In The Wall Street Journal, David Wessel puts the number of unemployed in perspective:
- There are more unemployed people in the U.S. than there are people in the state of Illinois, the fifth largest state.
- In fact there, there are more unemployed people in the U.S. than there are people in 46 of the 50 states, all but Florida, New York, Texas and California.
- There are more unemployed than the combined populations of Wyoming, Vermont, North Dakota, Alaska, South Dakota, Delaware, Montana, Rhode Island, Hawaii, Maine, New Hampshire, Idaho and the District of Columbia.
- If they were a country, the 13.9 million unemployed Americans would be the 68th largest country in the world, bigger than the population of Greece or Portugal (each of which has 10.8 million people) and more than twice the population of Norway (4.7 million.)
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but the story the media is writing about (when it’s not preoccupied with political gamesmanship between the R’s and the D’s) is much more likely to be the deficit than unemployment.
Kristof wrote about this yesterday: “Did We Drop the Ball on Unemployment?”
Spoiler alert: yes.
I thought we were trying to get the media to write about those mean Republicans and their terrible tweets.
The job market has collapsed into a bathtub, with high demand for very skilled professionals at the top, high demand for unskilled and low-paid hourly workers at the bottom (lawn care, dish-washing, that sort of thing), and nothing in between. This is a direct consequence of our success at automating away the jobs that have, until around the turn of the century, sustained the middle class.
Those jobs aren’t coming back.
The solutions that make sense are those that prepare significant numbers of people for those top-end jobs and others that restructure our wealth distribution system to provide for those left behind.
We need to be making high-quality undergraduate and graduate programs available at little or no cost (the Europeans are WAY ahead of us in this). We need to stop thinking that our 10-20% unemployment rate is some sort of short-term anomaly and start removing the stigma attached to it, while simultaneously raising and extending unemployment benefits.
Most importantly, we need to invent a new paradigm for distributing wealth in a post-labor economy. Our industrial-age intuition of relying, directly or indirectly, on labor simply doesn’t work in an information-age economy. One creative man or woman who creates the software that controls a factory full of industrial robots creates more wealth for the owners and destroys more wealth for the workers than ALL of the workers he or she displaces. That’s why corporate owners pay for those programmers. That programmer doesn’t necessarily have to sit in an office to create that wealth, and the hours that the programmer works are only vaguely related to the amount of wealth they create.
We are still just beginning to understand the impacts and implications of the dizzying explosion of technology that happened between, say, 1960 and today. In particular, we are just beginning to understand the economic impacts on our culture as a whole.
We can’t afford the “austerity” that elected officials on both sides of the aisle are blathering on about. Imposing these changes takes away goods and services from nearly everyone, and uses the resulting “savings” to pay even more money to the already-wealthy creditors that hold the national debt (think about who owns T-bills, in a minimum denomination of $10 K).
No nation in human history has survived the attempt to sustain the wealth concentration that our moneyed upper crust has already attained (though many have tried and failed). The shinola has only begun to hit the fan.
To paraphrase the old commercial, we can pay now or we can later.
You seem to be saying that we have to accept unemployment in the 10-20% range, which I cannot do. We’ve replaced obsolete jobs with more modern jobs in the past and I trust we can do so again.
I think this is the wrong way to go. “Welfare” as a way of life is a bad thing – and I’m speaking as a Progressive here. Employment is more beneficial to a family than being on the dole. I live in a city where a lot of people are unemployed – many of them never employed – and are receiving assistance. We have a lot of crime, we have a lot of people who take advantage of this population, we have a lot of hopelessness, and we have created a city that the middle class works really hard to avoid.
It would be a lot better to keep 20,000 jobs in Springfield than it would be to eliminate 20,000 jobs but put the people formerly employed on some kind of welfare, even if their salary and benefits were identical. Having a purpose in life is essential to the human spirit, and when people are paid just to live, it harms them, it eats at their souls, it kills their spirit.
Not to mention that a welfare state will always be attacked by conservatives, the welfare state depends on who is in power.
