Friday, August 30, 2013

Civil Rights: Fifty Years Out, and Two Paths to Choose From

Wednesday was the fiftieth anniversary of perhaps the greatest speech in American history.  Martin Luther King Jr. told the nation he had “a dream” about a colorblind America, which, with laws forcing racial segregation and some remarkably ugly responses to demonstrations, was much farther away than now. 

The centerpiece of the country’s great transition since, our black President, affirmed on this anniversary that he too is a world-class practitioner of the speaker’s art.  He superbly recapped those 1963 events, and explained how and why the efforts of those involved brought the United States into the modern civil-rights world.  He also brought up something that has seemingly been lost from our collective memory:

In some ways, though, the securing of civil rights, voting rights, the eradication of legalized discrimination – the very significance of those victories may have obscured a second goal of the March.  For the men and women who gathered 50 years ago were not there in search of some abstract ideal.  They were there seeking jobs as well as justice – not just the absence of oppression but the presence of economic opportunity.  For what does it profit a man, Dr. King would ask, to sit at an integrated lunch counter if he can’t afford the meal? ...  And Dr. King explained that the goals of African Americans were identical to working people of all races.

Indeed, the complete official name of the 1963 rally was “The March on Washington for Jobs and Freedom.”  According to William P. Jones, writing in The New York Times on Tuesday, the demonstration originated with the Negro American Labor Council.  Long-time trade union member A. Philip Randolph, who had had a similar idea 22 years before, sought an emphasis on the weaknesses of then-President John F. Kennedy’s economic programs, and only later did that lose out to King’s primary cause of removing legal discrimination.  Yet the issue of jobs remained closely related.

Over the half-century, along with the removal of legal sanctions against blacks and those in other groups, the civil rights movement has itself changed, and not for the better.  Shelby Steele, an author and senior Stanford fellow, last month wrote a Wall Street Journal opinion piece titled “The Decline of the Civil Rights Establishment.”  In it, he explained how those who might now compare closest to the likes of contemporaries King, Malcolm X, and Medgar Evers, specifically Jesse Jackson and Al Sharpton, are not even close in “moral authority” or the pursuit of true justice.  Modern issues such as the acquittal of a white man shooting a black teenager who had just broken his nose cannot compare to the routine impediments around workplaces, buses, lunch counters, and other daily life settings legally sanctioned against millions.  Steele also mentioned the lack of the likes of Jackson and Sharpton to address what might be called self-inflicted abuses, such as the three-hundred-plus black teenagers annually killed by other blacks in only one section of one city, or the current 73% black illegitimacy rate, and calls today’s civil rights leadership “irrelevant.”

Whether you agree with Steele or not, it should be clear that today’s bigotry-caused racial problems, while still present, are much milder than they were in 1963.  That means the aggregate of organizations working to reduce racial discrimination cannot possibly be as significant as they were when King spoke.  So what can they focus on now?

We know the answer, from above:  Jobs.

Here, though, we have two possible paths.  One is represented by other news from this week – the fast-food workers’ demonstrations.  (I hesitate to call them “strikes,” because the people involved are not unionized.)  There has been a growing national movement by these low-paid laborers to earn more, usually in conjunction with a higher minimum wage.  Unfortunately, forced pay increases would cost jobs, driving the national shortage well over its current 21.5 million, and would widen a less publicized but very real type of inequality, that between those working and those who only want to be.  Although few if any of the Burger Kings, McDonalds’, and Wal-Marts would be seen dropping positions immediately after a large raise in the minimum, they would later have innumerable opportunities to cut their numbers, through staffing of new locations, articulation of ever-growing automation and efficiency, and simple attrition.  Local businesses, usually less profitable, would do proportionally even worse. 

The second path was described by Obama in Wednesday’s speech:

The test was not, and never has been, whether the doors of opportunity are cracked a bit wider for a few.  It was whether our economic system provides a fair shot for the many – for the black custodian and the white steelworker, the immigrant dishwasher and the Native American veteran.  To win that battle, to answer that call – this remains our great unfinished business.

We shouldn’t fool ourselves.  The task will not be easy.  Since 1963, the economy has changed.  The twin forces of technology and global competition have subtracted those jobs that once provided a foothold into the middle class – reduced the bargaining power of American workers.

Raising the pay of fast-food and other low-wage workers from its current almost $9 per hour to $12 or $15 will not get us “a fair shot for the many.”  Middle-class lifestyles with new cars and owned standalone houses will not come from higher minimum wages.  We need to look at some real solutions – guaranteed income (advocated by, among many others, none other than Martin Luther King), shorter working hours, payments for electronic information, and other possibilities people want to describe and defend.  Among them, if it is anywhere, is the way to the original dream of that 1963 event.  The jobs crisis is not a black or white issue, it is an American one.  As Obama said, from the same speech:

The March on Washington teaches us that we are not trapped by the mistakes of history, that we are masters of our fate.  But it also teaches us that the promise of this nation will only be kept when we work together. 

