle class" standard of living, health insurance and security in their retirement.

Sweatshops are horrific examples of exploitation that persist to this day. But Karl Marx had a broader and more scientific definition of exploitation: the forced appropriation of the unpaid labor of workers. Under this definition, all working-class people are exploited.

Marx argued that the ultimate source of profit, the driving force behind capitalist production, is the unpaid labor of workers. So for Marx, exploitation forms the foundation of the capitalist system.

All the billions in bonuses for the Wall Street bankers, every dividend paid to the shareholders of industrial corporations, every dollar collected by capitalist landlords--all of this is the result of the uncompensated labor of working-class people. And because exploitation is at the root of capitalism, it follows that the only way to do away with exploitation is to achieve an entirely different society--socialism, a society in which there is no tiny minority at the top that rules.

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EXPLOITATION IS not unique to capitalism. It has been a feature of all class societies, which are divided into two main classes, an exploited class that produces the wealth and an exploiter class that expropriates it.

Under slavery, exploitation is naked and obvious to exploiter and exploited alike. The slave is forced by sword and lash to work for the master, who provides just enough to keep the slave alive--all the rest of the fruits of their labor are forcefully appropriated by the slaveowner.

Similarly, under feudalism as it arose in its classical form in Europe, the serfs work on a plot of land that belongs to the lord. They work for part of the time for themselves, producing their means of subsistence, and the rest of the time, the product belongs to the lord. The terms of exploitation are clear to serf and lord alike--the serf labors for the lord, and receives nothing from the lord in return.

Capitalism is different among the chief forms of class societies Marx examined in that the exploitative nature of labor is hidden by the wage system. Except in cases of outright fraud, workers are hired, labor for a given amount of time and receive a wage in return. It appears on the surface that an equal exchange has taken place--but this isn't the case.

Why not? The capitalist, in addition to purchasing various inputs into the productive process--machinery, raw materials, etc.--also buys what Marx called "labor-power," increments of workers' time during which the capitalist controls the workers' creative and physical energies.

Under capitalism, most needs are met, at least for those who can afford them, by commodities--commodities being goods and services produced for sale on the market. Working-class people, who don't own the means to produce and sell commodities, have one commodity they can sell: their labor-power, their ability to work. In this way, workers are forced to sell themselves to some capitalist piecemeal in order to acquire money to buy the necessities of life.

Labor-power, according to Marx in writing his first volume of Capital, is "the aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he [or she] sets in motion whenever he [or she] produces a use-value of any kind." In other words, labor-power is the capacity to work, to create value, which the worker sells to the capitalists in increments for a wage.

Labor, on the other hand, is the actual process of work itself. Like the buyer of any commodity, the capitalist claims the right to consume the commodity they purchase. In this case, the consumption of labor-power consists of the control of the labor process and the ownership of the products workers create during it.

According to Marx's analysis, unlike machinery, raw materials and other inanimate inputs that pass on their value to the product but create no new value, labor-power is a "special commodity...whose use-value possesses the peculiar property of being a source of value." In other words, workers produce new value contained in the final product, which belongs to the capitalist.

The distinction between "labor-power" and "labor" is the key to understanding exploitation under capitalism.

When a capitalist pays a worker a wage, they are not paying for the value of a certain amount of completed labor, but for labor-power. The soaring inequality in contemporary society illustrates this--over the past three decades of neoliberalism, the wealth that workers create has increased, but this has not been reflected in wages, which remain stagnant. Instead, an increasing proportion of the wealth produced by workers swelled the pockets of the superrich, who did not compensate the workers for their increased production on the job.

It appears that the capitalist pays the worker for the value produced by their labor because workers only receive a paycheck after they have worked for a given amount of time. In reality, this amounts to an interest-free loan of labor-power by the worker to the capitalist. As Marx wrote, "In all cases, therefore, the worker advances the use-value of his labor-power to the capitalist. He lets the buyer consume it before he receives payment of the price. Everywhere, the worker allows credit to the capitalist."

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CAPITALISTS PURCHASE labor-power on the market. In general, the wage--the price of labor-power--is, like all other commodities, determined by its cost of production, which is in turn regulated by struggles between workers and capitalists over the level of wages and benefits, and by competition between workers for jobs.

As Marx wrote in Wage Labor and Capital, the cost of production of labor-power is "the cost required for the maintenance as the laborer...and for his [or her] education and training as a laborer."

In other words, the price of labor-power is determined by the cost of food, clothing, housing and education at a given standard of living. Marx adds that "the cost of production of...[labor-power] must include the cost of propagation, by means of which the race of workers is enabled to multiply itself, and to replace worn-out workers with new ones." So, wages must also include the cost of raising children, the next generation of workers.

