The Economic Crisis:
How It Impacts African-Americans and Labor
by Muhammad Ahmad

Lecture delivered at the Economic and Black Labor Forum, the Philadelphia Community Institute for Africana Studies, 22 October 22 2009

The present Great Recession is the latest and largest crisis of capitalism since the Great Depression of the 1930s.  During the Great Depression over half of all African-American men were unemployed.  The present Great Recession is much deeper because the finance sector of capitalism has exhausted its debt.  The Federal Government is in debt; the states are in debt; most cities are in debt or near debt; and consumers (the working class) are in debt.  This crisis, the worst in 90 years, has a greater impact on African-American workers because they are concentrated in the public sector.

When state governments are in debt and the financial bubble bursts, the future of public-sector workers is threatened, a future they have built through the unionization process.  It is essential that African-American workers, particularly in the public sector, protect their self-interests and power by transferring their labor power into an economically and politically self-reliant form, by creating a black workers’ society.

African-Americas are the majority or near majority of the population in 26 or 27 large cities in America.  Between 1910 and 1970 six and a half million African-Americans left the South.  Today 58-65% live in urban areas.

What I will concentrate on is not only the crisis, but alternatives to the crisis.  In the 1930s unemployment was as high as 25% of the entire population.  Today, “[o]fficial U.S. unemployment is over 9% while real unemployment, taking into account all those wanting jobs and part-timers desiring full-time work, is close to twice that.”¹

It is estimated that 122,000 new jobs need to be created each month in order to come out of the present crisis.²  We should realize that the crisis is great.  It is serious and it will not be the last.  Economic crises tend to reoccur at times that we cannot predict.

In 1963 James Boggs said that with the increase in automation in the production process, capitalists would be able to produce more goods (commodities) faster and with fewer workers, which intensifies unemployment.  Racism in the labor market keeps young African-American males a permanent and marginalized sector of the working class.³  There are not enough workers with buying power to purchase all of the commodities; the stores are full and everyone is in debt.  There is a global glut of overproduction and under-consumption creating this crisis and a falling rate of profits.

This is the structural crisis of monopoly finance capital: the latest of three major stages of capitalism.

The first stage was “mercantilism,” which began in the 16th century continuing into the 18th century.  The second stage, “competitive capitalism,” the outgrowth of the industrial revolution, took hold in the late 18th century until the mid 19th century.  The third stage is called “monopoly capitalism,” which began in the last quarter of the 19th century.  It consolidated in the 20th century and became more global in the late 20th century as finance played a larger role in warding off crisis and stagnation through wars, debt, and speculation.

For instance, the dominant U.S. financial firms of 1909, J. P. Morgan, Goldman Sachs, and National City Bank are still at the center of the economy one hundred years later.  One notable exception was the failed Lehman Brothers which lasted for 99 years.

The stagnation tendency endemic to the mature, monopolistic economy, it is crucial to understand, is not due to technological stagnation, i.e., any failure at technological innovation and productivity expansion.  Productivity continues to advance and technological innovations are introduced.⁴

In this period from 1974-1975, the U.S. economy and the world economy as a whole entered into a full-fledged structural crisis after a long boom.  Thus began decades of deepening stagnation.  The finance bubble provided a partial fix for the economy, which resulted in mountains of debt and tremendous growth in financial profits.  What also resulted was the increasing dependence of the entire economy on one financial bubble after another, which kept the economy afloat.

Every crisis leads to a brief period of restraint, followed by further excesses.  Other external stimuli such as military spending, continue to play a significant role in lifting the economy, but are now secondary in impact to the ballooning of finance.⁵

Another stimulus to the economy has been the privatization of prisons, a constantly increasing prison-industrial complex and a drug culture/illegal economy that is laundered 24/7 into the legal economy.  This has created the “silent” criminalization and genocide of two million African-Americans and has devastated African-American families and communities.

The official unemployment rate for African American men was 15% as of March 2009.

Over a third of young black men, ages 16 to 19 in the labor market are unemployed.  In fact a recent report found that 8% of all black men have lost their jobs since November 2007.⁶

The Center for Economic and Policy Research estimated that African-Americans in manufacturing jobs fell from 23.9% in 1979 to 9.8% in 2007.

African-American men have been affected by the instability in the automotive industry.  They earn higher wages than in other industries and make up a fifth of the workforce.  Twenty thousand African-American autoworkers were either laid off or took buy-outs from the Big Three in 2008.⁷  Three million jobs could be lost within the next year — a result that would grossly affect African-Americans if one or more of the domestic automakers were to fail.

African-American workers suffered from a severe decline in decent employment opportunities and have also faced decreasing rates of unionization related to the shrinking manufacturing industry.  The median unionized African-American worker earned about $17.51 per hour from 2004-2007, compared to $12.57 per hour for his non-union counterpart.⁸  The unionized workers were also more likely to have health insurance and pension plans.

Black men have traditionally held the highest union membership rates of all demographic groups.  In 2008, 15.9% of black men were members of unions, the greatest participation of all groups and higher than the national average of 12.4%.  However, black union membership has been declining at a faster rate than membership among whites since the 1980s.⁹

Thus African-Americans are impacted by the military-industrial complex, the prison-industrial complex, and finance capital.  C. L. R. James, in his article “Black People in the Urban Areas of the United States,” says,

. . . The Black people in the United States are the most socially united group in the country, they all have one unifying characteristic — they suffer from that historical development which has placed them in the role of second-class citizens.  There is no other national group which automatically constitutes one social force with a unified outlook and the capacity to make unified moves in politics and to respond to economic problems.¹⁰

Henry Nicholas says, “The only thing we own is our labor power.”  We should learn to use our labor power to serve ourselves, African-American workers.  We should use the unions we are in for the benefit of our people.  We should use our spiritual power to develop economically self-reliant projects through our churches and masjids (mosques).  Thus unions, churches, and mosques should be our bases of power.  If we utilize them for economic self-reliance and unite with progressive allies, we will have a collective financial basis for workers’ “people power” wherever we reside.

