"What are we going to do about it?"
Economist Stephen Roach of Morgan Stanley looks at the quality of newly created jobs in the US: America’s Job-Quality Trap
An unprecedented hiring shortfall has crimped the economy’s income generating capacity as never before....While there has been some improvement on the hiring front in recent months, the quality of such job creation has been decidedly subpar.
...from the trough of the last recession in November 2001 through June 2004, private nonfarm payrolls have now risen a paltry 0.2%. This stands in sharp contrast to the nearly 7.5% increase recorded, on average, over the same 31-month interval of the six preceding recoveries.
[The detailed industry breakdown of the data shows,] ...The contribution of lower-end jobs (44%) was about 50% greater than that of higher-end jobs (29%). In my view, that qualifies as a decidedly low-quality improvement in the US labor market.An even more dramatic picture of the quality of recent job growth emerges from the survey of households. ... the count of nonfarm persons at work part time ...increased by 495,000 over the February to June 2004 interval. That amounts to an astonishing 97% of the cumulative increase of 509,000 in total nonagricultural employment
On ... basis [of the occupational breakdown data], it turns out that fully 81% of total job growth over the past year was concentrated in low-end occupations.
.. low-quality job creation poses a serious risk to sustained economic recovery. And, of course, in this political season, any legitimacy to perceptions of worker angst could easily become one of the biggest issues in the upcoming US presidential campaign.
The Economic Policy Institutes Job Watch data show that the unemployment rate, when calculated compareable to European numbers, is now at 9.6%.
Roach closes his piece with this question:
"What are we going to do about it?"
Posted by b on July 10, 2004 at 13:39 UTC | Permalink
Out of todays Financial Times The abstract world of US jobs data
If compiling economic data is more art than science, then US employment figures are abstract art so vague they invite contradictory interpretations.
Posted by: Bernhard | Jul 10 2004 17:12 utc | 2
So, what are we gonna do about it? Aside from holding the plant owners at gunpoint until they reinstate old workers and ongoingly hire new ones? I haven't a clue. In an ideal world corporations are government approved entitities. Their charters exist at the will of the people. I personally think we ought to start revoking corporate charters, but that's just me. My father had a medium-sized business as I grew up. He was a champion of his employees, took little salary. Living in today's world of rapacious corporate executives is a trip down Alice's rabbit hole for me.
Posted by: Kate_Storm | Jul 10 2004 17:19 utc | 3
Hey Kate, my Dad was like that too. I have a feeling not so long ago that it wasn't so rare -- it was considered the honorable way to do business. (Remember the guy with the textile factory in Mass?) My question would be--what has changed and how does it reflect the overal social values that have changed?
Regarding the employment statistics, it has so long been an issue of such finagling at this point I can only laugh.
Posted by: x | Jul 10 2004 17:27 utc | 4
I wonder if a WPA type administration, designed to domestically create jobs (and jobs of a certain kind) wouldn't help in this circumstance? Kerry seems to want to spend all kinds of money on new agencies like domestic surveillance as well as beefing up everything else--how about programs to create worthwhile jobs? I think for awhile there was a Small Business Dept (can't even remember what it's called) that is now defunct. They gave out certain grants to promote such... that could be modified and developed again.
Posted by: x | Jul 10 2004 17:31 utc | 5
I'm going to have to disagree with you on that Koreyel, I think the tide is starting to turn against the corp. world. Walmart is running into roadblocks, albeit small ones, in several different communities across the country. People are starting to push back against the big corporation and pull together to support the small family operations.
There are FINALLY organizations like Moveon that are able to pull large groups of people together to take on the political and corporate cancers that are spreading. This is through the power of the internet and word of mouth. They have used a corporate marketing tool (viral marketing) against its creators to unite people all across the country in common goals.
An avalanche starts with one pebble. We are now at the point of gathering masses. Avalanche of change to follow if the direction isn't lost.
Finally, this is OT, CBSNews.com on its front page had a link Faulty Intel and the Election, the mouseover text read: "Analysts Downplay Effect of War Intel Report on Nov. Reslutts"
Now my question is, are they making an editorial comment on
(a)politicians in general, calling them sluts.
