by Ashley Rogers
Young people today are feeling increasingly trapped by the capitalist system. The over 3.5 million high school graduates in America this year are in a precarious position. The minimum wage remains at $7.25 an hour nationwide—with it, the skyrocketing cost of living. In some areas, jobs are forced to pay $15/hr, but that’s often not enough to survive. Hoping to find a job or a career that could pay enough to keep up with inflation, over 60% of high school graduates head to college. With the vague promise of a well-paying job with a degree, these students are forced to take a financial gamble that will burden them with loans for decades on average with hardly any information about the risk they’re taking. Half of those who graduate college will still live paycheck-to-paycheck, and a quarter will make less than $30k/year–less than the average income for workers who haven’t completed any college. Crushing debt, stagnant wages, worsening living standards, mounting inflation, and a growing climate catastrophe have led many young people to conclude that capitalism has no future to offer youth.
While corporate politicians and media continue to hold on to hope that the recessionary economy is just a temporary result of the pandemic, the truth is becoming harder and harder to ignore. Workers’ confidence in the economy is low, with skyrocketing rents, high housing prices, and the U.S. Gross Domestic Product (GDP) shrinking for the second quarter in a row. Yet, the corporate media and the Federal Reserve, the country’s central bank, continue to point to high corporate profits as evidence that the economy is doing fine. The recent surge in corporate profits was largely from intensified exploitation and profiteering during the COVID pandemic. Workers lost $3.7 trillion in earnings in the first year of the pandemic. Over the same period, billionaires gained $3.9 trillion.
Inflation in June hit 9.1%, the highest recorded value in over forty years, eating away at workers’ wages and savings. While often described as a force of nature out of human control, inflation directly results from corporations jacking up prices to fleece consumers. Surging gas prices coincided with a 240% jump in Chevron’s profits, one of “the best two quarters the company has ever seen.” General Mills has raised prices five times over the past year, increasing its corporate profits last quarter by 97% while paying out over $2 billion in handouts to shareholders. Corporate profits have been at their highest level since 1950. This increase has touched everything from food to household necessities to rent, gas prices, and utility costs. From March 2021 to March 2022, the average cost of living increased by 13%. And while the pressure of the pandemic-caused “labor shortage” brought an increase in wages for some, inflation has more than wiped out these gains. Adjusted for inflation, the average worker made 3% less in July 2022 than in July 2021. The Federal Reserve Bank cheerfully reported in early August that foreclosures are beginning to return to “more typical levels” as pandemic eviction protections expire – foreclosures jumped by 45% in the previous quarter.
The only people who are safe from this recession are the capitalist class. While workers suffer, the super-rich are in a perfect position to profit from our misfortune. Investment company Blackstone announced a new $50 billion fund to profit from residential real estate “bargains” as the recession forces workers out of their homes. Money spent on tech acquisitions in the first half of 2022 is up 58% compared to last year as the recession drives the consolidation of the tech industry under a few big players like Google, Microsoft, and Amazon.
In fact, some capitalists believe the recession will be better for their profits. The so-called “great resignation” following the COVID-19 pandemic put pressure on capitalists to respond to workers’ demands for higher pay and better conditions. With the recession, they hope the “great resignation” will reverse. For example, the CEO of multi-billion dollar real estate corporation Douglas Emmett, Inc said on an earnings call earlier this month that the recession could be good for profits “if it comes with a level of unemployment that puts employers back in the driver seat and allows them to get all their employees back into the office” – in other words, the recession could be good because it could threaten workers’ finances and make them have to settle for less.
Young workers, often forced to work the lowest-paying, so-called “entry-level” positions, were the strongest driver of the “great resignation.” 37% of young adults left their jobs in 2021 compared to only 17% of those aged 30-49. Corporate media often credits this to “entitlement” or a “lack of work ethic” among today’s young people. Healthcare CEO Daniel Greenleaf published an opinion piece in the Wall Street Journal titled “A Rude Awakening Is Ahead for Young Employees: A recession will hand the bargaining power to their bosses,” where he promises that the “days of expecting employers to be grateful for your application will be gone soon.” In effect, these capitalists hope that higher unemployment during the recession will make young workers more desperate and less militant.
