Friday, May 17, 2013

Permanence of the Jobs Crisis Gets Good Press - and Dissenters

This week I will have the good fortune to be featured in the New York Times op-ed section – twice.  A letter I sent about the jobs crisis being stable was chosen as the basis of the Sunday Dialogue feature.  In that, a letter is printed on Wednesday, and the newspaper asks for responses.  Several of those are chosen, to which the original writer gives a rejoinder.  The entire package is printed in the following Sunday Review section, usually in the upper left-hand corner of the second page.  All are available online also, including additional letters not in physical print.

The editor sent me a total of 8 letters, of which 4 were chosen for the hard-copy version.  In my second piece I will respond to those four, but the others, which will appear online, had interesting points, along with some misconceptions.  Here is some of what they had to say, along with my reactions:

“Employers are the job creators.  They should not receive any subsidies for jobs they create offshore.”  

Yes – one of the best tax moves we can make is to reward companies for not only creating but maintaining jobs in the United States.  A higher corporate income tax, offset by a credit for each American job, would be appropriate.

“We should have customs duties that include a charge for undervaluation of currencies.”

No.  First, we can’t clearly define which currencies are undervalued.  Second, companies in such countries will often price their products, in effect, in dollars, making currency values less meaningful.  Third, even economists disagree on whether low-priced currency has any real job-killing effect.

“Effective work time reduction requires enough progressive tax reform and income redistribution to compensate for the accompanying wage and salary reductions – and that requires reducing America’s inequalities”

What effective work time reduction mostly requires is a disconnection of work with health insurance.  It is in the interest of employers to have, say, four employees working 60 hours apiece instead of six working 40, because health coverage, among other benefits, is person-by-person instead of hour-by-hour.  Income tax is already progressive throughout the middle earnings range, and inequality as such is not the problem – in two of its most extreme decades, the 1890s and 1920s, there was little concern with it, since there was plenty of work. 

“America’s job crisis is temporary.  It is a result of an aging population and the recent economic crises.  The baby boomers who have delayed their retirements, because of economic fears and uncertainties, have caused a bottleneck in the job market.”

Absolutely untrue.  We have not been in a recession since 2010.  Baby boomers did not plan on fully leaving the workforce at usual ages even before the current financial problems; for example, one 2002 study showed over 60% of them planning to work after their so-called retirements.  The two largest predictors of retirement are poor health and good savings; as a generation, baby boomers are opposite.  There is also the problem of latent demand, with, according to the quite conservative American Job Shortage Number, over 20 million Americans ready to work if they thought it was available, and no scarcity of events such as the 2006, pre-recession, opening of a Chicago-area Wal-Mart which precipitated 25,000 applications for its 325 notoriously bad jobs.

“We should be skeptical of long-term economic predictions and especially of predictions that purport to tell us what is going to be true permanently.” 

Agreed – skepticism is good.  And we should also be skeptical of predictions that things will always revert to how we have always known them.  Three hundred years ago and before, very few people had jobs in the modern sense – there is no reason why that cannot happen again.  We may, indeed, have no labor surplus someday if guaranteed income or much shorter work hours come to pass, but otherwise, none of the three largest job-crisis-creating factors of automation, globalization, and efficiency figure to abate, and there is nothing we can reasonably foresee to offset them.

In all, I am delighted to see the idea of the permanence of our work situation getting major newspaper exposure.  If we can agree on it, or at least consider it a real possibility, we can start the debate on what to do about it.  Until then, it is not a political issue, any more than whether the sun rises in the morning. 

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