(b)Is it just the republican politicians, thus the spelling - Reslutts.
(c)Or a simple typo. Not as fun.
In any case I've got a screenshot if anyone would like it.
Posted by: sukabi | Jul 10 2004 17:35 utc | 6
Corporations are in the saddle and ride mankind. It is all giddyup from here on out...
This is why John Edwards Two Americas populism is so important -- it might just wake up the working folk to how much the uber class is screwing them.
On the NewsHour, Mark Shields said that after three days of campaigning with John Edwards, John Kerry looked ten years younger.
For all their flaws, this ticket is the best thing to happen for the Democratic Party in a long time.
Posted by: ck | Jul 10 2004 17:36 utc | 7
The key solution is LONG TERM INVESTMENT.
Our very society depends on it, for our economic growth depends upon capital formation. Way back in 1936, Lord Keynes warned us, "When enterprise becomes a mere bubble on a whirlpool of speculation, the position is serious. For when the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done." As a nation we can't afford to let that happen.
The fact is that we need a whole new mindset for institutional investors, one in which speculation becomes a mere bubble on a whirlpool of investment.
We need to go "back to the future," to return to our traditional focus on stewardship and abandon the focus on salesmanship that has dominated our recent history.
Posted by: Cloned Poster | Jul 10 2004 18:18 utc | 8
Cloned -- re LONG TERM INVESTMENT
Excellent point. We have a stock market whose horizon is next quarter profits and every single company now functions on those terms. One can argue that the MCI bankruptcy, for example, is precisely because of that. I can see it at other very big blue chip corporations I have some idea about... longterm investment goes out the window because they are desperate to show the quarterly profits for Wall Street. Investments are poor, workers are let go, and the companies that are really forming the backbone of the society are trashing themselves and going down the tubes into possibly bankruptcy.
Posted by: x | Jul 10 2004 18:22 utc | 9
the saving rate in the US is at an all time low - some 2% of income. Current investment in the US is payed for by foreigners. In my view the this is a starting point. My recipe currently would be:
investment swings by (Tobin) capital flow taxes
Posted by: Bernhard | Jul 10 2004 18:52 utc | 10
and of course:
- cut back that perverse defense budget by AT LEAST by 50% and use this to cut the general budget deficit. All these super expensive technology shit is useless anyhow in any perceivable war (see Iraq).
Posted by: Bernhard | Jul 10 2004 18:55 utc | 11
Bernhard those are wonderful ideas.
I think Kerry is talking about education. That outrageous defense budget is something people are blind to even as communities rant and rail they can't afford to pay for schools, etc. When was the last time you ever heard of a local museum that could be wholly financed by taxes? In San Francisco, working class families can't really even afford to take their kids to the museums at the prices being charged. They have one free day a month and they're packed. But kids are missing out on a heritage that belongs to everyone and is being reserved for those who can afford it. It is appalling.
Way back when, in the age of the benign magnates, New York City museums were endowed with the provision that those who can't afford admission only have to pay what they can, or even nothing. Everybody gets in. What's wrong with that model?
Posted by: x | Jul 10 2004 19:01 utc | 12
Bernhard, if you were a Presidential Candidate for the 2004 election, I'd suggest you shouldn't drive near any grassy knolls.
Of course this is the solution but the USA is now the land of the Greedy few.
Posted by: Cloned Poster | Jul 10 2004 19:03 utc | 13
Just a thought re "short-termism".
Essentially politics is the same.
I could well imagine Tony Blair (THE FUCKING LIAR) saying this at the start of every cabinet meeting.
How are we doing in the polls this morning, what spin do we need to make it go in our direction?
Posted by: Cloned Poster | Jul 10 2004 19:31 utc | 14
Excellent point, Cloned Poster.
And their (the politicians') horizon is even shorter than the quarterly report!
Posted by: x | Jul 10 2004 19:33 utc | 15
@x
Atrios has a Tony Blair thread running. Go read.