Biden’s “solution” to the student loan crisis is not enough
Since the pandemic began, much attention has been paid to the student loan payment pause that started under Trump. With its expiration date already kicked down the road six times – first by Trump, then by Biden, it was just extended to December 31st, a permanent end date. It’s doubtful that between now and January 1st, workers will have the ability to resume making payments. It’s suggested that if the pause were to end now, 93% of student loan borrowers wouldn’t be ready to resume payments. Despite various promises around student loan “forgiveness” being part of his platform, it has taken until right before election season for Biden to even begin to chip away at the edges of the massive student loan debt crisis and has only now acted on a small amount of student debt cancellation in an attempt to rally support for the Democratic Party in November’s elections.
The actions of the Biden administration against student loan debt do nothing to address the ridiculously high cost of higher education fundamentally. Instead, small amounts of student debt from predatory for-profit schools have been canceled, including the recent cancellation of $3.9 billion in federal student debt for students of ITT Technical Institute. Moves like this grab flattering headlines crediting Biden with student loan cancellation when, in reality, this move comes as too little too late for students of a school that was allowed to operate and receive federal student loans for decades after its predatory practices first came to light. Meanwhile, this $3.9 billion is a drop in the bucket against the $1.7 trillion combined student loan debt held by 45 million Americans.
Wiping out $10,000 in student debt for borrowers making under $125K will help millions of workers, but it is, at best, a temporary band-aid on a much larger crisis. Moreover, with interest rates predicted to increase, $10,000 may only make a small dent in certain borrowers’ debt. Ultimately, what would solve the crisis is canceling student loan debt across the board–just as debt was canceled for huge corporations like AIG and GM during the last recession–and instituting free higher education so that the student debt cycle finally ends.
This situation can’t help but invite comparisons to the Obama administration, under which Biden was vice president. During the 2008 election, Obama expressed support for a single-payer healthcare system, a watered-down version of the demand for a universal public healthcare system that most Americans have supported for decades. He began to walk back his positions once in office, earning frustration from his supporters as his party’s inaction pushed many away from the Democrats and often away from politics entirely. In 2010, with the midterms fast approaching, he signed the Affordable Care Act into law. Hailed by Democrats as a “compromise” of his promised healthcare reform, the act embedded private health insurance even further in the American health system and subverted the chance of real action on free universal healthcare. With his inaction in office—despite Democratic control of the House, Senate, and Presidency during the first two years of office—capped by what many saw as a betrayal of his campaign promises, Republicans gained 63 seats in the House, the largest swing in a single election in over sixty years.
Mounting debt crushes young workers
Student debt isn’t the only kind of debt we’re facing. Total household debt jumped to a record $16.15 trillion last quarter. As the pandemic and high inflation empty workers’ bank accounts, we’re increasingly relying on credit cards to pay the bills—credit card debt grew by $46 billion in the last year, the largest increase in over 20 years. Americans now hold $2 trillion more in debt than before the pandemic. The economic situation is putting a squeeze on all workers. Delinquency rates, particularly for credit card and auto loans, are up, especially in low-income areas. Those who previously enjoyed some financial stability now find themselves in a much more precarious position. Those who were already financially unstable are being pushed to the brink of bankruptcy, with some pushed over the edge. Young people who are often still trying to “get their footing” on their own are among the workers hit the most by economic hardship.
Over one hundred million Americans now have medical debt, estimated at a total of $195 billion in 2019 and likely larger now. Two-thirds of people with debt have put off the care they need because they can’t afford it. One in seven have been denied access to a medical provider because of unpaid bills. 63% of people in debt reported cutting spending on food or other necessities because of their debt. 17% have declared bankruptcy or lost a home.