Thursday, August 22, 2013

Four Casinos in New York State – A Winner for Jobs and Beyond

In elections, people must usually choose from two or more political sides, each with its own philosophy.  We must therefore choose an ideology before filling out our ballots.  A chance to vote directly on an action to be taken or not taken, not hidden within any political view, is much less common, and an opportunity to weigh in on something that will clearly and directly affect the number of jobs in an area is rarer still. 

That, though, is what New York state voters will have on November 5th. 

New York State Assembly Bill 8068, also known as Proposition 1 or the New York Casino Gambling Amendment, calls for a total of four full-service gambling houses to be built in three upstate areas:  the Catskills,  the Binghamton area, and around Albany or Saratoga.  After seven years, three additional casinos would be approved for the New York City area.  The measure passed the Statehouse March 18th and the State Senate on June 4th, with unanimous approval both times.  Since the bill would involve revising the state constitution, it must now be approved directly by the voters.  So what are its merits?

A pro-amendment organization, operating under “Vote Yes for NYS Gaming Amendment” and similar phrases, named “property tax relief, job creation, and more education funding” as reasons for passing the proposition.  The case for casinos in the areas mentioned, though, goes much deeper.

First, the increased tax revenues, from income as well as corporate profits, could be quite large, and could go beyond either dedicated education support or lowered property taxes.

Second, even just one casino-hotel in each of these areas would help tourism considerably.  It is now almost mandatory for tourist areas catering to adults to have at least one full-service gambling outlet, and racinos, with limited scopes and without table games are not sufficient.  Casino gambling need not be the primary attraction, as it is in Las Vegas, but it needs to be available, as in, for example, New Orleans.

Third, casinos offer recreation to local residents.  Not only do they offer gambling propositions vastly more fair than pari-mutuels and lotteries with their 20% and almost 50% player disadvantages, but the concerts, restaurants, headline shows, and nightclubs would be valued by many. 

On the other side, all of the disadvantages commonly named by detractors are less significant than they may seem.  It is true that about 5% of the population cannot handle gambling, but between lotteries, illegal online propositions, and racinos, they are not nearly as shielded from it as they were before the Internet and the spread of gambling outside Nevada.  Some local businesses would suffer from new competition, but others of similar or greater economic impact would appear.  Casinos are no longer destinations, so we could not expect truly massively increased numbers of visitors, but that same factor cuts down the amount of associated crime.  In all, the proposition’s $500 tax on each slot machine or gaming table earmarked for problem-gambling-helping organizations may make Gamblers Anonymous and similar groups less overwhelmed, not more, given how many people in the area need their services as it is.  Even police involvement may be more than mitigated by the opportunity for larger budgets.

Not every large business venture for Broome, Saratoga, and Sullivan County should be accepted.  Hydraulic fracturing was rejected in almost every township in the latter, in large part because those wanting to bring it in were not able to show how it would help local residents.  The people of every community with as great natural beauty as these three must reject plans that would disturb that too much. 

In that context, the case for casinos, which would involve tearing up only a matter of acres of landscape, is as strong as any we are likely to see.  Old resort areas need new reasons for people to come back.  Full-scale casino-hotels average one full-time employee per guest room – a new or reopened 500-room facility near Liberty, as has been proposed, would mean that many new jobs, in a county with fewer than 32,000 of them now.  Gambling, government sanctioned or not, has loomed large in the histories of both Saratoga and the Catskills, and today’s players want clean, legal casinos where their rights are consistently protected.  New Yorkers living in these areas will gamble whether the proposition is passed or not; if not locally, much of their action will go, as it does now, to Pocono Downs, Foxwoods, Atlantic City, and therefore to the benefit of other state governments.  In exchange for real but generally small and mitigated amounts of non-natural disturbances, we would get more freedom, and, in the case of Sullivan County, a conservative 1% unemployment-rate drop from one such facility all by itself.

Overall, we have to decide what we want.  We can stay with what we have, which has a lot going for it but too few economic opportunities, even for current residents.  Or we can bring in money and jobs in ways that will be unobtrusive to the massive majority of those who do not want to be involved with them.  The choice, in this case, is clear.        

Friday, August 16, 2013

Vonnegut as Jobs Prophet

Kurt Vonnegut, Jr. was one of the great 20th-century American novelists.  Even though much of his writing was science fiction, he wasn’t contained by that genre.  In the late 1970s, when I was in college, his books were staples of English literature classes, yet some professors considered his work too casual, and maybe too popular, for university study.

