When the Democratic Party fell under the spell of the Clintons and the Democratic Leadership Council in the early 1990s, American politics ceased to have two opposing sides on free trade and most other major economic issues. We have two parties that quibble on the margins – Should we cut everyone's taxes all the time or just 98% of the country's taxes most of the time? – but no meaningful disagreements over the free market, go-where-labor-is-cheapest policies that have taken the opportunities for non-college educated Americans to earn a decent living overseas to China, Mexico, India, and elsewhere.
As is typical of American politics, we deluded ourselves into thinking that a painfully obvious outcome from NAFTA and other free trade policies – a large pool of people with less than a college degree either unemployed or working unskilled service industry jobs – would not happen. Those readers old enough to remember the Clinton campaign in 1992 will recall that education would make all young Americans hi-tech wizards (because that kind of work will never be done overseas!) and older laid-off workers would be retrained (in some vague and unspecified way) and made useful in the New Economy. Perhaps you recall the "Silver Bullet" speech from the TV show The West Wing, which was Clintonomics in a nutshell. Let the jobs go, we'll just focus on getting everyone up to speed for the newer, better jobs that await us.
The problem, of course, is that we can retrain people until the cows come home and it won't matter because the jobs aren't there. We keep adding more people to the game of musical chairs, and if the number of chairs doesn't increase it really doesn't matter how quick the players are. So when the White House announces the thousandth "job training initiative" of the last 20 years in response to the current levels of unemployment it is hard not to laugh. Retraining for what? The stated goal is to match the unemployed with the needs of the major companies behind the plans, including Gap and McDonald's. It's sad that people need to be retrained to reach the level of competence necessary to fold sweaters at Old Navy or supervise high schoolers at McDonald's. Anyone else wonder if the difficulty in filling those positions, if indeed there is any, has anything to do with the fact that an adult can't live off of the money they're paying? Can't quite "retrain" ourselves around that problem, can we.
If the government spent half as much time trying to create decent jobs as it has spent teaching the unemployed to run around in circles or master the skills necessary for $9/hr no-benefit jobs, we might actually find our way out of this mess at some point. But since the odds of that happening are so slim, I guess we'll just piss away another couple hundred million retraining people for jobs that aren't there.
The Man, The Myth says:
Ed, the unfortunate truth is that the government doesn't have the power to put together any decent jobs. Our country has been bought and sold to the status quo lobbyists who don't want and won't allow any significant changes. Airlines and car industries won't let the government invest in transportation (which would provide real long term jobs), banks and monsanto won't let the government put money into more sustainable & local fields of agriculture and business, military industrial complex and Zionist Lobby won't allow the government to quite wasting money on perpetual wars in places we don't belong.
All we can do is small things in our communities to break this hold.
eau says:
But… Hang on… Lower taxes, flexible workforce (ooh, I love that term. "Can you grab your ankles while I pound your ass? That's it. Wow, you're flexible!"), entrepreneurs unencumbered by government red tape, reducing government waste, breaking corrupt unions… I don't understand. Surely these things lead to Galtian Utopia?
Aslan Maskhadov says:
Do you hear that laughter? It's Karl Marx.
Nunya says:
The truth of the matter is that we have a labor force with absolutely no voice. We’ve been convinced by 30 years of free market ideology that unions are corrupt and horrible for the hard working person and that free trade is unquestionably the way forward. We bought the “better jobs are around the corner” and a lot of us trained for the latest high tech wave that lasted… well, about 10 years before someone realized that India had smart people too that could live really well on 25% of what they were paying some American, self-indulgent chump that only worked 60 hours per week.
But there is a solution – it’s time for the government to roll back working hours. If we set the maximum work week to 35 hours and required overtime pay for EVERYONE short of a C-Level executive, we would not only free the poor, scared idiot that put in 80 hours of work per week but free up a lot of those well-paying jobs that require college degrees. We might even see that most of them really don’t require anything besides a high school education and a little on-the-job training. Yes, on the job training like you read about in the fucking Archie and Jughead comics of the 1950s.
