Jobs and Elections across the World in 2004 Jayati Ghosh

This is a momentous year for electoral politics, not just in India, but in the world. Along with national elections here in India, there are important elections due in other parts of the world – most notably in the United States. We have all learned the unfortunate truth that the outcome of the US elections matters to all of us and can even change the course of global politics and economics, not to mention destroy the lives of innocent people in the opposite part of the globe. So we are forced to give it some attention.

The news is that in the United States, just as in India, the outcome of the elections is not as predictable and self-evident as the current rulers in both countries would like to think. And in both places, the rulers appear to be oblivious to the real sources of discontent – that is, the worsening material conditions faced by ordinary people.

Consider the following quotation: “We expect politicians to place a positive spin on economic news, but to insist that things are going great when many people have personal experience to the contrary seems foolish. To justify policies that more and more people call irresponsible, he must claim that wonderful things are happening as a result.

For a while, that famous 8 per cent growth rate seemed to be just what he needed. But in the fourth quarter, growth dropped to 4 percent. And as we’ve seen, the jobs still aren’t there.”

You could be forgiven about thinking that this is a reference to Prime Minister Vajpayee, the BJP-led government’s focus on “India Shining” and the official rejoicing at the 8 per cent GDP growth estimate the CSO has conveniently produced for the current year. But no, this quotation is not about Vajpayee – it is about President George W. Bush, and the quotation is from the well-known American economist Paul Krugman, writing in the New York Times.

Krugman takes issue with the recent claims made by the US administration that employment has shown a healthy increase in the current economic recovery in the US. He points out that the recovery in the jobs in the most recent quarter year was well below the rate of growth of working age population. Over the past few years, the picture is even worse. “Since the recovery officially began in November 2001, employment has actually fallen by half a percent, while the working-age population has increased about 2.4 percent. By this measure, jobs are becoming ever scarcer.”

Despite this, the household surveys of unemployment, on which the official unemployment rate calculations in the US are made, suggest that unemployment has fallen to 5.6 per cent of the labour force. How is this possible? It happens, Professor Krugman says, because people are not counted as unemployed unless they are actively looking for work, and a growing proportion of the unemployed population has simply stopped looking for work.

The reason they may have stopped looking for work is because new jobs are very hard to find. Nearly half of those who are defined as unemployed in the US have been out of work for more than 15 weeks – and this number does not include all those discouraged workers who have simply “dropped out” of the labour force.

Even for many of those US workers who do manage to find or keep their jobs, life has not got much better. Since 2001, real GDP in the US increased by 7.2 per cent. But the increase in real wages and salaries since then has been only 0.6 per cent, and for less skilled workers there has been no increase at all. So the benefits of growth have accrued to profits of corporations, not to most of the people working for them.

Does all this sound vaguely familiar? Indeed, there is much similarity between what is happening in the country ruled by the current super-imperialist, and the country ruled by one of that super-imperialist’s most anxious and willing allies. In both countries, the rulers are trying to put a positive spin on what is essentially a bad economic situation.

The difference is that in the US the Bush regime has gone in for major fiscal deficits to generate the economic recovery, even if most of this has come in the form of tax cuts which favour the rich. In India, by contrast, the government has not used the current situation of economic slack to increase its own investment, or to increase pro-poor expenditures at all.

The point is the in both countries, economic recovery has been mostly jobless. And this has been associated with major deterioration in the bargaining power of labour, and generally worse conditions for most workers. But both sets of governments appear to have fooled themselves into believing that they can use propaganda to counter the evident reality.

12 years ago, George Bush’s father lost the US election (after a more successful war against Iraq) because he was seen to be out of the touch with the economic reality of most voters. There is a real chance that this particular story will be repeated. The much-publicised backlash in the US against companies outsourcing service work to countries like India is just one indication of the feelings of vulnerability and frustration being experienced by the US working class.

Already, the major democratic contender for the President’s job – John Kerry – is ahead of George Bush in the opinion polls. It may be that both Bush and Vajpayee will find that hype cannot overcome reality when people actually have the power of the vote.