Another Labored Day

So another Labor Day has come and gone, and summer has ended. Yeah, the autumnal equinox falls on September 22nd at 10:49 in the morning Eastern Time this year, and that’s the real end of summer – but don’t tell the kids. They’re back in school already, and everyone else shows up at work on the Tuesday morning after the holiday knowing full well that the brutal and deadly serious part of the year now begins. There will be no more sun and fun. The cold winds will blow soon enough. It’s a reentry into real life – the French call it La Rentrée – when everyone comes back from their fully-paid month off and Paris kind of reopens for business. That’s when the snooty restaurants reopen for business. Here it’s when everyone gets serious, or pretends to.

Labor Day means nothing to folks here otherwise – it’s just the last day of good times and lemonade. But it is a real-enough holiday – the federal holiday established in 1894 to celebrate workers, not bosses, and set at the end of summer because International Workers’ Day on May 1st each year is for the commies. We’re not like them, as we like our bosses, or at least we understand capital, and exceedingly rich capitalists, are far more important than labor. The captains of industry built the modern world after all – risking their fortunes to amass even greater fortunes, and we all got the goodies they invented. So Labor Day is kind of a day when the servants and worker bees – the support staff – get a pat on the head and some time with the family. It’s kind of a gracious acknowledgement of the insignificant little people, set up initially to give them some way to feel good about themselves, even if there’s no logical reason they should. But even that has been lost over time. Labor Day is now just another holiday, celebrating nothing in particular.

At least it’s a real holiday, not like Father’s Day and Mother’s Day, and Grandparents’ Day and Secretary’s Day (now Personal Assistant’s Day until everyone’s Apple gizmos take care of most everything for us all) – those holidays invented by the greeting card companies, for obvious marketing reasons. Those are the Hallmark holidays, not recognized by the government – no one gets the day off. You just buy the appropriate greeting card, if you remember. And a gift is nice too. A lot of bad neckties used to be sold the day before Father’s Day. Mother’s Day still generates hundreds of millions in flower sales, and candy too. Those are the fake holidays, cleverly designed to extract cash from your wallet. It works.

Anyone can invent a holiday of that sort of course, and now a new Wall Street Journal op-ed calls for National Corporation Day – to honor America’s underappreciated job creators, who risk all to make our lives better, They deserve a little love too, although just who you’d send the greeting card to is unclear. Actually, the Wall Street Journal, calling for this on Labor Day, seems to have in mind an official national holiday, with parades and everything, and a day off – just to balance things out. We can’t have the workers thinking they’re just as important as the corporations that employ them, if only for a day, even if none of them remember what the day is about anymore.

No one remembers. There was this year’s Labor Day tweet from Eric Cantor:

Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.

No we don’t – the Haymarket Riots and the Pullman Strike that led up to the federal government establishing the Labor Day holiday – reluctantly, to keep the peace – were not about the wonderful people who built Chicago’s McCormick Harvesting Machine Company or the guys who built the Pullman Car Company. The workers wanted an eight-hour day and fair treatment, and to be paid what they were told they’d be paid – and they were ready to fight for that. Many died. Cantor wants to hijack the holiday and make it all about the noble bosses he imagines. Of course it’s mostly the current Republican buzz words for this election cycle tossed together rather haphazardly – just words. At least the Wall Street Journal presented something logically coherent, if a tad odd.

Josh Marshall adds this:

Look, I don’t expect Republicans, whose party has moved to a place of mutual loathing with the US Labor Movement, to use Labor Movement slogans. But people “who have taken a risk… and built a business”? Really?

Marshall was amused, but David Atkins wasn’t:

As a small business owner who understands that my value to society is no more than that of a teacher, and who knows that my activism does far more for humanity than the smattering of jobs and economic activity my business creates, I would like to be the first to tell Eric Cantor to go to hell.

Nor is Eric Cantor the first to make statements in this vein today.

What the GOP is doing this Labor Day is akin to thanking weapons manufacturers on Memorial Day. It’s sick, disrespectful and little more than tone-deaf plutocratic jingoism. It’s not enough for them to own all the power and the money, crushing everyone underneath them. They want to be loved for it.