So in Marx's generalized analysis, the level of wages depends on what it takes to keep workers and their families (who represent the next generation of workers) alive and able to work--with their standard of living affected by the outcome of class struggles between workers and capitalists.

The crucial point is that the cost of wages or labor-power depends on factors completely independent of the actual value produced by workers during the labor process. This difference is the source of "surplus value," or profit. So let's compare the price of labor-power to the value, expressed in price, of the commodities that workers creates through their labor.

To take a simple example, let's assume that a worker is able to produce in four hours new value that is equivalent to the value of their labor-power for the day--to, say, $100 in wages. Marx called this "necessary labor," because it is the amount of labor required to replace the wages paid by the capitalist, and because if the worker labored independently and not for a capitalist, it would be "necessary" for them to work four hours to maintain their standard of living.

If it was a matter of "a fair day's pay for a fair day's work," workers ought to be able to go home after four hours of labor. In our example, the capitalist is paying them $100 for the workday, and the worker produced $100 worth of new value in the form of products that belong to the capitalist, which they can sell on the market to recoup what they spent on wages and other costs of production.

But things don't work this way under capitalism. As Marx wrote in a pamphlet calledValue, Price and Profit, "By buying the daily or weekly value of the laboring power of the [worker], the capitalist has, therefore, acquired the right to use or make that laboring power during the whole day or week."

Hence, the worker, in order to receive a wage equivalent to the value they produce in four hours, is forced by the capitalist to work longer--a total of, in our example, eight hours. The value created during the additional four hours, embodied in the products produced by the worker during that time, is what Marx called "surplus value."

When this surplus product is sold, the capitalist pockets the proceeds--this, according to Marx, is the secret to the source of profits. And it's not only industrial capitalists whose profits derive from surplus value, or unpaid labor. The "rentier" classes, such as finance capital and landlords, take their cut from the wealth extracted from the labor of workers in the form of interest on loans to the industrial capitalists and to others in society, rent for factories and homes, and so on.

Exploitation forms the basis of all the profits shared among the entire capitalist class. It is not simply the case that the wealthy have a lot while workers have little; capitalists accumulate wealth through a system of organized theft from the working class.

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AN UNDERSTANDING of the basics of Marx's theory of exploitation helps to explain the different forms of struggles between workers and capitalists. To take a few examples (although there are many more):

One of the earliest such struggles was over the length of the working day, which Marx discusses at length in the first volume of Capital. So long as everything else remains the same, capitalists can increase the amount of "surplus labor" over and above that needed to produce the value of wages by extending the length of the working day. This increases the rate of exploitation, as workers spend a greater portion of the working day performing unpaid labor for the capitalist.

In the 1880s in the U.S., workers, led by anarchists and socialists, waged heroic struggles to limit the working day to eight hours. These workers were struggling to decrease the rate of exploitation. By fighting for a shorter working day, they were fighting to decrease the amount of unpaid labor they were forced to perform for the capitalists.

Similarly, struggles over wages and benefits are struggles over the value and price of labor-power, which is an expression of workers' standard of living. Capitalists seek to lower wages and slash benefits, decreasing the price of labor-power in order to increase the accumulation of surplus value, to maximize their profits.

This is evident in the current wide-ranging attack on workers' living standards, from public-sector workers' wages, pensions and health benefits to private-sector workers such as those at Verizon. The 45,000 union workers who went on strike at Verizon and the public-sector workers and their allies who rose up in Wisconsin were fighting to defend the price of labor-power.

Most importantly, Marx's theory of exploitation reveals that because the source of capitalists' wealth is the unpaid labor of workers, the interests of workers and capitalists--like slave and master or serf and lord before them--are diametrically opposed and are impossible to reconcile. The two will always come into conflict since capitalists can only increase their share of the wealth at the expense of workers, and vice versa.

Workers have to struggle to decrease the severity of the exploitation they face under capitalism. But as long as the capitalist system exists, workers will be exploited, and their unpaid labor will remain the source of the profits that are the lifeblood of the system.

Therefore, Marx concluded that the only way for workers to control the wealth they create and use it to meet their needs was under a different system altogether. As he wrote in Value, Price and Profit, "Instead of the conservative motto 'A fair day's wages for a fair day's work!' they ought to inscribe on their banner the revolutionarywatchword: 'Abolition of the wages system!'"

According to Marx, only when workers control the means of production for their own benefit can exploitation be abolished--only then will "the expropriators [be] expropriated."

No unemployed need apply

Published at Socialistworker.org.

HERE'S THE latest perverse story from what's being called the "jobless and wageless recovery": Significant numbers of employers are openly discriminating against unemployed job seekers.