In 1952, only the year after the first UNIVAC computer, boasting almost 2,000 instructions per second, was delivered to the U.S. Census Bureau, Vonnegut published Player Piano.  This novel was set some time in the future, after a war which had somehow pushed automation so far forward that the vast majority of people were not needed for work.   That predated by 12 years the Ad Hoc Committee on the Triple Revolution’s letter to President Johnson alerting him to upcoming mechanization-caused joblessness, and was 21 years before the start of the Work’s New Age era in 1973. 

So how prophetic was Vonnegut?  Here are some structures of his future American society:

-          Cities were divided into three parts, one where the former workers lived, one for companies and those still employed by them, and one almost exclusively for the nearly-all-producing machines themselves.  Only rarely did people from the first and second sections travel to the other one.

-          The former workers were officially employed by either the Army or the “Reconstruction and Reclamation Corps.”  Most soldiers had no access to weapons, and the “Reeks and Wrecks,” as they were called, had job titles but little if any real work to do.  Boredom was a real social problem.

-          The idle people, often quite hostile to others, were engaged mostly in drinking and various small-scale recreational activities.  Many spent time talking wistfully about the jobs they had had and the trades they had practiced, with a lot of pride in their work.  Those not working often sought out ways in which they could contribute, such as by offering to repair a damaged car driven by one of the first-part residents.

-          Everyone was provided for, with “warm clothes” and “a place to live,” and there was no starvation.

-          The advent of widespread machine takeover of jobs had been followed by riots, which were suppressed.  Eventually there was also a nationwide revolution in which the former workers destroyed many of the machines, which failed as well.

So how do our current situation, and where we seem to be headed, match up with Vonnegut’s world?  One thing he did not anticipate.  Many of today’s job-cutting machines, in contrast to that Univac I which took up 943 square feet of floor space, can be held in a hand, so there is no need for large districts dedicated to them.  How about the other features?

-          Cities are, in a sense, becoming divided between modern-day business zones where many remaining cubicle workers report, and where people live.  It, strangely, has not happened that those employed in offices live nearby, even though their home neighborhoods also have high aesthetics, generally new buildings, and low crime rates.  Yet unemployment now varies greatly between residential sections, from 3% to 70% or more, so we could say our cities indeed have two divisions.

-          Government jobs without real work were a feature of the Soviet Union, but that has not seriously happened much here.  Unless you count a tiny minority of those in the Occupy protests, we have seen remarkably little public hostility from the unemployed.  That may change.

-          In Vonnegut’s story, joblessness came more suddenly than it has in real life, with our 40 years since work was easy for most to get, plus the next 10 to 30, compressed into five or ten.  As a result, stories of good jobs are now passed mostly from generation to generation.   On contributing skills, communities currently provide some outlets but not enough.

-          The social safety net, stronger now than in 1952, is designed to provide clothing, food, and shelter for everyone, and usually succeeds.  As more and more people are unneeded by the workforce, though, the number needing such benefits is increasing, and, with costs rising, we are already seeing discussion about who should be helped and how. 

-          Few have rioted against machines, though the Luddites in the early 19th century did.  Although I have written and spoken about the possibilities of unemployment-driven roving gangs and civil disorder, a broad-based organized attack on automation, or globalization or efficiency for that matter, seems very unlikely to me.  In Player Piano, all seemed to agree that joblessness had one cause, which people could put their hands on and physically destroy.  As per last week’s post, we are only in the stage of proposing explanations for the lack of work, which in fact has multiple causes of which many are unsuitable to rebel against.

Despite these differences, on one thing Vonnegut would have agreed.  The historical transition he foresaw has materialized.  We know neither how it will play out nor how can we make the most of it.  In the meantime, his books should be considered just fine for college courses – especially in the business department.     

Friday, August 9, 2013

Eight Cul-de-Sacs on the Way to Solving the Jobs Crisis

Over the past few weeks, one good thing has happened with the jobs situation.  More commentators seem to be at least starting to suspect that something is going on that is not explained by the Great Recession.   They are correct, since the recovery is not slow but completed, as proven by stock market performance and corporate profitability.  No recession recovery has ever stretched on for over four years, and this one is no exception.  

The bad news is that observers have considered almost every explanation for our economic problems, except for the jobs crisis being permanent.  Here are some recently proposed reasons.

First, the minimum wage is too low.  True, people getting $7.25 per hour even full time cannot afford the house, the two cars, and the good vacations, but the recent push to have the pay of fast-food and other retail workers, say, doubled, in this time of shrinking employment, is totally misguided.  Regardless of company profitability, forced raises in wages cost jobs – though little might happen immediately, two or three years later there would be about 20% to 30% fewer positions than if the minimum wage were unchanged.  If specific companies, such as the most often mentioned Walmart and McDonald’s, chose to do that independently, they would get several times as many applicants for the open jobs they did have, and their competitors could crush them with lower prices. 