We need more jobs, not more welfare. And to be clear, I feel like my position differs from a Republican position in that I think that we need to bring the jobs up first before cutting the welfare, whereas Republicans lobby to cut the welfare first in the mistaken belief that this will somehow create jobs.
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The jobs are gone, whether you accept it or not.
As I attempted to express above, the “modern” jobs you refer to replaced “obsolete” jobs because of productivity gains (primarily). Increased productivity only strengthens the economy when demand is essentially infinite. We have astronomical unemployment because we don’t need and can’t use all those workers in the middle of the “bathtub” I referred to above.
“Trust” and “faith” will not change this scenario. The fundamental premise — that hard work translates to increased wealth — is obsolete, along with the jobs tied to that premise.
When we view labor as a wealth-distribution mechanism, we can see more clearly what has happened. Until WWII, most households had just one worker. While it’s true that our consumption standards were lower (most households also had just one bathroom, one car if any, and so on), it’s also true the “economy” — writ large — functioned with MOST household members OUT of the workforce.
We essentially doubled the workforce after WWII. By the end of the 20th century, most households had at least two workers. Having one parent stay home with young children became a luxury affordable to only a few upper middle class families. Now, the teenage children of most families also work.
All of this had the effect of spreading the more-slowly growing wealth more thinly. While it’s true that the standard of living increased along the way, that increase was far smaller than amount of wealth collected by corporations (and the people who own them) along the way.
This unsustainable house of cards began to collapse during the prior administration, and that administration chose to obscure it by covering it with debt — consumers borrowed against their homes in order to maintain their lifestyle. The government encouraged the financial industry to participate in this massively-fraudulent Three Card Monte scheme and run up the paper value of real estate to obscure the rot that was actually eating away the foundation of the economy.
The first major collapse of 2008 should have been enough to bring us to our senses. It clearly was not.
The jobs won’t come back because we don’t need them. What we need is to find a way to more equitably distribute the wealth of our economy among its households without forcing the production of even more un-necessary consumer goods and services. We already have TOO MANY automobiles per household. We already have TOO MANY bathrooms (never mind Jacuzzi’s) per household. We already have a massively over-sized footprint on the resources of the world — making that footprint even larger only makes the problem worse.
We need a new paradigm of wealth distribution.
Whether it’s pilot error or not (I think not, but it doesn’t matter), the comment nesting problem I’m experiencing happens only when I reply to the last comment on a page.
However, I think you need a little less Malthus in your diet, and a little more Marx.
I think both (Malthus and Marx) made valuable contributions. I don’t think either works as a base-text upon which to build an economy.
any sourcing to back this up?
I’m not doubting that it’s an interpretation of events, but would like to read more about it.
Seems to work fine. But for comments to nest properly one has to hit “Reply” under the comment one wants to reply to.
The specific motivation for this rant was the 16-Aug-2011 On Point, “Jobless in America“. That piece, in turn, draws heavily on
commentary in The Atlantic by guest Don Peck such as “Can the Middle Class Be Saved.”
A lengthy but well-documented analysis of the “bathtub” that I describe is a 2010 piece by David Autor, of the MIT Department of Economics and National Bureau of Economic Research — “The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings“.
Sorry, my link to the David Autor link is wrong.
I intended: “The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings.”
The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings
The End of Loser Liberalism: Making Markets Progressive (PDF)
It describes how the economy is rigged to channel money upward, to wealthy people. I think this is the message that Democrats need to push, because the idea of “fair economic markets” fits into the American Narrative much better than “tax the rich and give money to the poor”.
Otherwise I see even louder objections than we already have about wealth distribution, and frankly it seems that the complaints about certain people mooching off the government/those who earn it will be more valid. Democracy only functions with a broad and viable middle class. Too much power in the hands of the rich leads to oligarchy, while too much power in the hands of the poor leads to communism.
The evidence is all around us that our reliance on “jobs” and “labor” has destroyed our middle class. How many fresh college graduates are beginning their professional career without crushing student debt? How long does it take a typical college graduate to become part of the “broad and viable middle class” when forced to pay service costs on a long-term six-figure student debt?
