The Devastating Transformation of Work in the US

Quote: “Corporate profits and income inequality have grown in large part because US firms have successfully taken advantage of the weak state of unions and labor organizing … to transform work relations. Increasingly, workers, regardless of their educational level, find themselves forced to take jobs with few if any benefits and no long-term or ongoing relationship with their employer.”

Reports from the Economic Front

Two of the best-known labor economists in the US,  Lawrence F. Katz and Alan B. Krueger, recently published a study of the rise of so-called alternative work arrangements.

Here is what they found:

The percentage of workers engaged in alternative work arrangements – defined as temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers – rose from 10.1 percent [of all employed workers] in February 2005 to 15.8 percent in late 2015.

That is a huge jump, especially since the percentage of workers with alternative work arrangements barely budged over the period February 1995 to February 2005; it was only 9.3 in 1995.

But their most startling finding is the following:

A striking implication of these estimates is that all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements. Total employment according to the…

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We Are Stronger Together, But Let’s Get to Work!

You’ve probably heard variations on a well-known slogan this year. Two I’ve heard are “Make America White Again” and “Make America Great for White People Again”.

It’s unlikely, however, that you’ve heard variations on Hillary Clinton’s slogan or even know what her slogan is. She never wears a silly hat that has it plastered on the front.

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Yes, that’s it: “Stronger Together”.

I agree with the sentiment, of course, since we are stronger as a nation when we work together. But “Stronger Together” hasn’t caught on, certainly not as much as “Make America As Great As It Was For White Men In 1955”.

In fact, there were at least two articles this week that said Hillary needs a better slogan, something that would express an overarching theme, something you could put on a t-shirt or a stupid hat. The Guardian actually called their editorial “Hillary Needs a Slogan to Sum Up What She Stands For”:

Mrs. Clinton seems to have a hundred carefully costed policies but not one eye-catching slogan. She radiates a sensible incrementalism. She campaigns in prose, leaving poetry to her predecessor. This is a mistake. She needs to focus on what is driving discontent in America: an economic system that no longer defuses high levels of inequality with opportunities for all….Mrs. Clinton needs to find a resonant theme to sum up her policies: a Marshall Plan for the middle classes would not be a bad idea. Monday is her chance to show she is motivated by the common good. Mrs. Clinton should seize it.

I’m not sure many Americans could identify the Marshall Plan today, but you get their drift. A columnist for Bloomberg View contributed “Clinton Needs a Better Slogan” the very same day:

The Democratic nominee does have 40 bullet-point programs on everything from child care to mental health to the Middle East. But she has no memorable rallying cry to capture her candidacy and rationale to be president.

To test that, simply ask a bunch of Clinton supporters to summarize in a sentence or two what her candidacy is about. You usually get multiple paragraphs in response.

This is more a political than a substantive issue. Slogans are no substitute for governing policies….Still, a catchphrase can be a powerful and moving expression of a candidate’s authentic ambitions.

Yes, a simple catchphrase could finally help undecided voters make up their minds between two candidates as different as Hillary and Voldemort.

So I got to thinking. What might be better than “Stronger Together”?

First, it occurred to me that Hillary has said her primary goal as President will be to get the economy working for all of us, partly by improving the labor market in a number of ways.

Second, Hillary is known as a hard worker. Even Republican politicians agree that she has a remarkably strong work ethic. Indeed, people often suggest she works too hard and needs to lighten up (all those position papers, for example).

So I came up with this:

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I like “Let’s Get To Work” for several reasons.

It summarizes Hillary’s primary goal as President, an improved economy for all of us, not just those at the economic top.

It reminds people that she’s a hard worker who has lots of ideas and the energy and temperament to get things done, even to get things done with the Republicans in Congress, as she did when she was First Lady and a Senator.

It brings to mind the backlog of work to be done in Washington, all the projects and initiatives that have gone nowhere because of Republican opposition (increased infrastructure spending, a higher minimum wage, immigration reform, criminal justice reform, etc. etc.).

For older voters, it might even evoke memories of Franklin Roosevelt’s New Deal or, more recently, the growing economy we enjoyed during Bill Clinton’s administration. And there could hardly be a more welcome promise to the unemployed and underemployed than “Let’s Get To Work”.

I believe it’s positive, inclusive and relatively specific. Plus, it sounds less like a reaction to her opponent’s campaign of bigotry and exclusion than “Stronger Together”.

