Capital Cuts Jobs While Fuel Prices Burn Workers' Wages
The pattern is naked: capital sheds labor, jacks up essential costs, and calls it a transformation. Volkswagen announced plans to slash a further 50,000 jobs as part of its transformation plan, and its shares jumped on the news. The market rewards the purge. Meanwhile, diesel hit a record $5.85 a gallon on Friday, eclipsing the prior mark of $5.81 set in June 2022. Because of the war in Iran, the cost has climbed past the record it reached in 2022 after Russia's full-scale invasion of Ukraine. The people who move goods, harvest food, and commute to the jobs that remain absorb the increase.
The labor market is already contracting. The August jobs report is expected to show a continuation of this summer's soft hiring numbers, just one month after the labor market contracted by 23,000 jobs. A key gauge of the U.S. economy arrives as shoppers weather elevated inflation and central bankers weigh a possible interest rate hike — a hike that would further discipline workers by making borrowing costlier and unemployment more threatening. At the same time, the administration launches a "Foundry School" to turbocharge the manufacturing workforce while auto giants purge headcount.
This is not a cycle. It is a class offensive. The auto giant cuts headcount to appease shareholders while tariffs and China competition become the alibi. Energy profiteers notch records powered by a war the political class fuels. The Federal Reserve stands ready to crush demand — meaning jobs — in the name of price stability that never stabilizes the price of diesel at the pump. The 23,000 jobs lost in a single month are not a statistic; they are 23,000 households facing rent, medical debt, and the same record fuel prices.
The ruling class coordinates without a meeting room. Corporate boards cut payrolls. Energy cartels raise prices. Central banks threaten tighter money. The financial press calls it resilience when stocks rise on layoff announcements. Workers get the bill: higher costs to get to work, fewer jobs to get to, and a political system that treats their immiseration as a macroeconomic indicator. The transformation plan is working exactly as designed — for capital.