No, that's not a typo. According to"Hiring Discrimination Against the Unemployed," a study by the National Employment Law Project (NELP) published in July:

U.S. employers of all sizes, staffing agencies and online job posting firms are using recruitment and hiring policies that expressly deny employment to the unemployed--simply because they are not currently working. In other words, at a time when the competition for jobs is extraordinarily intense--with nearly five unemployed job seekers for each new job opening--some businesses and recruitment firms are telling would-be job seekers that they can't get a job unless they already have a job.

Employers are blatant about this discrimination, which is legal in every state except New Jersey. The NELP report cites language in ads placed by large corporations such as Allstate Insurance and the University of Phoenix, which that applicants "must be currently employed." Other employers require that unemployed applicants have been recently employed.

Discrimination against the unemployed is especially devastating in the midst of a jobs crisis in which U.S. workers face rates of long-term unemployment worse than any period since the Great Depression. According to the Christian Science Monitor, "6.18 million or 44.4 percent of all unemployed workers" have been jobless for longer than 27 weeks, with an average of over 40 weeks on unemployment for these workers.

This bias is also a pernicious, albeit formally indirect, form of racial discrimination.According to the U.S. Bureau of Labor Statistics, seasonally-adjusted unemployment for African Americans stands at 15.9 percent, compared with 8.1 percent for white workers. For Latinos, unemployment is also disproportionately high, at 11.3 percent.

Therefore, discrimination against the unemployed will disproportionately hurt Black and Latino job seekers, widening these racial gaps.

Unemployment is a constant feature of capitalism, even in boom times--and the millions of additional unemployed workers are out of work today not because there was a sudden outbreak of laziness among U.S. workers, but as a result of the financial crisis of 2007-8 triggered by widespread fraud and excess on Wall Street.

Employers justify the decision to discriminate against the unemployed, especially those out of work for extended periods of time, by arguing that the skills of the long-term unemployed atrophy. They claim the long-term unemployed fail to stay on top of new developments in their field and become unaccustomed to work routines.

Such reasoning highlights the utter disregard for human need that is systemic to capitalism. To bosses driven only by the profit motive, workers are expendable. Rather than provide an opportunity for the unemployed to get back on their feet, the system chews workers up, and then puts them out to pasture when they are no longer deemed useful.

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VARIOUS non-governmental organizations, including USAction and Color of Change, have launched petitions encouraging Monster.com, a leading job search website, to stop posting ads from employers who discriminate against the unemployed.

Democrats also have introduced legislation in the House and Senate, the "Fair Employment Opportunity Act of 2011," which would prohibit discrimination against the unemployed in hiring and in job postings.

According to a poll conducted by the NELP, such legislation has the support of some 63 percent of respondents, and 90 percent consider discrimination on the basis of employment status to be unfair.

However, even this goes too far for some. Steven Yarusinsky and Daniel L. Saperstein, lawyers at the New Jersey law firm Proskauer Rose, attacked the proposed the Fair Employment Opportunity Act in a recent Washington Post article.

After shedding the obligatory crocodile tears over the high rate of unemployment, Yarusinsky and Saperstein argue, "First...[b]anning unemployment discrimination would equate an often fleeting status with a permanent condition or trait, trivializing the underlying purpose behind discrimination law to prohibit employment decisions made on account of considerations such as race, for which there is never legitimate justification."

This is absurd on its face, given that nearly half of the currently unemployed have been without a job for over six months. And given that those discriminated against on the basis of race are disproportionately represented among the unemployed, far from "trivializing" their rights, additional protections for the unemployed would disproportionately benefit those who already face discrimination for other reasons.

But Yarusinsky and Saperstein continue:

Second, to analogize unemployment status to other protected classes opens the door for the creation of many more such classes--potentially clogging the nation's courtrooms with frivolous lawsuits...employers will have no choice but to expend valuable resources and time--otherwise invested in the workplace--seeking legal counsel to avoid harsh penalties.

This illustrates that what is bad for employers, whose interests the authors represent, is good for workers, and vice versa. Whether or not anti-discrimination protections for the unemployed will lead to protections against other forms of discrimination (and this is hardly a bad thing for the millions of oppressed people facing discrimination in this country) is irrelevant to the issue at hand, which is the injustice of discrimination on the basis of employment status.

Also, employers could avoid lawsuits simply by not discriminating against job applicants. Given that corporations are currently hoarding records amount of cash, it's difficult to feel too sorry for them potentially having to shell out some of it for legal fees. Of course, Yarusinsky and Saperstein do not express the same sympathy for the unemployed--who tend to lack the money with which to hire lawyers to file frivolous lawsuits.