Since we’re living in the era of electronic sharing, I submitted my proposed slogan to Hillary and her campaign and also sent it soaring into the Twitter-verse. I’ve also shared it with a few live human beings of my acquaintance.

Of course, I know it’s late to fully adopt a new slogan, and so far all I’ve got back from the Clinton campaign is a form letter thanking me and encouraging me to volunteer.

But hope springs eternal! Perhaps, when Hillary offers her closing remarks on Monday night before an audience of 100 million or so people (minus me), she’ll wind up her two or three minutes with a ringing call to action: 

Let’s get to work!

Hey, maybe she’ll even cite a guy from New Jersey as the source of this new, exciting summation of her candidacy. Stranger things have happened!

And if you doubt me, consider this editorial in The New York Times from tomorrow’s paper: “Hillary Clinton for President: Our endorsement is rooted in respect for her intellect, experience and courage”. The whole thing is worth reading, but here’s the last paragraph:

Through war and recession, Americans born since 9/11 have had to grow up fast, and they deserve a grown-up president. A lifetime’s commitment to solving problems in the real world qualifies Hillary Clinton for this job, and the country should put her to work.

You can thank me after the election.

Organizing for the Future

A review at the London Review of Books caught my eye because the two books discussed both have the word “Postcapitalism” in their titles. Who doesn’t want to know what’s coming next?

The review didn’t convince me that anyone knows. Two possibilities are mentioned: Full Automation and Universal Basic Income. Presumably, “Full Automation” refers to automating as much as possible. More robots and smarter software should lead to fewer people having jobs. That might lead to everyone being guaranteed a basic income. Or it could lead to mass sterilization, with only lottery winners and good-looking people being allowed to reproduce.

What I found more interesting were some remarks about “austerity”, the recently popular attempt to stimulate world economies by reducing government spending:

In both books, the critical fronts are a total opposition to austerity and neoliberalism, and a focus on the possible consequences of increased automation, including the creation of a ‘surplus population’. The ‘real austerity project’, Mason argues, is ‘to drive down wages and living standards in the West for decades, until they meet those of the middle class in China and India on the way up’. As a result, ‘the next generation will be poorer than this one; the old economic model is broken and cannot revive growth.’ Those places which, in their different ways, have managed to insulate themselves – authoritarian China, Russia or Iran, residually social democratic northern Europe – will not be exempt: ‘By 2060, countries such as Sweden will have the levels of inequality currently seen in the USA.’

Further down in the article, there’s some practical discussion:

What the historical labour movement did, in Srnicek and Williams’s eyes, was set itself goals and demands – for pensions, social security, fewer working hours – and fight for them inside and outside the workplace. What they are really proposing … is that a new set of demands be agreed and doggedly insisted on, in the manner of the old left.

But how could enough of us agree and doggedly insist on a new set of demands? Maybe the authors of the books being reviewed have an answer, but the only way I can see that happening is through the creation of a mass movement like the labor movement of the 19th and 20th centuries. 

In his very good book The Age of Acquisition: The Life and Death of American Resistance to Organized Wealth and Power, Steve Fraser describes how organized labor contributed to the general welfare after the New Deal and World War 2:

…the labor movement of those years of uproar created – more than any other institution, public or private – a standard of living envied everywhere. In 1945, 40 percent of American families lived below the poverty line… By 1970, only 10 percent lived in poverty… Not only did the economy grow at an annual average of 4 percent during the postwar era, but that growth favored the poor more than the wealthy…it was the organized labor movement that compelled broad sectors of American industry still unwilling to engage in the new mechanisms of collective bargaining to nonetheless match the standards of living (wages, hours, vacations, holidays, pensions, health care and more) that unions were winning for their members….

An “American standard of living” and the forms of industrial democracy that made it possible … shattered the old order [196].

Perhaps globalization means that a race to the economic middle (or even the bottom) cannot be stopped. But it was organized labor and other progressive organizations that demanded and achieved progress in the past. I think it will have to be organized human beings, whether or not they have traditional jobs, who demand and achieve progress in the future.

Who’s On First? Private Property or Competition?

David Brin trained as a scientist, has written science fiction and consults with the government and corporations regarding what will happen next. He’s not an economist, but he’s written an interesting little article about right-wing ideology. It’s called “Stop Using Adam Smith and Friedrich Hayek to Support Your Political Ideology: The Irony of Faith in Blind Markets”. 