Fat chance…

Atkins is a small business owner, but he’s also a Democratic operative out here in California, so you’d expect that reaction. Still, there’s nothing really new here. The first bill Obama signed into law, before the Republicans found a way to block every single bit of his other legislation, was the Lilly Ledbetter Fair Pay Act of 2009 – guaranteeing women the right to sue for equal pay for equal work. The Republicans screamed bloody murder – the last thing we needed in an economic crisis was more regulation, making it harder to do business and thus harder to create jobs. And most employers would do the right thing anyway. Why not just trust them? Additionally an underlying theme seemed to be that even if women got paid less for the same work, much less, maybe they were just fine with that, more than willing to accept lower pay to help the recovery along, realizing that new rules only hobbled businesses at just the wrong time. There must be smart women like that everywhere, or so the thinking went. There weren’t.

The Republicans must have been disappointed, but it would be easy enough to extend their argument into the absurd. Think about it. If every American worker – save for senior management and corporate officers – would agree to work for two months each year for free, and work the other ten months for no more than minimum wage, for a period of say five years, American businesses would roar back to life. It would be boom times. We’d be at full employment right away. Yes, there would be no Americans able to buy a damned thing, but we could sell a ton of stuff to the rest of the world. Our trade deficit would disappear like magic and we’d be the dynamic envy of the world. And if you somehow felt you really needed money – for rent or food or a new pair of shoes – well then you could build a business of your own and earn your own success, like Eric Cantor says most Real Americans do.

It’s a thought. You just extend the logic, but of course there’s the real world. Most economic activity in the country is Americans selling goods and services to other Americans – you can’t subtract demand and not expect disaster. Paying almost all workers something above what they call a living wage keeps the whole system working. There’s no way now to rely on foreign markets now anyway – Europe is a mess and China is pretty good at blocking imports and making their own versions of everything we make, violating all intellectual property and trade-secrets rights of course. They don’t much care. And the Brazilians make their own stuff – they don’t need ours.

So we’re stuck. As much as any good capitalist hates the idea, we do need to pay reasonable wages to the support staff and servants. Even Henry Ford knew that – although he caught a lot of crap for paying his workers five dollars a day way back when. The news this Labor Day, however, is that all that sort of thing may not matter:

While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project.

The disappearance of mid-wage, mid-skill jobs is part of a longer-term trend that some refer to as a hollowing out of the work force, though it has probably been accelerated by government layoffs.

“The overarching message here is we don’t just have a jobs deficit; we have a ‘good jobs’ deficit,” said Annette Bernhardt, the report’s author and a policy co-director at the National Employment Law Project, a liberal research and advocacy group.

The report looked at 366 occupations tracked by the Labor Department and clumped them into three equal groups by wage, with each representing a third of American employment in 2008. The middle third – occupations in fields like construction, manufacturing and information, with median hourly wages of $13.84 to $21.13 – accounted for 60 percent of job losses from the beginning of 2008 to early 2010.

Take all the government layoffs and add that all the jobs being added pay far less than before and everything really does hollow out. In fact, Dan Froomkin wrote a recent article about our new low wage economy. He sees both parties offering a rather vague jobs agenda, with Obama hamstrung by the Republicans from doing anything that might work and the Republicans just not offering anything that might work at all, as bad times are good times for them.

Froomkin:

So far, that debate mostly involves attacking the other guy, rather than advancing any real solution. The Obama campaign has been trying to define Mitt Romney as an effete champion of outsourcing (with some justification) while the Romney camp has dwelled on Barack Obama’s failure to reignite the job market (also with some justification, though in some significant part the failure is because of GOP obstruction).

Their descriptions of their own plans are no more edifying. As the incumbent, Obama has to run on his record – and despite his talk of bold solutions, that means either exaggerating his successes or making a lot of excuses.

Romney, meanwhile, offers little more than a collection of vague allusions to the wholly disproven theory that tax cuts lead to hiring.

It’s all nonsense:

Jeff Faux, a progressive economist who founded the Economic Policy Institute in 1986, is the author of the new book, The Servant Economy: Where America’s Elite Is Sending the Middle Class – “The mantra, as you know, in today’s political debate is jobs, jobs, jobs,” he told an audience at EPI recently. “Listen carefully because the subtext is low wages, low wages, low wages.”

Faux argues that by the mid-2020s, even with the most optimistic assumptions about economic growth, current trends indicate that the average American’s wages will drop about 20 percent. One big factor is that more and more good jobs will go overseas, leaving even America’s best and brightest no alternative but to enter the service industry.

“You go into an Apple store and you see the future,” Faux said. “The future’s not in the technology – the future of the labor force is all in those smart college-educated people with the T-shirts whose job is to be a retail clerk for Chinese goods.”