Finally, while acknowledging that today, many are "unemployed through no fault of their own," the writers argue against anti-discrimination protections because "in good and even troubled economic times, long bouts of unemployment may bespeak a bad work ethic or some other improper behavior--a legitimate consideration for any employer."

In other words, they argue against protections from discrimination for the unemployed because such discrimination provides employers with a means to weed out potentially undesirable employees. If some unemployed but qualified workers are unfairly excluded as a result, so be it.

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THESE ARGUMENTS against the Fair Employment Opportunity Act, which would begin to address a basic and deeply unpopular injustice for which there is currently no recourse in any state other than New Jersey, reveal the truth behind a fundamental myth propagated by apologists for capitalism.

The labor market, we are told in our Economics 101 textbooks, is a level playing field where employers and employees meet as equals. Workers are "free labor," supposedly able to choose another employer if they are dissatisfied with their current boss, or to reject a job offer if they are dissatisfied with the wages and benefits on offer.

However, to borrow the criticism so often leveled at socialists by capitalist ideologues, this "sounds great in theory, but doesn't work in practice." Anyone who has ever looked for a job and jumped at the first offer because they needed to make rent that month, or stayed at a job they hated because they needed the health insurance, knows what a lie this is.

As Karl Marx wrote in Capital, under capitalism workers are "free...in the double sense": they are not slaves or serfs, but they are also "free from...any means of production of their own." In other words, while workers are not bound to any individual exploiter, because workers lack the means to produce on their own, they must sell themselves to some capitalist in order to survive. And not even that is guaranteed, a fact illustrated by the record levels of long-term unemployment in this time of crisis.

Capitalists and their mouthpieces like Yarusinsky and Saperstein oppose any and all checks on their power; they know the game is rigged, and they will do whatever it takes to keep it that way, no matter what the cost in human terms.

The jobs meltdown

Published at Socialistworker.org.

TWO YEARS after the economic "recovery" is supposed to have begun by the official calculations, the latest report on jobs from the U.S. government shows the Great Recession is alive and well for anyone who has the misfortune of looking for work.

According to the Bureau of Labor Statistics (BLS), the U.S. economy added just 18,000 jobs in June, and employment figures for May were revised down to just 25,000 new jobs. That's a huge drop from February through April, when politicians and commentators celebrated announcements of more than 200,000 new jobs each month.

In addition, approximately a quarter of a million people gave up looking for work in June, joining the ranks of the millions of "discouraged workers" who are no longer even counted among the unemployed.

A significant portion of the decline in the overall unemployment rate in the past 18 months is the result not of new jobs being created, but of unemployed workers giving up on finding work. But job creation in June was so bad that even with so many "discouraged workers" dropping out of the statistics, the unemployment rate still jumped to 9.2 percent.

Unemployment is always a feature of capitalism, even in boom times, but it has reached nightmarish proportions in the U.S. and across the world in the wake of the most recent economic crisis.

In an issue brief that puts the June unemployment numbers in perspective, Heidi Shierholz of the Economic Policy Institute pointed out that while there are currently 6.9 million fewer jobs than at the start of the Great Recession, "we should have added around 4.1 million jobs to keep pace with population growth. This means that the current gap in the labor market is roughly 11 million jobs. To close that gap within three years, we would have to add around 400,000 jobs every single month."

Even worse, the number of underemployed--those who work part time but would like a full-time job--has barely declined during the "recovery." As Shierholz writes, "In the 23 months since the end of the recession, the total number of un- or underemployed workers has decreased from 26.1 million to 24.6 million, a decline of only 1.5 million."

The picture looks grim from the statistics--but the individual stories behind the numbers are even more wrenching. As Chelsea, from Rochester, N.Y., described her situation:

"I have an associate's degree, and when I lost my union grocery job last summer, it was four months before I found anything. And that anything was Wal-Mart. I lost my health insurance, I had health issues that began to spiral out of control, and I faced an imminent eviction. Now I can only work 25 hours a week or I lose my Medicaid, without which I can't work or live."

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UNEMPLOYMENT FOLLOWING the recent recession is much longer term than in any recovery of the recent past, with over 45 percent of the unemployed having been without a job for over six months.

And after being hardest hit in the depths of the crisis, Blacks and Latinos haven't shared equally in what little job growth there has been. Unemployment for Latinos stands at 11.9 percent, a very slight decline from 12.2 percent two years ago. And during the "recovery," unemployment for African Americans increased from 14.9 percent to 16.2 percent, according to Shierholz--compared with a jobless rate of 8 percent for white workers.