Meanwhile, while the pandemic increased operating costs for the healthcare industry, American hospitals increased gross profits by 12.1% compared to 2019, their most profitable year on record. As a result, the United States has the most expensive healthcare system in the world, yet ranks last in terms of quality, access, and healthcare outcomes among ten similarly wealthy, industrialized nations. Yet even after a global pandemic, the possibility of a free, universal healthcare system in the U.S. seems farther away than ever.
Once discussed as a hypothetical problem for future decades to solve, climate change is now a present emergency. This summer has brought record-setting heat waves and droughts worldwide, with Europe set to experience its worst wildfire season on record. Analysis now predicts that heat waves like the one that hit Europe this year will become commonplace by 2035–even if all of the non-binding greenhouse gas pledges made in the 2015 Paris Climate Agreement are met.
Climate change offers an existential threat to human society. The capitalist system undeniably created the climate crisis, with just 100 companies responsible for 71% of carbon emissions. Exxon scientists learned about climate change as early as 1977 and buried the evidence for decades, denouncing scientists who spoke out and paying millions of dollars to back “climate skeptics” to cast doubts on the science. Yet it’s also a problem that capitalism can’t solve. International agreements like the Kyoto Protocol and the Paris Agreement suggest the idea of international cooperation to solve the problem, but these agreements are grossly inadequate and fail to keep climate change to “acceptable” levels even if every pledge is met. The problem is too big for simple regulations; the planet can only be saved through democratic planning and running of the economy by the working class. Only under socialism can we run the economy for our needs and environmental sustainability.
Recently, the Democrats’ “Inflation Reduction Act” has been billed as “the most aggressive action to combat the climate crisis in our nation’s history”–which, if true, only goes to show how little action has been taken by the corporate political parties. In reality, the Inflation Reduction Act is a big gift to oil & gas, guaranteeing drilling rights on public lands and mandating that solar & wind leases can only be offered if the government has provided public lands and waters for oil & gas leasing in the previous year–essentially meaning that the government can’t allow renewables on public land without giving the fossil fuel industry priority first. The new leasing from this bill will produce an estimated 77 million to 110 million additional tons of carbon dioxide annually by 2030.
Addressing the climate crisis will take a massive effort organized across national borders. This means huge investments in mass transit, green energy production, and infrastructure, which capitalists and their corporate politicians fight to avoid paying for. Nor will the massive fossil fuel industry, which made a combined global total of $2.1 trillion in revenues last year, accept the necessary steps to move away from fossil fuels and minimize pollution. The effects of their $119 million spent on lobbying in 2021 can be seen in the Inflation Reduction Act. Even if enough pressure could be put on the fossil fuel industry to force the transition, under capitalism, this would kick workers out of their jobs and leave them high and dry with no ability to move to a new industry.
Young people increasingly realize that socialism, not capitalism, offers the solutions to the climate crisis. Socialism means democratically organizing the way resources are produced and distributed in service of human needs rather than profit. By taking the top energy companies and utilities under public ownership, workers would get the power to make these world-changing decisions about the climate democratically. Under capitalism, decisions about the environment are in the hands of the big corporations, the super-rich, and the governments they control. The wealth and resources already exist, from the labor of working people, for a socialist Green New Deal, including funding public works programs that provide high-quality jobs cleaning up the environment, building renewable energy, and expanding public transit infrastructure. Importantly, only a socialist response to climate change can ensure a “Just Transition” to more sustainable production and distribution methods, with guaranteed full pay, benefits, retraining, and new jobs for workers displaced in shutting down and transitioning from polluting industries.
Youth fighting for socialism
The need for socialism–bringing democracy to the economy–is now more critical than ever. The future under capitalism is bleak for everyone, particularly youth, as we face economic instability, worsening inequality, and environmental crisis. The fight for socialism includes winning immediate gains in living standards and social benefits. Free higher education, free universal healthcare, and a national jobs program with union wages and benefits focused on building public housing, mass transit, and improving the environment are some changes we can organize for now. To win these and other necessary demands, it will take breaking with corporate politics and forming a new, independent political party of working people and youth to strengthen and unify our fight for a decent future which can only be realized through socialism.