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TOO MANY WORKERS, NOT ENOUGH JOBS
Frank Stricker,* [Advisory Bd and Executive Com.
member, NJFAC]
Commonweal, October
24, 2008 / Volume CXXXV, Number 18 SHORT TAKE
Though most Americans don't realize it, for the past three decades
real wages in the United States have not risen. In 2007 the hourly
wage of the average American worker, adjusted for inflation, was
lower than in 1972.
What caused this prolonged wage stagnation? Most observers acknowledge
the role played by economic globalization, in the form of outsourcing
and intense competition from abroad. But two other powerful factors
figure in the mix: the erosion of equalizing institutions and
a glut of available workers. We know a lot about the former, from
the decline of unions to the stubbornly low minimum wage. The
worker surplus is less familiar. We hear about specific or seasonal
labor shortages in the economy (nurses, farm laborers), but general
labor shortages are extremely rare. Federal data indicate that
we have achieved full employment only three times since World
War II: in the early 1950s (Korea), the late '60s (Vietnam), and
the late '90s (a miracle).
But even in the best times, our high employment rates have been
misleading. Take last April-before the full impact of the housing
collapse was felt-when the government announced an unemployment
rate of 5 percent. Scholars and activists have long questioned
the Bureau of Labor Statistics employment criteria, which characterize
as unemployed only those who have recently looked for work and
not found it. Thirty years ago the BLS inaugurated alternative
measures to include people who wanted work but had not searched
recently, and part-timers who wanted full-time work. Adding in
those categories, the bureau itself generated a 9.2 percent unemployment
rate for April. And when the National Jobs for All Coalition included
people who have given up looking for work, or are hampered from
working outside the home because of family responsibilities, it
came up with an unemployment rate of 11.1 percent. Our official
unemployment statistics, in other words, are misleading. We have
far more people available for work than get reported, and too
few jobs to give them. Among other consequences, this means weaker
bargaining power for employees, resulting in chronically weak
wages.
How might we work toward a solution? First, we need to come to
terms with the depth of the job shortage, using more accurate
figures. Second, the Federal Reserve needs to take unemployment
and low wages as seriously as it does instability in capital markets
or inflation. When it ignores hidden unemployment and low wages,
it does so at the peril of millions of Americans. Third, politicians
must use the current recession as an impetus for dealing with
our long-term jobs problem.
Addressing this problem cannot be done without large-scale federal
investment, committing public money to generate good jobs to repair
our crumbling infrastructure. Think of Katrina, the bridge collapse
in Minneapolis, the failure of levees this summer in the Midwest,
and the physical condition of many of our city schools. We ought
to expand the underfunded Youth Conservation Corps, which pays
young people to plant trees and conduct urban-beautification projects,
projects that refurbish America even as they build character.
We need more and better-paid child-care workers. Federal investment
in a government environmental corps, something similar to the
New Deal's WPA, could promote cleaner air and water and renewable
energy. It could help develop and deploy low-cost solar panels,
insulate homes and government buildings, and plant trees to clean
the air.
Some of these activities are already being fostered by alternative
groups like Green for All and the Apollo Alliance. But we need
federal funding to boost such efforts and insure that they provide
decent wages and benefits. While the WPA was a fine model for
putting large numbers of people to work at needed tasks, it kept
pay levels low, so as not to compete with the private sector.
We can no longer afford that luxury in an era when much of the
private sector is addicted to policies that rely on low wages,
stingy benefits, and reduced commitment to employees.
A major national jobs program would require affirmative action
for those living in depressed communities, but it need not be
limited to the very poor. It should be open to a broad spectrum
of Americans-such as the working-class men and women in the Midwest
who lost good factory jobs and now eke out a living at Wal-Mart.
But how do we pay for it? A program that would fund 4 million
jobs and leave money for administration sounds costly-and it would
be, probably on the order of $200 billion a year. Yet $200 billion
is less than some recent federal deficits; and in the end, whether
the money seems large or small will depend on whether you like
what it is doing. The issue isn't the cost but how we want to
use our national resources. Canceling the Bush tax breaks for
households earning above $200,000 would soon save over $100 billion
annually. Ending the war in Iraq, another $100 billion. There's
your jobs program.
While a broad federal jobs program would cost money up front,
in the long run it would create wealth by enriching the quality
of our lives and adding millions of new workers, who in turn would
pay taxes and contribute to Social Security. It would diminish
the number of people on welfare and food stamps, while stimulating
job creation in other sectors. In sum, it would increase overall
social well-being. Remember, too, the aim of a government jobs
program is not simply that every adult has a full-time job. Rather,
it is to ensure that eventually more people will have jobs that
pay well. People should earn enough to support a family. They
should be able to create enough of a financial cushion that they
can step out of the labor force to care for children, tend to
sick relatives, or engage in the democratic process.
*Frank Stricker, professor of history, labor
studies, and interdisciplinary studies at California State University,
Dominguez Hills, is the author of Why America Lost the War
on Poverty-and How to Win It (University of North Carolina
Press, 2007).
Copyright © 2008 Commonweal Foundation
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