Budget cuts at all levels of government have exacerbated the jobs crisis, especially for Black workers and women, who are disproportionately represented in a public sector that has shed more than 400,000 jobs since the recession.

These public-sector losses have erased nearly half of the growth in private-sector jobs, according to Shierholz--and the austerity agenda coming from both Democrats and Republicans promises more job losses to come in the public sector, as well as cuts to wages and benefits.

According to BLS figures, job losses and long-term unemployment in the wake of the Great Recession represent a deep hole unlike any other recession since the Second World War. And there doesn't seem to be any end in sight.

The bad employment news comes as the college class of 2011--which the Wall Street Journal dubbed "the most indebted ever" due to their record average student loan debt of $22,900--joins millions of workers in the search for jobs that just aren't there.

According to Time magazine, with estimates of real unemployment among those under 25 topping 50 percent, it's expected that as many as 85 percent of new college graduates will move back home with their parents.

For example, Owen, who is finishing up his college degree in New York City, has been searching in vain for a job for over six weeks:

I've been sending out resumes daily, talking to everyone I know. I've turned up nothing. I've gotten two interviews, but no callbacks. It's depressing. If I don't find a job in the next six weeks, I'll have to move back in with my parents in Maine, where the job market is even worse.

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OF COURSE, the misery isn't being shared by America's ruling class. In fact, Corporate America is profiting as a result. U.S. corporations raked in record profits of $1.68 trillion in the last quarter of 2010, even more than the boom years before the Great Recession, helped in no small part by the jobs crisis.

These profits were achieved in large part because companies were able to return production to pre-crisis levels, or close to it, while employing millions fewer workers--in other words, making their employees work harder to produce more for the same or less pay and benefits.

Karl Marx's words in Capital never seemed more relevant: "The over-work of the employed part of the working class swells the ranks of its reserve [of unemployed], while, conversely, the greater pressure that the reserve by its competition exerts on the employed workers forces them to submit to overwork and subjects them to the dictates of capital."

Meanwhile, capitalists are hoarding the immense wealth from this increased level of exploitation, rather than investing it in expanding production and creating jobs. As the Canadian Marxist David McNally wrote:

The big reason for the failure of jobs to return is that while profits have recovered, business investment has not. In one major economy after another, corporations are hoarding cash rather than investing it...Put simply, the rise in profits is not translating into new capital accumulation on any meaningful scale. Instead, corporations in the U.S. and elsewhere are simply hoarding cash, holding onto it in larger amounts than at any time in the last 60 years. By the beginning of 2011, in fact, non-financial firms in the U.S. had at least $2 trillion in cash and checking deposits."

With Republicans and Democrats bickering over how much to cut, not whether to cut at all, it's clear that there won't be any alternative to austerity and the corporate offensive coming from above. The challenge will have to develop out of the self-organization and solidarity of the working class--employed and unemployed.

In fact, though it is generating records profits, the jobs crisis is also at an international wave of discontent and protest that is finding expression from the Arab revolutions that began in Tunisia and Egypt, to the huge labor protests of Wisconsin, to the strikes and mass mobilizations in European countries like Greece and Spain.

In all these struggles, un- and underemployment, especially for young workers, are an important grievance.

Historically, the unemployed have played a vital role in class struggle, even in the midst of a crisis, when employers attempt to pit workers against each other. For example, organizing among the unemployed was essential to winning the Auto-Lite strike in Toledo, Ohio, in 1934, the first of three major labor battles that year which opened the way for the mass union struggles to come.

As Subterranean Fire author Sharon Smith wrote, the strike at Auto-Lite:

began on very weak footing. The 4,000 strikers represented less than half of the total workforce at Auto-Lite. Moreover, fully one-third of all Toledo workers were unemployed at the time. Under these conditions, the strike could easily have been doomed, since unemployed workers might have been expected to rush to take the strikers' jobs in desperation.

Instead, the unemployed played a key role in winning this strike, thanks to an ingenious strategy advocated by the radical pacifist A.J. Muste, an organizer from the American Workers Party. Although courts had prohibited solidarity picketing, Muste's Lucas County Unemployed League pledged to bring large numbers of unemployed workers to the picket line...

When the National Guard was sent in to help the police, its troops fired on the picketers, killing one and injuring many. But the picketers kept fighting back in a standoff that lasted six days--until the company finally agreed to close down production at the plant and troops were removed on May 31...The company finally surrendered on June 4, agreeing to recognize the union and to rehire all of the strikers to their old jobs--in a complete victory.

Despite the mass human suffering reflected in the jobs reports from May and June, there is also hope to be found in the struggles of today and yesterday against austerity and for the right to jobs with dignity and security.