Brin cites John Robb, an author, “military analyst” and entrepreneur, as a big influence on his thinking. Robb isn’t an economist either, but here are a couple of paragraphs from his blog

The only way to manage an economy as complex as [ours] is to allow massively parallel decision making.  A huge number of economically empowered people making small decisions, that in aggregate, are able to process more data, get better data (by being closer to the problem), and apply more brainpower to weighing alternatives than any centralized decision making group.

In other words, central planning cannot cope with the economies of developed nations in the modern world. We need the Invisible Hand of the market. Yet: 

…an extreme concentration of wealth at the center of our market economy has led to a form of central planning.   The concentration of wealth is now in so few hands and is so extreme in degree, that the combined liquid financial power of all of those not in this small group is inconsequential to determining the direction of the economy.  As a result, we now have the equivalent of centralized planning in global marketplaces.  A few thousand extremely wealthy people making decisions on the allocation of our collective wealth.  The result was inevitable:  gross misallocation [of resources] across all facets of the private economy. 

Getting back to Brin, he argues that:

….across 4,000 years we’ve seen that whenever a small group of men become powerful enough to control an economy and command-allocate its resources, they will do so according to biased perceptions, in-group delusions and fatally limited knowledge. Whether they do the normal oligarchic thing—cheating for self-interest—or else sincerely try to “allocate for the good of all,” they will generally do it badly.

So what’s the solution? Brin says it’s competition: “the most creative force in the universe”: 

By dividing and separating power and—more importantly—empowering the majority with education, health, rights and knowledge, we enabled vast numbers of people to participate in markets, democracy and science. This has had twin effects, never seen in earlier cultures.

  1. It means everybody can find out when a person stumbles onto something cool, better or right, even if that person came from a poor background.
  2. It allows us to hold each other accountable for things that are wrong, worse or uncool, even when the bad idea comes at us from someone mighty.

…cutting through countless foolish notions that held sway for millennia—like the assumption that your potential is predetermined by who your father was—while unleashing creativity, knowledge, freedom, and positive-sum wealth to a degree that surpassed all other societies, combined.

Even the most worrisome outcomes of success, like overpopulation, wealth stratification and environmental degradation, come accompanied by good news— the fact that so many of us are aware, involved, reciprocally critical, and eager to innovate better ways.

Some have argued that cooperation has contributed just as much to human progress as competition has, but putting that issue aside, Brin arrives at his major point: the people who call themselves “conservatives” and claim to revere thinkers like Adam Smith and Friedrich Hayek, both of whom extolled the benefits of a competitive market, don’t really believe in competition:

The problem is that it’s all lip service on the right! Those who most loudly proclaim Faith In Blind Markets … are generally also those proclaiming idolatry of private property as a pure, platonic essence, a tenet to be clutched with religious tenacity, as it was in feudal societies. Obdurate, they refuse to see that they are conflating two very different things.

Private property—as Adam Smith made clear—is a means for encouraging the thing he really wanted: fair and open competition….But anyone who actually reads Adam Smith also knows that he went on and on about that “fair and open” part! Especially how excessive disparities of wealth and income destroy competition…. When today’s libertarians praise the creative power of competition, then ignore the unlimited [worship of property] that poisoned it across the ages, we are witnessing historical myopia and dogmatic illogic, of staggering magnitude….

But in rejecting one set of knowledge-limited meddlers—100,000 civil servants—libertarians and conservatives seem bent on ignoring market manipulation by 5,000 or so aristocratic golf buddies, who appoint each other to company boards in order to vote each other titanic “compensation packages” while trading insider information and conspiring together to eliminate competition. Lords who are not subject to inherent limits, like each bureaucrat must face, or rules of disclosure or accountability. Lords who (whether it is legal or not) collude and share the same delusions….

Hence, at last, the supreme irony.  Those who claim most-fervent dedication to the guiding principle of our Enlightenment: competition, reciprocal accountability and enterprise—our neighbors who call themselves conservative or libertarian—have been talked into conflating that principle with something entirely different. Idolatry of private wealth, sacred and limitless. A dogmatic-religious devotion that reaches its culmination in the hypnotic cantos of Ayn Rand. Or in the Norquist pledge to cut taxes on the rich under all circumstances—during war or peace, in fat years or lean—without limit and despite the failure of any Supply Side predictions ever, ever, ever coming true.

