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.

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