We’re the most productive we have ever been as a workforce but we haven’t seen wages improve in 30 years. Any decent society would have moved some of the advantages of this vast wealth among its citizens but we have managed to send all of it, along with any sense of actual job security, to a tiny number of super-predators at the very top. I hope there will be an awakening in the near future when everyone realizes that being angry is a justified emotion but the source of our troubles isn’t the government employee, or the union member, or the guy across the street with an Obama sticker on his car but rather, a corrupt government that has sold out the prosperity that this nation has built over many years.
When I watch the gleam in the young MBA’s eye when he finds an even cheaper country to export our jobs to or hear about the wonderful middle class in China that we’ll soon be able to exploit, I wonder if it has ever dawned on them that the only thing that really makes America work, especially for business, is that it’s stable and has the largest middle class of consumers on the planet. We’re not smarter or more motivated than anyone else but we had a large group with disposable income that made us an economic powerhouse. Now take a look at Latin America, it’s improving but you really don’t sell much of anything down there because they have no market.
We’re well on our way to becoming a third world nation. Once our tax revenues dry up, our infrastructure crumbles, and we can’t afford to pay for police and courts, there will be absolutely no reason for anyone to do business with the US. These short-sighted idiots sold us all down the river for a few extra bucks. What a pity.
Aslan Maskhadov says:
Oh the working class has a voice- but a large portion of it is actually arguing AGAINST its own interests.
ladiesbane says:
Every system works great in its infancy. Capitalism was super for my farmer forebears who sold their excess at the railhead, formed a co-op, and provided seed money (literally) to new competition…who would agree to work only with the co-op. What can we try next?
Aslan and eau voiced my emotional reactions perfectly, so all I can say is: how do we fix this? I would love to see a WPA sort of program, especially one that incorporates child care for working mothers, but this may be a naive dream. Not that I'm not willing to try it, despite that.
John says:
The truly hilarious part about it all is that, after we were told how we would all just get re-educated for those whiz-bang hi-tech jobs and how Americans would do all the service economy jobs that required college degrees, the Republicans immediately spent the next several decades trying to dismantle the education system piece by piece. To this day, folks like Boortz *still* go on and on and on about how "awful" public schools are (not in a "man, we should really try to, I dunno, fund them once in a while" sense, but in a "GUB'MINT IS EBIL" sense) and how teachers' unions are ruining everything.
His answer, of course, is the same as most Republicans: private school vouchers. Which means we're still collectively paying for education, just that now it goes into the pockets of privateers that overcharge by an asston. Talk about waste and graft.
Misterben says:
This is one of the best posts you've put together in a long time, and that's saying a lot. Well done.
Erin says:
What a country! I am so proud to be a 'Merican!
Wes says:
I'm a little confused about your assertion that the high-skill jobs just aren't there. It seems painfully obvious that yes, globalization opens economies up to greater competition, which also means labor competition. That means that just like companies that can't compete, workers who can't compete are going to be harmed. No disagreement there.
We can all visit sites like dice.com or peruse the FRED JOLTS data and see the multitude of jobs that are definitely available. We can also look at how low the unemployment rate is for certain demographics (software engineers with at least a bachelors). To me, that tells a sad story about the job prospects of people without sufficient market-demanded education and training, but it doesn't tell a story about a dearth of any jobs.
What am I missing?
anotherbozo says:
Misterben may be right. I keep getting impressed with these posts, which speak louder and clearer and more intelligently than any newspaper column I can think of, never mind anyone else's blog. In a sane world, Ed would be full-time at Harvard, appearing on MSNBC and wouldn't have time for this. But we're in no danger of sanity, alas. Or is it happily? I'm conflicted.
"…and if the number of chairs doesn't increase it really doesn't matter how quick the players are."
Still the gift for metaphors, too.
displaced Capitalist says:
Frankly I don't see how there can be any jobs anywhere in the world these days. There is no frontier anymore anywhere in the world. Apparently the last man to have no contact with civilization is dying along with the rain forest in Brazil. Our resources are drying up with no new resources being discovered. Our economy- whether socialist or capitalist- is based upon steady growth. Once the growth stops, there just won't be any prosperity — ANYWHERE. Our only hope now is to start colonizing space and then we can start up the growth industry again.