Our challenge, right now, is how to recreate and resurrect our “broad and viable middle class” — at the moment, it is flat-lined.
We are a long, long way away from putting “too much power in the hands of the poor”. It seems to me that history teaches that, in fact, it is taking away too much power/wealth from the hands of the poor that leads to communism.
I think there is little evidence that this leads to “communism” anyway. Most of Europe lives under various permutations of democratic socialism. Even the “capitalist” system of Eisenhower’s America would appear “socialist” or “communist” to today’s GOP.
I think we need to reject the premise that receiving government subsidies is somehow bad, immoral, sinful, selfish, or whatever. Your use of the word “mooch” is an excellent example. Nobody “mooches” off the government when they receive a government-funded college education.
I think it’s time to start pushing back against such phrases as “mooching off the government” — unless, of course, we want to apply them to corporate executives of Halliburton, Bechtel, Boeing, Lockheed, and so on who have been getting wealthy on government funds for generations.
…I WOULD like us to be more of a Social-Democratic welfare state than we are now, but I don’t see a system where most people are receiving and only a relative few making up the entire tax base as being sustainable for a whole host of reasons. I believe in targeted assistance such as student or business loans, and public services such as health, education, and utilities. I thought you were making it sound like a whole class of people would have as their sole income a government handout check, which I don’t see as feasible or fair.
How about we bake the wealth redistribution into the cost of our products, the way it has always been? Because what has happened is that US-based companies have figured out how to drop their labor costs by 50%, drop their prices by 25%, and pocket the difference in payments to their executives, top-skilled workers, and sharholders. This is what is causing the rapid escalation of wealth inequality (and lower taxes have made this a more attractive path too).
I’m talking about bringing more manufacturing to the US. Yes, a DVD player may cost $200 instead of $50. But a bunch of people in the US will be working instead of a bunch of people in China.
Couple that with what I mentioned below – impediments to large corporate trusts that, in the name of efficiency, eliminate jobs via economies of scale, and I think the economy would become a lot better place.
Wouldn’t this idea be palatable to just about everyone, including the Tea Party, all except the more hard-core free-trading neoliberists among them?
Nations have tried to impose controls like this, never with much success.
If a US DVD player costs $200 and a Canadian, English, German, Chinese, Japanese, etc., equivalent can be bought for $50, most folks will figure out how to import the cheaper one.
Meanwhile, funny you should mention DVD players. That market is falling apart as consumers realize that it’s MUCH cheaper to download the material directly and skip moving and spinning fragile pieces of plastic.
This is reinforces my point: when bits can be moved WITHOUT LABOR, no government policy is going to create “jobs” to create hardware to move bits. This pertains to ENORMOUS segments of our economy. It isn’t just hardware, either. Services, formerly performed by humans, that have routine and repetitive components to them are being replaced by automated counterparts.
A new paradigm is required. It really is.
Tariffs should be used to prevent corporations from shifting their production to other countries to take advantage of things like slave labor, no environmental laws, currency manipulation, etc. Some people might figure out how to get around such laws, but Wal-Mart or any other importer that matters wouldn’t be able to. It may not be impossible to buy a Cuban cigar in the US, but they sure aren’t being consumed by a lot of people, are they?
DVDs were perhaps a poor example – look at a 3-foot radius from wherever you are sitting and figure out the percentage of items made in the USA. From where I’m sitting, I think the only thing is a Dixie Cup, which I think was made in Darlington, South Carolina..
I remember, not so long ago, my friend’s brother used to work for the Sweetheart Cup Company in Chicago. Ooops. It was acquired by Solo in 2004 — ridding the company of “inefficient” labor such as duplicate accountants, lawyers, clerks, sales, marketing, and whatever. And oops, “Solo Cup Company closed its longstanding facility in Highland Park, Illinois in December 2009 and relocated to Lake Forest”. And oops, “Solo Cup Company will close its Owings Mills, Md., North Andover, Mass., and Springfield, Mo. manufacturing facilities. ” It seems they have not yet moved to China (though they are making cups in Mexico), but for how much longer? Maybe those plant closings are a prelude?