Posted by: Cloned Poster | Jul 10 2004 19:56 utc | 16
Thank you Cloned Poster, for the heads up. Will take a look.
Posted by: x | Jul 10 2004 20:13 utc | 17
Bernhard:
...disincourage the consumer to get into debt (increase fed rate)
I remember during the last recession (1991 or so) a tv commercial that got wide play in my neck of the woods at the time (Silicon Valley).
It was quite simple. Just patriotic music and the words: "Buy something" emblazoned repeatedly across the screen.
No I am not joking.
I saw that commercial many times.
Buy Something!
Quite frankly I think my incipient cynicism leaped straight to middle age on viewing those ads.
Bradbury and Vonnegut and Vance Packard and Huxley were all right. Endless and thoughtless consumption really was the future present tense of America.
Allow me to enforce these dire ideas with two sentences from the linked article:
In response to the income shortfall, overly-extended consumers can be expected to go further out on the risk curve in order to defend their lifestyles. The Fed, for its part, will be more wary of normalizing monetary policy if that means higher interest rates will threaten the asset-driven dynamic to US consumption.
Bernhard read those sentences against your noble suggestion. Yes I agree it would be nice to stop the treadmill of personal debt. But it isn't going to happen.
This is extremely powerful mojo.
Exteremely.
Essentially the author is saying what I have said on many other threads. To wit: Americans will likely do whatever is required to defend their lifestyles against downsizing, and the Fed will aid in that defense.
If true, this has deep reprecussions.
Some have even aruged that it explains why America is in Iraq.
Posted by: koreyel | Jul 10 2004 22:40 utc | 18
I've thought for years that the "corporation as profit-seeking automaton" game theory eventually has to run up against a degenerate state, i.e. the end-game.
If the name of the game is to employ as few people as possible, paying as low a wage as possible, while charging as high a price as possible and/or producing as much merchandise as possible, then if we follow these guidelines to their logical conclusion we eventually have fully-automated factories that produce a cornucopia of goods while employing almost no one. Since almost no one is employed, almost no one can afford to buy the goods. In that case, with the market shrinking due to unemployment and reduced discretionary spending, why are we making so much merchandise? We would then have surplus, waste and losses. iirc Bill Greider explores this path through the game in One World Ready Or Not.
The whole theory has always sounded to me a bit like one of those patents the USPO is always receiving for Perpetual Motion Machines -- rather literally robbing Peter to pay Paul. As far as I can tell the whole Rube Goldberg device only lurches onwards due to dirt-cheap energy; and that era is, I suspect, almost over.
Anyone else read (or reading) Parecon? Anyone else read (or reading) For the Common Good? interested in a thread on sustainable economies?
koreyel
wise words as usual.
However, Russia, Germany and France not involved in this business plan.
Posted by: Cloned Poster | Jul 10 2004 22:46 utc | 20
DeAnander- I would be interested in a thread on sustainable economics. As I mentioned on an earlier thread, I've been reading Radical Simplicity.
Bernhard- have you ever read The Divine Right of Capital? Just wonder what you thought, if so.
I'd also add to your suggestions for this country that bizzes over a certain size must pay a living wage, and that the minimum wage must be raised (I don't know how familiar you are with that issue in the US, but it's one of the biggest scandals about this society.)
Also, govt regs to enforce these "rules of the game" to keep things from getting rigged, with oversight from owners, workers and (unrelated to owner) stockholder groups.
Included in this, since they won't do it because they're fucking pigs, CEO to lowest wage worker ratio should be more like those in other industrialized nations, rather than what it is now, which is a model of feudalism.
A SIMPLE tax code that doesn't have pages and pages of "special" exemptions.
A "sin" tax on big vehicles that use lots of fuel.
Govt support for bizzes that do R&D and implementation of alternative energy. NO MORE subsidy for oil, phased out over a few years.
totally repudiate "Stars Wars" for the piece of pork bullshit that it is.
