By Bill Barry
11:30 AM CST, February 7, 2013
In all of the clamor about deficit reduction and fiscal cliffs, the assumption is that the U.S. economy is basically fine. The "jobs slump" is just that — a slump — so with proper government intervention (or lack thereof), the happy days of full employment will return. After all, the "recession" is just temporary, isn't it?
There is a more devastating prospect: that the lost jobs are gone forever, leaving tens of millions of Americans, concentrated at opposite ends of the age scale, who may never work "permanently" again. If you think this is hysteria, ask your middle-age friends who have lost their jobs about their prospects. Consider that young adults under 25 have a much higher unemployment rate — and 85 percent of recent college graduates say they may have to move back in with their parents. In Maryland, the unemployment rate for ages 16-24 is the highest since World War II.
So where did all of these "permanent" jobs go?
•Technology: From factories where robots make all of the products to each of us who uses an ATM, BGE smart meter or E-ZPass, millions of jobs have been replaced by technology. The relentless push for even greater technology investment also means reduced employment.
•Corporate mergers: As businesses conglomerate, "operating efficiencies" eliminate many jobs that will never return.
•Increased productivity: As the recession of the mid-2000s deepened, employers were both laying off people and assigning additional work to the remaining staff. Gradually, the laid-off workers were permanently replaced.
•"Offshoring": The exporting for the past few decades of U.S. jobs overseas has eliminated millions of jobs at both ends of the skill scale. Not only are repetitive tasks like clothing manufacture and call centers shipped out, but X-rays, for example, now can be read anywhere in the world. As a measure of this loss, the U.S. trade deficit in November was $48.7 billion.
•Decrease in government jobs: Government was long considered the employer-of-last resort. No longer; in December alone, government jobs decreased by 12,000 as a result of decreased tax revenues. Increasing unemployment, of course, will further decrease tax revenues. "Sequestration" cuts would eliminate another 1 million jobs. So where will these displaced workers find another spot?
•The underground economy: With the surge of millions of undocumented workers into an already precarious economy, many "jobs" don't officially appear as such; they are day labor, cash only or private contractor.
•Part-time work: Especially in the hospitality sector, like fast food, there is no "normal," so nearly every employee is considered part-time. Workers face erratic and unpredictable hours. The announcement by some chain owners that they would further cut hours to avoid providing health insurance is simply an extension of industry practices. As work is de-skilled, it becomes not only possible but desirable for employers to bring in part-time or underground workers instead of full-time hires.
•The recession: the scapegoat that conceals the permanent loss of jobs. Yes, the recession has hurt, but it was in part the product of the change in the economy as demand from workers who are losing their jobs dried up.
So, the question is: Now what? We have to drastically change the U.S. economy to put people back to work. Here are some things we should do:
•Shorten the workweek. The eight-hour day was a union demand in the 1870s and the 40-hour week became standard in 1935, and even as productivity soared the hours have not dropped. All of the gains have gone to the top 5 percent as profit and dividends. John Maynard Keynes in 1930 predicted that technology and productivity would be so powerful that the 15-hour week would be "normal."
•Lower the retirement age to at least 60. In the 1930s, when Francis Townsend developed a plan for Social Security, one of his goals was to make it so attractive for people to retire that jobs would be opened up for younger workers. The numbers of workers filing for Social Security at younger ages today is a prime reflection the desperate economy.
•National health care. A grievous problem with the loss of a full-time job is the loss of health insurance. President Barack Obama's health care program is inadequate to the problem; only a national single-payer, "Medicare for all" plan would stop the anxiety that comes with unemployment when your children need to see a doctor.
•Increase the minimum wage. If the federal minimum wage had increased with inflation since 1968, it would be almost $11 an hour — not enough to live on, but enough to give a huge boost to economic demand.
•Expand unionism. All the numbers demonstrate that unionized workers get higher pay and better benefits, and that these standards are passed along to nonunion workers. This is the basic reason why the top 5 percent want to eradicate unionism from the U.S.
Would these proposals drastically change the US economy? Absolutely. Would they — gasp! — redistribute the wealth? Positively.
Would they require a whole new political movement, away from the two parties controlled by the wealthiest 5 percent? For certain.
And yet without such a bold plan, the overall U.S. economy will continue to sink, propped up by unsustainable deficit spending that puts us eternally at the edge of the financial cliff, wasting trillions of dollars in interest payments that could otherwise be spent productively. More importantly, without such a change our children will never know the security and employment that we have known — a human element that should be the most urgent motive.
Bill Barry is the retired director of labor studies at the Community College of Baltimore County-Dundalk. His email is firstname.lastname@example.org.