How To Profit From Surplus Workers

What does America do when she no longer needs her slaves or surplus workers?
The 1880’s reconstruction era was the first time in our history that America had seen a large surplus of non-white labor. In the 1870’s many former slaves were integrated into the labor force, but white backlash in the 1880’s and 1890’s led to a permanent underclass through nearly a century of “separate but equal.”
For very different reasons, there was a similar surplus of white labor in the early 1930’s.

Regardless of race, capitalism runs in cycles: It’s called “the business cycle.” There are uptimes when there are jobs for everybody, the labor market is tight, and pay rises. Then there are downtimes when the economy has a surplus of workers, falling wages, and a high level of unemployment. We saw this cycle during the boom-and-bust of the roaring 20’s and the stock market crash and Great Depression of the 1930’s. After the crash, nearly a third of American workers couldn’t find a job, and the numbers were even worse in minority communities.Our economy couldn’t put them to work, because capitalism failed.
So what do you do with all of those extra workers who can’t find a job?
In the 1920’s and 1930’s, that very question was the subject of a clear and open disagreement between Democrats and Republicans. Herbert Hoover and the Republicans believed that when capitalism fails and you have high unemployment, you do nothing. You wait for the “free market” to magically fix things, and for capitalism to right the ship. FDR and the Democrats believed that the Republican’s benign indifference was the completely wrong approach. Instead, FDR said that it’s the responsibility of government to put people back to work during times of high unemployment. He enacted his New Deal.  He put Americans back to work planting trees and forests, building schools, and improving the nation’s infrastructure.  Twelve million Americans who’d been unemployed for years went back to work, and capitalism was rebooted in America.

For much of the 20^th century, Hoover’s and FDR’s approaches represented the two sides of the debate about what to do with surplus workers. Up until 1980, Republicans said you waited for the market to absorb the surplus of workers, while Democrats said you proactively used the powers of government to put Americans back to work. But then Ronald Reagan came to Washington, and everything changed. When Reagan stepped foot in the White House, he said the job of the government was not just to ignore a surplus of workers, but to figure out ways to make a buck off of them. Reagan lived by the notion that profit was king.  If America’s businesspeople always and only did whatever made them the most money, that would magically cure all ills with supply-side fairy dust.
He fundamentally changed the way that we deal with surplus workers. Instead of ignoring them, or having the government put them to work, there was now a third option. Make a profit off of them.

There are a variety of ways capitalists make a profit off of poor and unemployed people, from payday lenders, to “rent to own” furniture stores, to the most radical of them all: Turn them into prisoners. That latter is the most radical, and has turned out to be the most profitable for America’s capitalists. It’s almost elegant in its simplicity. Turn unemployed Americans into criminals. Track them, punish them for any crime possible, take away their rights and throw them into for-profit prisons. Once thrown inside a for-profit prison, an inmate needs food, housing, healthcare and other services. This means huge profits for capitalists.  They’re raking in tens of thousands of dollars per prisoner per year – hundreds of percent more than Roosevelt paid to simply put them back to work.  And turning unemployed Americans into very profitable prisoners is a booming business.
From the beginning of America until 1980, the incarceration rate in America remained fairly steady. While Nixon declaring his war on drugs in 1971 did slightly increase incarceration in the United States, the increase was nothing drastic. But then Reagan came to Washington, and his buddies realized they could make a buck off of unemployed Americans. The nation’s incarceration rate took off like a rocket.

Thanks to Reagan elevating profit to a religion, between 1980 and 2009, the state and federal prison population in the U.S. increased by over 700 percent.
Since the for-profit prison industry started aggressively buying Congressmen 15 years ago, the number of people thrown into for-profit prisons has exploded.
And Americans sitting in jail make a very exploitable, very profitable, slave-like labor force. According to the Prison Policy Initiative, the minimum wage for a prisoner who works in the UNICOR program, the federal government’s prison industries program, is 23 cents an hour.  The maximum UNICOR wage is $1.15 an hour. Across all state prisons, the average minimum wage for prisoners for non-industrial work is 93 cents per hour.And some states, like Georgia and Texas, are completely upfront about their slave-labor camps. They pay absolutely nothing to prisoners.

Because the Reagan Revolution changed America’s value system, we stopped asking, “What’s the best way to deal with surplus workers?” Instead, we started asking, “How can we make the most money off surplus workers?” The logical answer was a return to slavery, and it has been embraced by capitalists with a vengeance. And that is insane brutality.

from here (Thom Hartmann)

Socialists would also point out that whilst there are booms and busts for the working class as well as for the capitalists and that some eras have been better than others for some of the working class, at no time has there been a period, however short, when employment, anywhere, has been 100%. No matter where on the planet, under capitalism there have always been plenty of would-be workers going hungry, scratching a living, homeless or just plain destitute. 
Within socialism, on the other hand, 'surplus' workers will be a thing of the past. Everyone will be free to contribute their particular effort, skill, brain or brawn for the common good without fear or favour.
JS