...and just wondering...why do we have defense contractors? why aren't weapons made by the nation that uses them?
anyway, I would say that EVERY YEAR the govt should have to list the salary of defense contractors, these companies have to allow an independent audit of their bizzes and a expenditures and these should be published in newspapers.
issues of health care and pharmaceutical industry profits should get in here too, of course.
no company that gets any bennies from the govt, and that is run by American citizens should be allowed to exist "offshore." If so, the people running the company should be forced to choose b/t their citizenship (and voting rights) or their corporate profits.
...we'd probably lose a few citizens that way, but our loss would be the Caymen Island's gain.
Posted by: fauxreal | Jul 11 2004 1:02 utc | 21
ck: This is why John Edwards Two Americas populism is so important -- it might just wake up the working folk to how much the uber class is screwing them.
And why do you think John Edwards the politician is somehow immune from what infects the rest of the professional politicians? This, "wow, he looks great, he talks a good line" method of evaluating candidates escapes me. John Edwards likes being a freshman senator. He likes being selected as a running mate for John Kerry. What will he say to make that all happen, and what will he not say. People's gullibility about what politicians "say" is a constant source of entertainment to me. Sorry this is no snarky. I'm pretty pissed off about the failure of people to see the lay of the land. Not to be confused with Kenny Boy Lay.
Posted by: Kate_Storm | Jul 11 2004 2:03 utc | 22
I gotta add: Edwards gung-ho approach to Iraq and to Sharon are a big problem for me. A great big wacko problem for me. As far as I can tell, it's just that damn old neocon territory.
Like I've send endlessly, I'll support the jerks I don't know over the criminal lunatics I already know. But seriously - esp. with Edwards - on things I really care about, what is the difference? He's AIPAC's candidate. I keep telling myself, "Well, he's only the Veep." But isn't that kind of self-delusional?
Posted by: x | Jul 11 2004 2:11 utc | 24
I vote for a long-running "sustainable economics" thread, where interested parties can bring their favourite URLs and book recommendations. Critique of Chicago-school neolib economics (the currently dominant dogma) is a long-time interest of mine and I would love to compare notes with others whose brains are pointing that direction.
O Landlord, may we please have a Economics snuggery for the purpose? It is one way to get closer to some idea of "What are we going to do about it," that is, some idea other than armed revolt and all that loud and messy stuff.
Kate, there really is a Santa Clause. ;)
Your absolutely right, the system is a huge fucking sham. Now what do we do?
I am definitely interested in a sustainable economic... how bout page? Doable? I think a lot of research is in order, I imagine there is a lot of stuff out there if we just Googled for it.
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Posted by: Stoy | Jul 11 2004 6:40 utc | 26
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Posted by: Stoy | Jul 11 2004 6:49 utc | 27
I apologize, that should have gone in the "Not Sealed..."
thread, apart from it being just plain stupid.
Posted by: Stoy | Jul 11 2004 6:52 utc | 28
The comments to this entry are closed.
Fascinating article Bernhard.
What are Americans going to do about it?
The answer lies between 'very little' and 'nothing.'
America would have to completely rethink its relationship with corporations. I do not see that happening.
Thoreau wrote: "Things are in the saddle and ride mankind."
Today we might amend it to read: "Corporations (and the things corporations make) are in the saddle and ride mankind."
Which is all to say that here in America: Corporations exist solely to make a profit. They do not exist to make a profit AND employ people. The ideal American corporation is one that employs no one and makes beaucoup dollars.
To do something about that... we would have to seriously question and recast our entire philsophy.
We are not an introspective people. The debate about putting people first and corporations second will never even take place.
Thus the chances of hobbling corporations--redefining them--is virtually nil.
[Aside: Saw Moore's first film the other day: Roger and Me (1989). You know what it is about: Eleven plants closing in Flint and GM opening new ones in Mexico. What astounded me about the films was the passivity of the workforce and government representatives. They went into that good night with nary a kick. See my point? Corporations are in the saddle and ride mankind. It is all giddyup from here on out...]
Posted by: koreyel | Jul 10 2004 15:42 utc | 1