Dr. James Garrett says we need five ingredients for economic self-reliance:

1. Development of a core group to generate capital formation or accumulation that would develop industrial companies.
2. Utilization of land where we are.  Dr. Grace Lee Boggs in her article, “A New Kind of Organizing,” talks about community land trusts (CLTs).  These are unique forms of common-based property rights where a block of land is removed from the real estate market and owned by a people’s board of trustees, possibly a community development corporation.  These community land trusts could be investment projects of African-American workers’ funds, which can be negotiated with a developer, to grant seed money to undertake a development which includes individual houses, sites for businesses, parks, and community centers, etc.  Within this utilization of land where we are is the movement that Dr. Boggs has implemented in Detroit, Michigan: the formation of organic community urban gardens.  The Universal Negro Improvement Association (UNIA) in Philadelphia has a Black Farmers Market where the produce of Black farmers is sold.  The institution of neighborhood installation of solar paneling in homes, the establishment of health food stores and other co-ops and fish farms, as Dr. Claude Anderson has advocated, is essential.  All this develops at least a three-day supply of food in times of crisis.  In the area where we live, we should think about water: purification, treatment, and harnessing.  Eventually we should turn our community into Green communities; and we should invest in wind energy.  During the 1930s, Ella Baker organized Housewives Leagues into collective buying cooperatives where neighbors bought in quantity, cutting down on costs.
3. Consolidation of capital, which can be done through credit unions.  There are 43-50 credit unions in Philadelphia.
4. An organization — every project needs organization.
5. People who are willing to be trained to make the project theirs and willing to accept the awesome responsibility of leadership to take over and continue the organization.  They must be willing to sacrifice and be dedicated, sincere, principled and willing to do the work.

Dr. Grace Lee Boggs states that in a new kind of community organizing we need housing groups to assert the right of people to remain in their homes by blockading residences threatened with foreclosures and evictions, forcing banks or lenders to renegotiate loan terms.

Dr. Boggs explains that we can have local production for local needs.  We can create health and wellness, public gathering places, youth development, and conviviality.¹¹  We can grow our own food; live healthier lives, (eat to live rather than living to eat as Elijah Muhammad used to say); create enterprises that will sustain the family and the community; create neighborhood programs (mural painting, theater, dance, sports — Philadelphia has the Black Star Games every summer, sponsored by the Poor and Righteous Nation).

We can create a green economy by bringing together environmentalists, labor unions and the community organizations, to improve the environment.  We can practice energy efficiency by biking or taking public transportation, converting power sources to renewable energy, restoring wetlands and riverbanks, and creating high quality jobs in the modern energy economy.

Dr. Boggs goes on to say that we can bridge the gap between the middle and upper classes who have moved to the suburbs by creating regional councils that struggle to reduce inequities by sharing revenues and reallocating investments.  She calls for a new kind of governing: a movement much like the civil rights movement, that is grounded on a new concept — what it means to be a human being.  This movement empowers citizens with new concepts of ownership, of democracy, to engage in transformative activities, depending on themselves, rather than elected officials.

Here we must start with the concept of Umoja circles.  We can develop a holistic, dialectical, humanist culture and re-education process by creating communiversities that implement the study of progressive African-American labor, world history, and political theory, combined with practice.  It is through a revolutionary politicized culture that the ethos of mass organized struggle resistance movement is passed on to the forthcoming generation.  C. L. R. James said,

I believe that black people in America must recognize the opportunities which history has placed in their hands, not only to record the advancement of their own situation but in regard to the ideas and activities of oppressed people the world over.¹²

A people united will never be defeated.  We will win!  As Salaam Alaikum.

1  John Bellamy Foster and Robert W. McChesney, “Monopoly-Finance Capital and the Paradox of Accumulation,” Monthly Review, Volume 61, Number 5, October 2009, p. 1.

2  John Wojcik, “Needed: 122,000 Jobs Per Month,” People’s Weekly World, Volume 24, Number 15, September 12-18, 2009, p. 1.

3  James Boggs, The American Revolution: Pages From A Negro Worker’s Notebook(New York: Monthly Review Press, 2009), p. 46-61.

4  Foster and McChesney, op. cit., p. 9.

5  Ibid, p. 15.

6  Alexandra Cawthorne, “Weathering the Storm: Black Men in the Recession,“ Center for American Progress,p. 2.

7  Jonathan Mahler, “GM, Detroit and the Fall of the Black Middle Class,” The New York Times, June 28, 2009, p. 3.

8  Cawthorne, op. cit., p. 4.

9  Ibid, p. 4.

10  Anna Grimshaw (ed.), C. L. R. James Reader (Oxford, U.K. and Cambridge, U.S.A.: Blackwell, 1992), p. 375.

11  Grace Lee Boggs, “A New Kind of Community Organizing,” The Michigan Citizen, July 5-11, 2009, p. A10.

12  Grimshaw, op. cit., p. 377.

Related Posts

1. Blacks Hurt Most By Mortgage Based Economic Crisis
2. Communities of color are ‘canaries in the coal mine’ of economic crisis
3. Arizona: Corporate greed for cheap labor
4. The financial crisis is an ideological crisis
5. Current economic recovery is crushing Black America