Second, inequality, as if that was a problem in and of itself.  In the 1890s and 1920s, and to a lesser extent the 1980s and 1990s, American pay was notoriously unequal.   Yet there was little discussion about it as such, since there were plenty of jobs.  If people are able to work at positions reasonably consistent with their skills, education, motivation, disposition, and so on, they don’t care exactly how much Joe Moneybags down the street has.  Americans know that while opportunities should be equal, outcomes will often not be.

Third, racism, sexism, homophobia, and so forth.  Now that the newspapers finally seem to have finished debating whether a jury’s verdict on one specific Florida confrontation indicated a problem with the quarter-billion American whites, we are seeing more about how conditions are worse for some demographic groups than for others, and efforts to make that the primary problem.  As I showed in Work’s New Age two years ago, the shortage of jobs cuts across all such lines, and will continue to do so.  To imply that it is a problem only for, say, blacks, is to distort and even marginalize the issue.  As for outcomes, as long as there are cultural differences they will vary, and we need to accept that.

Fourth, a second recession, about a year ago, that somehow we didn’t see.  Unreasonable.

Fifth, not embracing the “sharing economy” more.  In particular, author and New York Times columnist Thomas Friedman’s attraction to this trend of people forming businesses by sharing their home space, cars, power tools, and the like.  As Richard Eskow pointed out in the OurFuture blog, even people willing to take these measures often do not have such resources, and other problems such as reliability of these goods and services, such as the need for cars to be assured of not being dangerous, will stop this type of venture from becoming a widespread job-shortage solution.

Sixth, a vast, right-wing conspiracy.  Former Treasury secretary Robert Reich saw such a thing, centering on mainstream newspapers and television (so much for “the liberal media,”) and convincing people of, among other things, the falsity of climate change and the alleged evils of requiring voter IDs (a problem easily solved by states providing them free).  Conservatives, like liberals, are here to stay, and their opinions must be incorporated, not demeaned.

Seventh, the Fox News assertion that the main reason that more Americans are not self-employed is the amount of “red tape” they encounter when starting businesses.  That has been a problem for a century or so, and holding up something this relatively small is a destructive cop-out.

Eighth, also from Fox News, the idea that there is something morally wrong with either receiving food stamps or encouraging those eligible to join the program.  The 4.2 million Americans officially unemployed for 27 weeks or more, to name those in only one category, are enough counter-examples to this attitude by themselves.

Maybe it is healthy that a variety of conceivable causes are being communicated.  When we realize they are not the reason for the jobs crisis, we can move on.  As has been the case since it started in 1973, neither the left nor the right has all the answers.  If many liberals had free run, we would be much like Greece with its $11.00 minimum wage and newly-announced 27% unemployment, with a new, possibly worse “inequality,” between those with pay-supported jobs and the increasing masses without.  If some conservatives had their way, we would have a depression, with growing gangs of those with neither jobs nor social services overwhelming people still working by day and keeping armed vigil out their front doors at night.  

Not the most pleasant of alternatives.  If those pictures are right, then maybe, inaction and all, we’ve been doing just fine – so far.

Friday, August 2, 2013

July Jobs Data: Slight Improvement, but America Still 21.4 Million Short

This morning, a couple of minutes after 8:30 Eastern Time, the Bureau of Labor Statistics released last month’s employment statistics.  The headline story was the unemployment rate’s drop from 7.6% to 7.4%, with a net gain of 162,000 positions.  These seasonally adjusted figures continue a several-month trend of mild improvement, and are, in fact, favorable.  But how good are they really?

Behind the scenes, the picture is much the same.  After two much larger mostly seasonal monthly gains, the American Job Shortage Number, or AJSN, decreased 112,000, to 21.46 million, as follows:

JULY 2013
Latent Demand %
Latent Demand Total
Family Responsibilities
In School or Training
Ill Health or Disability
Did Not Search for Work In  Previous Year
Not Available to Work Now
Do Not Want a Job
Non-Civilian and Institutionalized, 15+
American Expatriates

The largest change was the number of Americans reporting they did not want a job, up 387,000.  The counts of those officially unemployed and those wishing to work but not looking for it for a year declined, 165,000 and 127,000 respectively.  On the non-seasonally-adjusted side, the unemployment rate dropped from 7.8% to 7.7%, and the tally of employed people in the United States was up 272,000 to 145,113,000.

The other released measures of employment trouble were uniformly unchanged.  There were still 4.2 million officially unemployed for 27 weeks or more and 8.2 million working part-time for economic reasons, and the shares of labor force participation and employment over the entire population stayed at 63.4% and 58.7%. 

All in all, we have little drama in jobs this month.  We added about 30,000 more than the population increase requires, but the larger fall in the unemployment rate means that, yet again, people are leaving the labor force by giving up trying to find them.   As long as these fully non-recession times continue, we will see months like this one.  But that should not be confused with progress on the jobs crisis, which is not happening.