On Tue, Jul 27, 2010 at 11:46 PM, Keith Hudson
<[email protected]> wrote:
> At 18:41 27/07/2010 -0700, Sandwichman wrote:
>
> July 27, 2010
> Shouldn't High Unemployment = Less Work To Do?
>
> -- by Dave Johnson
>
> Superb diagnosis but poor with its three main suggestions. See below:
>
> This post originally appeared at Campaign for America's Future (CAF)
> at their Blog for OurFuture. I am a Fellow with CAF.
>
> Simple question: have we reached a point where machines and computers
> leave us with less work to do? If so it can mean a lot of people are
> left without jobs and incomes, losing their homes and health, while
> the rest have our wages dragged ever downward. Or we can make some
> changes in who gets what for what, and every one of us ends up better
> off.
>
> Cake or death? Which will it be? (*explained below)
>
> Somewhere around one in five of us is un- or under-employed while at
> the same time so many of the rest of us, still employed are stressed,
> tired, doing the work of those laid off. With too few employed many
> stores, restaurants, hotels and many other businesses are falling
> behind. As Bob Herbert puts it today, "Simply stated, more and more
> families are facing utter economic devastation: completely out of
> money, with their jobs, savings and retirement funds gone, and nowhere
> to turn for the next dollar." The government has stepped in with
> stimulus to pick up some of the slack in demand but that can't go on
> forever and we need to find long-term solutions.
>
> Is it structural?
>
> There are signs that the jobs crisis may now be structural, or built
> into the system. This means that the usual solutions are not going to
> "restart the engine" and trigger a return to an economy that had where
> almost everyone can find a job, (even if it is a menial, boring
> time-suck).
>
> Our unemployment emergency may really be about less work to do. Hale
> "Bonddad" Stewart writing at 538.com, Labor Force Realignment and
> Jobless Recoveries concludes, (click through for gazillions of charts
> and full explanation)
>
> The "jobless recovery" is in fact a realignment of the US labor
> force. Fewer and fewer employees are needed to produce durable goods.
> As this situation has progressed, the durable goods workforce has
> decreased as well. This does not mean the US manufacturing base is in
> decline. If this were the case, we would see a drop in both
> manufacturing output and productivity. Instead both of those metrics
> have increased smartly over the last two decades, indicating that
> instead of being in decline, US manufacturing is simply doing more
> with less.
>
> So it may be that machines and computers are doing more of the work
> that people used to have to do.
>
> Robert Reich sees signs of structural unemployment as well, writing in
> The Great Decoupling of Corporate Profits From Jobs,
>
> ... big U.S. businesses are investing their cash in labor-saving
> technologies. This boosts their productivity, but not their payrolls.
> [. . .] The reality is this: Big American companies may never rehire
> large numbers of workers. And they won't even begin to think about
> hiring until they know American consumers will buy their products. The
> problem is, American consumers won't start buying against until they
> know they have reliable paychecks.
>
> So what do we do?
>
> Maybe we need some changes in who gets what for what. Right now we
> have an economy that is structured to send most of its benefits to a
> few at the top, while the rest of us -- the help -- sink ever downward
> into less and less security. People with power and wealth benefit when
> they figure out how to cause other people to receive lower pay -- or
> just lose their jobs. Eliminating jobs brings bonuses to the
> eliminators -- a perverse incentive if ever there was one. If someone
> can figure out how to cut your pay and benefits or just get rid of you
> ("eliminate your position") they get to pocket what you were making,
> and you get nothing (and conservatives say you're lazy). If you don't
> own the company you're out of luck.
>
> In the past this perverse incentive was mitigated by people banding
> together in governments and/or unions and forcing the wealthy and
> powerful to share. But modern marketing science has been successful at
> making people believe that government and unions are bad for them.
> This was also mitigated by the ongoing need to find people to do the
> jobs that needed to get done. But with continual improvements in
> technology this need is reduced. We're living the result.
>
> Also, this perverse incentive structure assumes an infinite pool of
> customers to sell to, ignoring that the transaction of benefiting from
> eliminating a job also eliminates a customer. But modern business has
> become so efficient at job elimination that this comes into play. Who
> will be able to buy theTVs that the employee-eliminating factory
> makes, if all the employees are eliminated and have no income?
>
> These are structural problems that we can change. Let me just
> brainstorm a few possibilities for structural changes into the mix
> here:
>
> # Today when they replace a worker with a machine, the few at the top
> get another chunk of income, the worker gets nothing. But suppose a
> worker got to keep some of the economic benefit from getting laid off!
> Suppose that if your company replaces you with with a machine you get,
> say, 15% of the cost-savings as ongoing income. Heck, getting laid off
> would be a good thing, like winning a prize. After you get laid off a
> few times you only have to work part time. Get laid off enough times,
> you can retire.
>
> No young person* wants a part-time job. Besides pay, he wants to belong
to a
> group, have a role in it and spend most of his time with it. (*I've written
> "young" person because he's the crux of the modern problem -- the swelling
> number of people who will never have a job in today's increasingly
automated
> set-up.)
>
> # Suppose we just shorten the workweek? What if we change from a
> 40-hour workweek to a 30-hour workweek? Economist Dean Baker has been
> offering ideas for workweek reductions for some time:
>
> The other obvious way to provide a quick boost to the economy is
> by giving employers tax incentives for shortening their standard
> workweek or work year. This can take different forms. An employer who
> currently provides no paid vacation can offer all her workers three
> weeks a year of paid vacation, approximately a 6% reduction in work
> time.
>
> Very few people in interesting and/or well-paid jobs will consent to share
> it permanently. And they don't want a short working week either.
>
> # Suppose the corporations and wealthy were taxed at the rate they
> were taxed before all the deficits and income inequality started, and
> the government just sent everyone a check, which served as a base
> income? Then everyone's wages would be higher because desperate people
> wouldn't be fighting over the few jobs. So then the better those at
> the top do, the better all of us do.
>
> None of the very very rich pay a penny in tax in most advanced countries
> already. Most of the very rich pay far less tax than they should.
> Corporations and the wealthy always find ways of relocating themselves to
> avoid or minimise tax. The only way to stop this would be a totalitarian
> world government able to pry into every minute detail of a person's income
> and activities. As even "ordinary" nation-state governments can't keep
their
> own financial houses in order then preventing tax avoidance is impossible.
>
> These are just a few ideas for restructuring the economy in ways the
> help all of us instead of just a few at the top. Please add your ideas
> in the comments.
>
> We have a choice. We can continue with the system we have, and most of
> us -- the help -- will just get poorer and poorer while a few at the
> top take home more and more. Or we can change who gets what for what,
> and everyone comes out ahead.
>
> Money doesn't just pile up doing nothing. It either gets lost in foolish
> speculation and goes into others' pockets, or it's spent on goods and
> services (by which others are given an income) or it's invested sensibly
> (also producing jobs), or it goes to a public charity, or it goes to
> children who in turn do any of those four things. Money constantly
recycles,
> either within minutes or over several lifetimes. If you want to recycle
> money quicker -- which, of course, is highly desirable these days -- then
> incentives must be given to those who have the money. Preventing them
> getting it or keeping it in any way they like means that governments would
> have to be a great deal cleverer or a great deal more totalitarian than
they
> presently are or ever have been. In actual practice governments which
try to
> do these things destroy themselves with inevitable internal corruption.
>
> Keith
>
>
> *So which will it be, cake or death?
>
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>
>
> --
> Sandwichman
>
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>
> Keith Hudson, Saltford, England
>
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>
--
Sandwichman