An idolatry that leads, inevitably to the ruination of all competition and restoration of the traditional human social order that ruled our ancestors going back to cuneiform tablets — Feudalism

As Paul Krugman has often pointed out, it’s not the 1% that’s the problem. It’s more like the 0.001% (Brin’s “golf buddies” and their ilk around the world) whose vast wealth makes them modern-day aristocrats. It’s also those who Krugman called “enablers” in today’s column – the minions who spread the “private property is sacred” and “government destroys liberty” gospel. If these so-called “conservatives” were true to the spirit of Adam Smith, they’d celebrate “mass education, civil rights, child nutrition and national infrastructure etc.”, which Brin mentions, as well as antitrust enforcement, workers’ rights and environmental protection, all of which have “empowered greater numbers of citizens to join the fair and open process of Smithian competition”.

PS – Brin’s article is on a site called Evonomics: The Next Revolution in Economics. It’s worth visiting.

Clinton and Krugman on Trump and Workers

As you might expect, Hillary Clinton’s campaign site has a lot of policy proposals. By my count, the “Issues” page has thirty-two topics you can click on to see what she wants to do as President. (Oddly, the only issues listed are domestic. There’s no page for foreign policy.)

Among the issues are “Fixing America’s Infrastructure”, “Labor and Workers’ Rights” and “Workforce Skills and Job Training”, but the one that I was especially interested in was “Manufacturing”. If you click on it, you’ll see that Clinton offers some sensible suggestions to increase manufacturing jobs in this country. However, it’s highly unlikely America will ever be the manufacturing powerhouse it used to be. Yesterday’s column by Paul Krugman explains why and also explains why Trump is no friend of working people, despite his tough talk on trade:

There’s no question that rising imports, especially from China, have reduced the number of manufacturing jobs in America…. My own back-of-the-envelope calculation suggests that completely eliminating the U.S. trade deficit in manufactured goods would add about two million manufacturing jobs.

But America is a big place, and total employment exceeds 140 million. Shifting two million workers back into manufacturing would raise that sector’s share of employment back from around 10 percent to around 11.5 percent. To get some perspective: in 1979, on the eve of the great surge in inequality, manufacturing accounted for more than 20 percent of employment. In the 1960s it was more than 25 percent…Trumponomics wouldn’t come close to bringing the old days back.

No matter what we do on trade, America is going to be mainly a service economy for the foreseeable future. If we want to be a middle-class nation, we need policies that give service-sector workers the essentials of a middle-class life. This means guaranteed health insurance — Obamacare brought insurance to 20 million Americans, but Republicans want to repeal it and also take Medicare away from millions. It means the right of workers to organize and bargain for better wages — which all Republicans oppose. It means adequate support in retirement from Social Security — which Democrats want to expand, but Republicans want to cut and privatize.

….And it should go without saying that a populist agenda won’t be possible if we’re also pushing through a Trump-style tax plan, which would offer the top 1 percent huge tax cuts and add trillions to the national debt.

Sorry, but adding a bit of China-bashing to a fundamentally anti-labor agenda does no more to make you a friend of workers than eating a taco bowl does to make you a friend of Latinos.

Brief Political Commentary

Voters who attended the Democratic caucuses in Nevada yesterday were asked to identify the most important issue facing America. 34% said the economy and jobs; 7% said terrorism.

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Voters in the Republican primary in South Carolina were asked the same question. 28% said the economy and jobs, but 32% said terrorism.

SGOP_IssuesV2_02202016I haven’t been able to determine whether the Democrats and Republicans were given the same list of issues to choose from, but it’s still remarkable that one-third of Republican voters chose terrorism as the most important issue we face. In fact, it’s remarkable that 7% of the Democrats said the same thing.

Unless these people think there is a strong chance that terrorists (of whatever political persuasion, not just Islamic fundamentalists) will attack America with nuclear or biological weapons, it’s silly to put terrorism at the top of the list. (In fact, given how silly it is, I have to wonder – mostly facetiously – whether some of those Democrats were devious Republicans attending the Democratic caucuses in order to make trouble, something the rules in Nevada allowed).

