Why Unemployment Abounds in the U.S.A.

How long is it since the Press and politicians, Labour leaders and economists, were all pointing to America as the land of work and prosperity? Special Commissioners spent a whole week in that vast country and filled newspapers with articles on the “Secrets of High Wages.”

Now, however, the papers are “trying” to discover the Secret of No Wages in America for millions of willing workers. The representative of the American Federation of Labour told the American House of Commons that 4 millions were out of work. The correspondent of the Conservative Daily Telegraph (February 9th) reports as follows :—

“No official statistics regarding the number of unemployed in the United States are available, but the figure is roughly estimated at between 3,000,000 and 4,000,000, some estimates placing the total at between 9 and 10 per cent. of the total number of workers.”

Most of the newspapers have called attention to the reopening of “bread lines” and the rapid increase of begging on the streets of “God’s country.”

We are told that conditions are rapidly approaching the situation of 1920-1921 when over 6 millions were out of work.

The myth of high wages and large savings is quickly being exposed by the widespread appeals of charities and welfare centres for help, and the fears that the “property” bought on instalments by workers will not be paid for. Such property, usually bought on instalments of one dollar down and the rest later on, includes clothes, furniture, books, gramophones, and, in fact, all the “vast” and peculiar property of the workers. The motors and houses that loom large in reports of American labour prosperity are now exposed as the property of the capitalists used by the workers as long as they can pay instalments.

Unemployment is obviously a world evil and not a national one. It is not merely European, but International. It exists in the so-called prosperous countries like America as well as “backward” countries like Russia. The calm assumption that America had disproved Karl Marx’s ideas is again exposed by the large extent of poverty and unemployment in the much-vaunted richest country.

America prided herself on being beyond the dangers affecting countries depending on a foreign market. The United States claimed that only ten per cent. of her wealth was exported—the rest being for the great “home market.” But what is the home market? It is composed of workers and capitalists as consumers.

The capitalists are few compared with the rest and they therefore can’t consume most of the wealth. The workers can only buy as much as their wages amount to, and in America wages are a small proportion of the total output of industry, which is very efficient in production. That mass production and highly-developed machine system of America (so much advocated as our remedy here) has produced the problem of problems for the giant trusts and companies there. How can the products be disposed of? The products must be sold if the owners can realise their profits. The modern U.S.A. factory can produce more wealth with less hands than formerly and so the home market is made up of millions on a barely existing wage and the rest without wages at all. More and more, therefore, the owning class have turned to the export trade to South America and the East, but the other countries are also seeking trade there, and some of the countries once America’s customers, like Japan, are now America’s rivals.

The Home Market in America can be supplied very rapidly because of that increasing output of the modern machine plant, and consequently the unemployment of millions is a regular thing in the United States, as it is in Europe. The uncertainty of the “workers” job is greater there because of the larger output per man in the centralised and trustified organisation of industry.

So in the world’s most productive country, where millionaires and luxury abound amongst the owning class—there is want, bitter want for millions. Charities are appealed to and the out-of-work has to “panhandle” or beg for a cup of coffee on the street in competition with crowds of his fellows.

So even though problems of production are easily solved—the worker is left to want. Unemployment is due to a condition common to every capitalist country—that is private ownership of the means of living.

The hope of the worker in the U.S.A. is the hope of the worker in Europe and Asia —that is common ownership of the means of production and distribution—Socialism.


(Socialist Standard, March 1928)

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