Oh yeah, for some obligatory Koch-bashing, how about this:
I’ll note that the press release I read about Dixie was issued by the public relations department of Georgia Pacific. If Dixie was not a “wholly owned subsidiary of James River Inc, which is a subsidiary of Georgia Pacific”, I suppose that they’d probably have a PR department in Darlington SC, and Georgia Pacific would have their own.
Sure, I admit, the Solo closings could also be due to more automation, but if we didn’t have all these other factors — outsourcing, super-sizing, labor-bashing — happening at the same time, I think that US workers could adapt to automation. It’s just all hitting at once, and that is killing us.
The problem isn’t about whether or not “US workers [can] adapt to automation”.
The problem is that making paper cups will never again provide livable wages in the US. The combination of all the things you describe — automation, outsourcing, labor-bashing — happens because the free market rewards it.
Tariffs don’t work. They really don’t. They may stave off the inevitable for a little while, but the fundamentals don’t change. The jobs are gone.
That’s why we need a new paradigm. The wealth is still being created. The Koch family is making lots of money. They aren’t doing this because they are evil, they make money because our current economic system causes them to make money. If it weren’t the Koch family, it would be somebody else.
We are watching the “normal” operation of the economic system we have. While its results were welcome during the second half of the twentieth century, they are not welcome now (for nearly all Americans).
It is the economic system that is broken, not the workers, not the government, not the tariffs, not the unions.
…about laws requiring that CEOs be allowed to only make a certain factor more than their lowest paid employees?
Can you cite examples of tariffs not working?
It seems that the problems you’re describing are purely political, not economic. We could implement tariffs on unfair trade. We could stop anti-union behavior which would allow wages to rise. We could enforce anti-trust acts which would prevent mega-companies from forming (one only has to look at the package store industry in Massachusetts, where you can only own 3 licenses, to see how a law can shape a market). We just don’t because too many of our elected officials don’t want to do those things, and too many of our citizens respond to cleverly worded propaganda instead of fully understanding an issue and how things like this affect the big picture.
I say that we should try it. We did better before China joined the WTO, though anti-union and mega-corporations were in full force. I agree with you that the economic system is broken, I just disagree that a good solution is to accept the fact that a bathtub-shaped workforce can be made better via transfer payments. Having 20% of the workforce permanently unemployed – never employed – is not a good situation, no matter how many services we provide. We need to provide jobs for people who have low to moderate skill, and we need to provide them at wages that allow people to live a respectable life.
It has proven to be true that “only manufacturing” jobs would go overseas, and that we could all cope by going to college. I do not think that it will continue to be true that more and more higher jobs will go overseas, because it makes a lot of sense to replace someone making $100k with someone making $20k than it does to replace someone making $20k with someone making $1k. It is already happening in many industries – design jobs that were thought to be untouchable are now moving to where the manufacturing is taking place. Pretty soon we will all be barbers giving each other haircuts, and that doesn’t make for an economy.
I think this sort of thing could work if done right. The Repuglican alternative is something like “We can bring back jobs by eliminating safety regulations, consumer protection, unions, and the minimum wage.” In other words, make the U.S. into some kind of Third World Banana Republic.I’d prefer experimenting with harsh tax penalties and or tarriffs for American companies that export more jobs than they create here. Meanwhile, even if we are doomed to become a country of burger-flippers and CEO’s (with a sprinkling of programmers and lawyers), I agree with Tom that we should make sure burger-flippers can afford something like a dignified life.
What type of plan do you propose that would be acceptable to the majority of Americans? Remember, 9% unemployment means 91% of the country is employed (I realize there are more than the 9% but yo get my drift).
Also, regarding more college grads being needed… how many people graduate every year over the last few years that have no job opportunities? If anything, I think we have too many college grads who go deep in debt so they can have the “college experience” AKA drinking, partying… and the only thing to show for it is debt or a big chunk of their parent’s retirement being spent. We could refocus dome of those students into the markets where we need people but that would saturate quickly.