John says:
@wes: "It seems painfully obvious that yes, globalization opens economies up to greater competition, which also means labor competition. That means that just like companies that can't compete, workers who can't compete are going to be harmed."
That's the thing though. They can't compete. It's not a matter of "won't compete" or "not willing to compete". They literally *can't* compete. The fact is that not everyone is suited for a college education. Some are too far along in their lives and can't afford the tuition. Some don't have an environment conducive to learning (surrounded by inescapable ignorance). Some just plain aren't smart enough. And that's usually okay, as there used to be trade professions available for them to offer employment.
But with globalization, they now have to compete for those trade professions and manufacturing jobs with people that will work for literally pennies a day. They have to compete with third-world poverty in a race to the bottom. It is simply not possible to live to acceptable standards in this nation on the pay that people in outsourced countries will take. Even *if* you tried it, your home would be condemned in a heartbeat.
Entomologista says:
Speaking of crumbling infrastructure, Tennessee has taken libertarianism to it's logical extreme. Obion County does not support the fire department with tax dollars, because that would be communist. And since this family had failed to "subscribe" to the local fire department, the fire fighters watched as their house burned to the ground.
Andrew says:
Another commenter on a different website made the perfectly reasonable assumption that, this being an area of rural Tennessee experiencing both 25% unemployment and a plague of meth labs, the idea behind the subscription fee for Firefighting was because even a small additional tax increase was unthinkable (it would just be clawing back money paid to most of those homes in the first place), and would have the benefit of knocking off the meth labs from having to be saved from immolation; he also made the point that, for a lot of people in the area, that extra $75 would be most welcome for basic needs like food or rent/mortagage, and we shouldn't make the assumption that the Cranicks opted out of the fee as a middle finger to the government. In fact, they may not even be of the teabagging philosophy in the first place.
Of course, this doesn't really address the problem, which is that making a service like Firefighting subscription-based encourages exactly this sort of behavior, which is precisely what you don't want for services like firefighting (or health insurance, etc). Really, if you're getting to the point were you can defend eliminating disaster insurance schemes from poverty-stricken areas of the country, you're not talking about a first-world country any more.
Andrew says:
Of course, the solution there would be more Federal money to make up for State shortfalls, but with a Federal government held hostage to the philosophy that a marginal tax rate higher than 33% is socialism!!!, plus having to pay for extravagant "Conservative" war-on-terror initiatives, plus being unable to spend money on job-creating infrastructure projects, there really isn't going to be Federal money on hand for State shortfalls.
Which is, again, illustrative of the teabagger philosophy.
patrick says:
Its true, job training hasn't worked and probably won't work. But there is a strong case to be made that it didn't work because skill mismatch is not our problem:
http://www.nytimes.com/2010/09/27/opinion/27krugman.html
patrick says:
I probably should have said:
"that it won't work because" rather than didn't
On the other hand, declining wages and job conditions are a separate longer term issue.
truth=freedom says:
@wes: "We can all visit sites like dice.com or peruse the FRED JOLTS data and see the multitude of jobs that are definitely available. We can also look at how low the unemployment rate is for certain demographics (software engineers with at least a bachelors)."
You would be surprised at the mismatch between what employers want and what the unemployed have to offer. At my company (a moderately-sized semiconductor company that hires a *lot* of software engineers), we *will not* hire anyone with more than five years experience for any of the several jobs for which we're currently interviewing. We prefer that you have less than two years experience.
Are these jobs you *have* to have a college education to do? Not exactly. I have a colleague who has no degree, but of course he got his job because his then-boss (in the midst of the tech boom 15 years ago) knew he was smart and wanted to reward him. So, yeah, you have to be smart. And you have to work hard some of the time. He trained on the job, but we're sure as hell not going to do that for any new hires.
And, what's most delicious: we're trying (for, honestly, legitimate reasons) to grow an operation in India. It's easily twice as expensive as it should be on paper because Indian workers are in a situation where they'll make more money faster by moving on after a year to a new job. So they do. And we lose 4-6 months training them in the process. And until the apparent cost of a worker in India is equal to the known costs of a new worker in the US (or Europe, for that matter), we're not going to hire anyone in any of those places. Never mind that the real cost of the Indian worker is easily twice what it's purported to be.
