Brad writes: >Do y'all [sic] allow your students to learn that employment in the United States has risen from 66 million in 1960 to 133 million today?< That the population and the employment/population ratio have risen, partly as more and more families had both adults working for pay (if they have two adults) in order to keep family income from falling too much? This barb says nothing about the issue of job rationing and job-competition. The bonelessness story in labor economics is told well (for those who can read only economics) by Lester Thurow, in his GENERATING INEQUALITY, written before he became a purveyor of fluff. The idea of quantity constraints on labor-power markets in macroeconomics comes from Patinkin and shows up in Malinvaud. Throwing out an out-of-context statistic hardly deals with the theoretical issues. (Is this kind of meaningless barb the usual method among economists at Berkeley these days, Brad? If so, standards have fallen drastically since I left.) >The U.S. economy has lots of problems, but a fixed and ungrowing >supply of jobs is not one of them. And to suggest that >education-and-training programs are a scam because there is a fixed >supply of jobs seems to me to be very, very, very wrong... Noone said that training is a scam. (A basic rule: flame-wars can be avoided by careful reading, rather than by the application of Evelyn Wood techniques.) A pure job-competition model says that increased training of poor individuals can allow some to escape poverty, but doesn't solve the fundamental societal problems that create poverty. One of the things that happens is that the minimum skill requirements rise. (It used to be that a Ph.D. in Chemistry was enough to get a job. Nowadays, it's not. A post-doc is required.) (This is akin to a common Marxist story explaining the nature of class: it's possible for a small number of individuals to escape the working class (from being dominated, alienated, and exploited by the capitalists) but it's impossible for the entire class to do so without abolishing the capitalist mode of production. If a significant number were to exit the working class (without being replaced by an equal amount undergoing downward mobility), the basis for capitalist profits would evaporate, the economy would stop growing, and the unemployment rate would soar. The last would help restore "equilibrium," re-creating the basis for capitalist exploitation.) Wojtek writes: >Brad, I do not think that 'fixed' job supply - as you claim - is the moral >of the story. It is labor market segmentation (if you recall that >institutionalist argument of 1970s and 1980s) - that is, white purebread >male dogs getting the prime choice bones, whereas the female and coloured >ones ending up with the scraps. You surely cannot deny that the gap >between "primary labor markets" and "secondary labor markets" widened since >1960s - not top mention the fact that a significant share of secondary >market jobs have been exported overseas. This is part of Thurow's story (as I interpret it). There's a queue of job-seekers trying to get at the limited number of "good jobs" offered by the primary sector. If an individual gets more training, he or she can move closer to the front of the queue, but (given the supply of jobs) that simply bumps others further to the rear. I would agree that the gap between the primary and secondary labor markets has widened since the 1960s. Part of this is because of the shrinkage of the primary sector (fewer jobs offering on-the-job training, job security, real pensions (as opposed to defined-contribution plans), decent medical insurance, etc.) With the shrinkage of the primary sector, the lower tiers of the hierarchy are kicked out first, leaving the people at the top still earning high incomes, while those in the lower tiers of the primary sector join the less-paid, insecure, poor-benefits secondary sector. In academia, this can be seen in the relative rise of the use of part-time and visiting profs. Mat writes: >Of course. Everyone [except neoclassical economists -- JD] knows that politically-enforced unemployment has been/is used to maintain price stability, as well as to discipline labor and so on. I would argue that Marx's theory is not the same as either the natural rate of unemployment or NAIRU (and the natural rate of unemployment and NAIRU are not the same thing either), but the basic idea that unemployment (and excess capacity) is used to hold down wages and discipline labor is all there more or less. The term 'reserve army' is even used, e.g., in Stiglitz and Shapiro's "Equilibrium Unemployment as a Worker Discipline Device" (without reference to Marx, of course) in AER, 1984. < If this is a reference to what I posted yesterday, we basically agree. >But it doesn't matter whether the number of "raw jobs" has increased (it *matters* of course, but it misses the point). What matters is whether there is unemployment, if so then why is there unemployment, and what policy or policies are available to eliminate unemployment and to deal with the direct and indirect effects of unemployment. Then, of course, we have to ask what *kind* of jobs are being created, and so on. But it is very clear that the Fed has used the policies at its disposal to create or maintain unemployment to in order to maintain price stability and discipline labor.< I agree. But we should also stress that measured (official) unemployment has a greater ability to discipline labor than it did 25 years ago. With unions flattened and the already-anemic welfare state gutted, and with job security severely undermined by "downsizing" and the like, workers are much more insecure on the job, as even Greenspan recognizes. This undermines the inflationary potential of the US economy. As Bob Pollin points out in his article in the REVIEW OF RADICAL POLITICAL ECONOMICS (Summer 1998), the US labor market is becoming more and more like that of Bolivia: in the latter, overt (officially-measured) unemployment is nil, but the high degree of insecurity of workers within this context is enough to discipline labor. (Of course, when the miners get uppity, the military steps in.) The increased insecurity of workers is intimately linked to the relative shrinkage of the primary sector mentioned above. Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Faculty/JDevine/jdevine.html
