Persistent unemployment shows the deepening of the crisis
Capitalism needs unemployment to function
Unemployment is integral to capitalist accumulation, enabling the system to indirectly force the working class to accept the working conditions that cost capital the least. The oversupply of labour helps keep the price of labour down and helps the capitalist in the drive for profits. In the classical periods of depression during the nineteenth century the oversupply became particularly acute, forcing labour costs down rapidly and putting pressure on those still employed to increase productivity for fear of losing their jobs. In the nineteenth century periods of boom, surplus labour allowed expanding capitalism to take on workers quickly without poaching them from other parts of the economy or causing wages to rise to the point where they threatened the accumulation cycle.
Unemployment and the welfare state
Unemployment has any number of serious consequences for those individuals and communities that are subjected to it: rising crime, drug abuse, ill-health. Studies suggest that long-term unemployment can reduce life expectancy typically by around seven years. These consequences often drive the working class to react. If out of work you don’t have the strike weapon, but the unemployed can organise themselves, and can unite with those who are still in work. The greatest fear of the ruling class is that such reactions will take on revolutionary forms but other forms of social unrest can unsettle the bourgeoisie.
Unemployment and crisis
Whatever can be read into the official figures it is clear that behind them the level of unemployment and underemployment in the economy is a growing problem for capitalism. The fact that real unemployment has persisted at a high level for decades shows that for capitalism the unemployed are less a reserve army and more a permanent reminder of the bourgeoisie’s inability to draw millions into productive (or even unproductive!) work.