The corporate capitalist model rests on the assumption that the capitalists are more or less instantly rewarded or punished for their choices. But the truth is that it takes years for bad decisions to show just how bad they are on the quarterly report. In the meantime, the guys making the decisions that will destroy the company are richly rewarded for their vision.
Nunya says:
@ Wes – Truth=freedom is correct. Many of the jobs you see on Dice, Indeed, etc. are simply replacing older, more experienced workers. The turnover and churn in the software industry is very high. The new model is to get rid of the people that once expected a decent living with those fresh out of college that can be openly exploited.
I see it every day. Let's fire a full time employee and bring him back as a contractor for half the pay and no benefits. Hmmm, India is starting to get expensive, lets open an office in China, or Ukraine, or Bangladesh.
Business without regulation or pressure from unions is a very destructive force. Three decades of pro-business policies have made us pooper, less secure, and begging for the crumbs from the master's table. In essence, we're a Capitalist's wet dream.
Zeb says:
One of the other problems is that during this recession, companies have realized that they can squeeze their employees for more and more work without increasing (and in some cases, while actively decreasing) wages and benefits accordingly, in large part because there is so little job mobility.
This may work in the short term, but how long until people start burning out? How much more can we squeeze our education system before we stop producing citizens and start producing cogs (if we aren't there already!)? What will a society of stressed, low-paid, under/overeducated people look like?
pinch says:
I'm not sure what this rant about NAFTA has to do with anything, but my understanding is that our economy suffered from opening trade with China, a country full of ambitious people and a horrifyingly oppressive protectionist government. China was supposed to be a market for American goods, kinda turned around on us a bit.
Free-trade with a state-run economy that has a huge human resource failed us.
Shane says:
Creative retooling in order to survive.
http://www.slatev.com/blog/kermit-under-pressure/
choada777 says:
I read a book on the called Fast Food Nation recently. There's a chapter in the book that covers legislation that was passed in the 90's to provide businesses with subsidies for providing on-the-job-training to their workers. McDonald's is one of the companies that receives these subsidies. Ironically, McDonald's tries to marginalize the human worker as much as possible. Everything in the restaurant is automated. The burger grills are button-controlled presses that are timed. So are the fryers and toasters. Employees have to learn little more than how to press a button, flip a switch, and respond accordingly to the tone being emitted. They'd have robots running the place if they could find a way to reliably do so. They've even taken the Govt. to court when their eligibility for these moneys are contested.
Tim H. says:
In fairness to the Clintons and the DLC, the alternative was worse for the Democratic Party. The GOP's long anti-union campaign wasn't so much about "Evil Unions" as destroying a political support for the opposition. The Democrats had a choice of whoring to Big Money, or marginalization. Some paleocons are noticing the downside, but not so far as admitting their party's policy was mistaken.
eau says:
@pinch – "WWWAAAHHHH!!! THOSE DIRTY COMMUNISTS ARE BREAKING MY CAPITALISM!!!!11!!!one!"
patrick says:
@Zeb:
The increases in average productivity measures aren't necessarily because employers are "squeez[ing] their employees". Because employers generally lay-off their least productive workers, the average productivity will increase during recessions even if employers aren't doing extra(or malicious) to motivate their workers.
Simple example. I have 3 employees, Larry, Curly and Moe. Larry produces 3 widgets per day. Curly produces 2 widgets per day and Moe produces 1 widget per day. My average productivity is (3+2+1)/3 = 2 widgets per day per worker. Let's say that when the recession starts,I lay off Moe, but do nothing else different. My average productivity is now (3+2)/2 = 2.5 widgets per day per worker. I got 25% increase in average productivity and I didn't even have to twist my workers' arms! But I'm only producing 5 widgets/day instead of the 6 I produced before. (Which is analogous to the decline in GDP that we see during a recession)
Generally, productivity measures work just like this. So almost all the increase in productivity is because of this lay-off effect, not because of anything nefarious.
On a much longer time-frame than this recession(the last 20-40 years), there is a stronger case to be made that some "squeezing" has been going on.
Fiddlin' Bill says:
Harkin, '92, was the turning point, you're absolutely right.