Have you ever worked with a coop or commune? It can be mind numbingly democratic. If you’re thinking of the socialist dictatorship of the USSR (which had the exact opposite problem of too much power in the hands of the poor), you’ve got an issue with socialist dictatorships, not communism.
(and no the pun was not intended)
Your small-scale examples can work well, and even could include monasteries/convents. I also appreciate the theory behind, “From each according to his ability; from each according to his need.” Capital-C communism invariably comes with a healthy dose of political and economic dictatorship as the state owns all means of production leaving no room whatsoever for private enterprise, which IMO goes too far in the other direction, and like the free-market anarchy that some call capitalism has been shown to have major shortcomings.
These job losses aren’t just about automating things. I would argue that a lot of them are due to mergers & acquisitions, whereby many small companies become one large company with a smaller need for things like accountants, lawyers, clerks, etc.
We have gotten to the point where the only good company is a super-sized company. We have gone from local to regional to national to global in nearly every industry. A small company can’t easily compete on the global stage.
I look around the Springfield area and I see many remnants of companies that were once locally owned, but now have been bought and hollowed out, turned into either distribution companies, or serve some specialized role. Milton Bradley was bought by Hasbro, management is in Rhode Island. Spalding was bought by both Russell and Callaway, all management is now centralized in California or Atlanta. Moore Drop Forge was bought by Danaher, management left ages ago and they closed the plant and moved the jobs to Mexico. The list goes on and on.
It doesn’t have to be this way. We could actually enforce the Sherman Anti-trust act. Sure, light bulbs might cost more if we dictate that no single company can hold more than a 30% market share, but it would spread the jobs and wealth around to have a lot more companies doing business and would probably spur more innovation due to more people looking for solutions to problems rather than just one set of corporate eyes.
How about we create tax code that creates incentives for small business and disincentives for huge businesses?
Jeremy Rifkin has a book on that. But I don’t think we’re actually there yet.
The fact is that there is plenty of work to be done out there–gajillions of dollars worth of infrastructure to be built and repaired. This work could provide decades of middle-class wages, but as a country, we are ideologically opposed to paying for that work. We are against government spending, against government intervention in the economy, against using taxes to pay for things that improve the common good, against paying a living wage, against health care for all.
The situation of the middle-class is not the result of natural economic conditions, and unemployment is not structural, they are the logical consequences of decisions that have increasingly disenfranchised us.
I like this sentence:
This is what needs to change. I agree that we need to invest in rebuilding our infrastructure, and that will provide at least some middle-class wages.
I agree that we need to support government spending, support government intervention in the economy, support using taxes to pay for things that improve the common good, pay a living wage, and provide health care for all.
I think we are closer to Rifkin’s “End of Labor” than you seem to, but I think we’re both on the same wavelength.
that are in place in so many companies. With all of the lay-offs, the work – which in most cases did not decline in kind – has been passed off to the remaining workers. They are pushed and pushed to produce, and the threat is always there that if you can’t meet the new standard, they will find someone who will. Because jobs are hard to come by, many will stay, no matter how stressful and unhealthful it is, because they know that there is nothing else out there. Existing companies have plenty of room to hire, they just aren’t because, well, they don’t have to and it’s the new cool in today’s environment to cut jobs than hire. The more millions and billions to be made the better, and that’s what America today is all about.
…to enact and enforce laws designed to keep workplaces safe and healthful, give or deny tax breaks based on job creation, and enact laws which once and for all protect the right of workers to organize.
It’s rather infuriating to watch how clueless our elected officials are, and how completely controlled they are by some unseen force. We need to clean house for the next three election cycles. That way we can be sure that the status quo is completely washed out of our government.
To our detriment it is overseas. IT training is going on overseas so that IBM can move jobs overseas. Alternative energy jobs for overseas employers. Even bus rides so that the overseas corporations can maximize their profits.
Politicians, at the behest of their corporate masters, are diligently working to wipe out our standard of living. To reduce us to little more than slave labor.
“On account of being a democracy and run by the people, we are the only nation in the world that has to keep a government four years, no matter what it does.” –Will Rogers