http://www.washingtonpost.com/opinions/robert-samuelson-the-scared-worker/2013/09/01/5384b58e-11cf-11e3-b4cb-fd7ce041d814_story.html?wpisrc=nl_opinions
Robert J. Samuelson
Opinion
Writer (Washington Post)
The
scared worker
By Robert J. Samuelson, Published:
September 1, 2013
On this Labor Day,
American workers face a buyers’ market. Employers have the upper hand and,
given today’s languid pace of hiring, the advantage shows few signs of ending.
What looms, at best, is a sluggish descent from high unemployment (7.4 percent
in July) and
a prolonged period of stagnant or slow-growing wages. Since 2007, there has
been no gain in average inflation-adjusted wages and total
compensation, including fringes, notes the Economic Policy Institute,
a liberal think tank.
The weak job market
has a semi-permanence unlike anything seen since World War II, and the
effects on public opinion extend beyond the unemployed. “People’s expectations
have been really ratcheted down for what they can expect for themselves and
their children,” says EPI economist Lawrence Mishel. There’s a sense
“that the economy just doesn’t produce good jobs anymore.” Possible job loss
becomes more threatening because finding a new job is harder. Says Paul Taylor
of the Pew Research Center: “Security is valued more than money because it’s so
fragile.”
What’s occurring is
the final breakdown of the post-World War II job compact, with its promises of
career jobs and something close to “full employment.” The dissolution of these
expectations compounds stress and uncertainty.
Over the past
century, we’ve had three broad labor regimes. The first, in the early 1900s,
featured “unfettered labor markets,”
as economic historian Price
Fishback of the University of Arizona puts it. Competition set
wages and working conditions. There was no federal unemployment insurance or
union protection. Workers were fired if they offended bosses or the economy
slumped; they quit if they thought they could do better. Turnover was high:
Fewer than a third of manufacturing
workers in 1913 had been at their current jobs
for more than five years.
After World War II,
labor relations became more regulated and administered — the second regime. The
Wagner Act of 1935 gave workers the right to
organize; decisions of the National War Labor Board also favored
unions. By 1945, unions represented about a third of private workers, up from
10 percent in 1929. Health insurance, pensions and job protections
proliferated. Factory workers laid off during recessions could expect to be
recalled when the economy recovered. Job security improved. By 1973, half of
manufacturing workers had been at the same job for
more than five years.
To avoid unionization
and retain skilled workers, large nonunion companies emulated these practices.
Career jobs were often the norm. If you went to work for IBM at 25, you could
expect to retire from IBM at 65. Fringe benefits expanded. Corporate America,
unionized or not, created a private welfare state to protect millions from job
and income loss.
But in some ways, the
guarantees were too rigid and costly. They started to unravel with the harsh
1981-82 recession (peak monthly unemployment: 10.8 percent). As
time passed, companies faced increasing competition from imports and new
technologies. Pressure mounted from Wall Street for higher profits. In some
industries, labor became uncompetitive. Career jobs slowly vanished as a norm;
managers fired workers to cut costs. Unions provided diminishing protection. In
2012, they represented only
6.6 percent of private workers. Old organized sectors (steel, autos)
have shrunk. New sectors, from high tech to fast food, have proved hard to
organize.
Companies have ferociously resisted. (Public
unionization is 36 percent, but that’s another story.)
Now comes the third
labor regime: a confusing mix of old and new. The private safety net is
shredding, though the public safety net (unemployment insurance,
Social Security, anti-poverty programs, anti-discrimination laws) remains.
Economist Fishback suggests we may be drifting back toward “unfettered labor
markets” with greater personal instability, insecurity — and responsibility.
Workers are often referred to as “free agents.” An article in the Harvard
Business Review argues that
lifetime employment at one company is dead and proposes the following compact:
Companies invest in workers’ skills to make them more employable when they
inevitably leave; workers reciprocate by devoting those skills to improving
corporate profitability.
“The new compact
isn’t about being nice,” the article says. “It’s based on an understanding that
a company is its talent, that low performers will be cut, and that the way to
attract talent is to offer appealing opportunities.”
Workers can’t be too
picky, because their power has eroded. Another indicator: After years of
stability, labor’s share — in wages and fringes — of non-farm business income
slipped from 63 percent in 2000 to 57 percent in 2013, reports the White House
Council of
Economic Advisers. But an even greater decline in 22 other advanced
countries, albeit over a longer period, suggests worldwide pressures on
workers. Take your pick: globalization; new labor-saving technologies; sluggish
economies. Workers do best when strong growth and tight markets raise real
wages. On Labor Day 2013, this prospect is nowhere in sight.
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