Here in New Jersey, we don’t get to participate in the nomination process until June, when it won’t matter what we think or how we vote. But if anyone asked me, I’d put global warming first, because of its possibly catastrophic consequences. After that, it would be hard to choose between the economy and jobs; money in politics; and the number of Americans who have lost their minds and vote for Republicans.

A Few Reasons We’re Getting Screwed

It’s one thing to get screwed. It’s another thing to know why. From recent reading:

Instead of raising wages, hiring more workers or investing in research and new equipment, corporations are increasingly accumulating cash and buying their own stock. This raises the corporation’s stock price, enriching the people in charge (who receive much of their compensation in the form of stock and stock options) and shareholders (who tend to be the wealthiest among us), but does little to improve the lives of most Americans. Some statistics from The Atlantic‘s “Stock Buybacks Are Killing the American Economy”:

Over the past decade, the companies that make up the S&P 500 have spent an astounding 54 percent of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock.

Instead of doing something productive.

The Atlantic article is by Nick Hanauer, a very successful capitalist who acknowledges that inequality is a problem that needs to be addressed. A poorly-named article from Salon called “Let’s All Screw the 1 Percent” cites an article Hanauer wrote last year about overtime pay.

We all know that wages have stagnated for many workers or even declined when adjusted for inflation. In order to have the same buying power it had in 1968, the federal minimum wage would have to be raised from $7.25 to almost $11.00 (see this attempt at myth-busting from the Department of Labor). What isn’t as well-understood and what Hanauer pointed out is that millions of workers would and should be receiving overtime pay, even though they aren’t paid by the hour (declaring workers to be “exempt” and giving them a salary is, of course, a great way to force people to work long hours without extra compensation). From the Salon article by Paul Rosenberg:

…there’s a wage level below which everyone qualifies for mandatory time-and-a-half overtime, even if they’re on a salary, and that level has only been raised once since 1975, with the result that only 11 percent of salaried Americans are covered today, compared to over 65 percent of them in 1975. If you make less than $23,660 a year as a salaried worker, you qualify for mandatory overtime—if not, you’re out of luck.  … Just adjusting the wage level for inflation since 1975—an act of restoration, not revolution—would be as significant an income increase for millions of middle-class Americans as a $10.10 or even $15 minimum wage is for low-wage workers.  It would cover an additional 6.1 million salaried workers (by one account) up to $970 per week, about $50,440 annually—the vast majority of those it was originally designed to protect, but who have slowly lost their protections since the 1970s. Hanauer proposes a slightly greater increase, intended to cover roughly all the workforce that was covered in 1975. That would raise the threshold to $69,000 annually, and would cover an added 10.4 million workers.

What was also surprising to me is that the President can raise the $23,660 threshold without the approval of Congress. Last year, in fact, President Obama promised to do just that. This website for Human Resources specialists predicts that the threshold for overtime pay will be increased in 2016, but only to around $45,000 (they also predict that the rules for declaring an employee to be “exempt” will be tightened, making more workers eligible for overtime pay).

In a related article at the Alternet site, a postal worker explains why the people delivering your mail during the week or a package from Amazon on Sunday may not look as official as they used to (jeans and a sweatshirt seem to have replaced those blue uniforms in my neighborhood). Paul Barbot says that he is a City Carrier Assistant:

City Carrier Assistants are a brand new classification of employee within the postal ranks; we are the low-wage, non-career, complement workforce at the USPS. Before [a 2013] reclassification, we were called Transitional Employees and made a respectable $23.52 hourly rate, only several dollars per hour less than what the average career employee made. But with the USPS management’s financial woes … a low-wage workforce was needed to help entice big business into choosing the postal service to partner up with. City Carrier Assistants now perform the same work they did when they were called [“Transitional Employees”], but now they get to do that work for 31 percent less pay ($16.68 per hour)….Newly hired CCAs will make even less —starting at $15 per hour.

Barbot argues that this lower-wage workforce helped the Postal Service and Amazon reach a “Negotiated Service Agreement” regarding special treatment for Amazon packages. 

And finally, The Guardian reports (no surprise) that:

Poor Americans are less likely to vote and more likely to distrust government, study shows… Political engagement, it appears, is a privilege for those who aren’t struggling to make ends meet…

while the right-wing Koch brothers, who aren’t struggling at all (not even with their consciences), plan to spend almost $900 million in 2016 in support of reactionary candidates, almost twice what they spent in 2012.