Froomkin then quotes Faux in his book explaining that as the super-rich get even richer, they’ll need more and more servants:

They will hire people to take care of their large homes and to tutor their children in Chinese, tennis, and sophisticated strategies for getting into the best private schools and universities. They will hire personal assistants to shop, pay their bills, and run their errands. Coaches will come to their homes to instruct them in physical fitness, mental relaxation, and spiritual transcendence. They will need maids, cooks, and gardeners.

Maybe we have a new aristocracy now, or something, but Froomkin adds this:

Neither party, Faux argues, is addressing the economic realities that make this the most likely future for our country – because changing course would require massive government intervention. There’s a pretty strong consensus among all but the most ideologically conservative economists that the solution would involve considerable public investment in education, infrastructure, and green energy, new policies to promote domestic manufacturing, more activist regulation of the financial industry in particular, and a more progressive tax structure.

But no matter who wins the election, Faux said, the governing elite have pretty much already ruled out that agenda, in favor of light regulation and governmental austerity.

“I think Romney and Ryan are reactionary disasters. But the last four years should have told us something, and that is the power of big money to intimidate the Democrats,” he said. “The deal has already been made… Government over the next 10 to 15 years will be starved for revenue.”

Heather Parton (Digby) adds this:

I don’t know that the Democrats have been intimidated. It looks to me as if they’ve bought into the program. But it doesn’t really matter, does it? …

It would appear that everything’s going according to plan. If they can agree to slash government severely over the same 15-20 year period, I’m guessing the 1% will be set up for a very long time.

And Labor Day will mean even less, as David Atkins has been concerned about how both parties have been captured by the ideology of Assets and Wages:

American public policy on both sides of the aisle reoriented itself away from a focus on wages and toward a focus on assets. Specifically, the idea was that wage growth was dangerous because it led to core inflation in a way that asset growth did not. American foreign policy became obsessed even more than it had been with maintaining access to oil, both to prevent future oil shocks and to prevent inflationary oil spirals. Wage growth was also dangerous because it would drive increasing numbers of American corporations to employ cheaper overseas labor.

This was a shift, and it generated obvious problems:

That left the question of how to sustain a middle class and functional economy while slashing wages. The answer was to make more Americans “true Capitalists” in Reagan’s terms. Pensions were converted to 401K plans, thus investing about half of Americans into the stock market and creating a national obsession with the health of market indices. Regular Americans were given credit cards, allowing them to take on the sorts of debt that had previously only been available to businesses. Most crucially, American policymakers did everything possible to incentivize homeownership, from programs designed to help people afford homes to major tax breaks for homeownership and much besides.

That’s what Eric Cantor was talking about, really, but nothing is simple:

Low prices on foreign-made goods were also a policy priority. This had a dual benefit for policymakers: lower prices offset stagnant wages, while keeping core inflation low. Free trade deals were also a major centerpiece of public policy in this context. Few politicians actually believed that these deals would help increase wages and jobs in America. But what they were designed to do is keep low-cost goods coming into America, while increasing the stock value of American companies exporting goods overseas, thus raising asset values.

Low interest rates were also important. Renters and savers suffer in a low-interest rate environment, but borrowers and asset owners do very well. Tax cuts, of course, are also helpful in offsetting the impact of wage stagnation.

It almost seems like a plan, and now Atkins says this:

This is not a uniquely American or even Anglosphere problem. This ideological uniformity is occurring to a greater or lesser degree across the entire developed world. The Left is in a universal quandary over what to do about it, insofar as the established Left recognizes it at all.

In America, the Democratic Party is a force for good in many ways, especially in ensuring equal access to our very imperfect meritocracy regardless of race, gender, sexual orientation, etc. But by and large, the Democratic Party is quite blind to this problem. It’s difficult for people trapped in a system whose problems they don’t fully understand to even begin to offer solutions to those problems. It is human nature to cling to a broken system for fear of alternatives until it’s far too late, unable to even visualize alternatives or realize what is even wrong with the current system.

Still there are those odd dreamers who think this a good thing:

Among those who see the problems and see the end coming, there are many who look forward to the collapse, envisioning utopias that will never come to fruition and severely underestimating the darkness, prejudice, ignorance and injustice that inevitably arrive when large social systems fall into disrepair. Anarchists always believe that collapse must be superior to the current social order – until the social order disappears. When societies collapse, the creative destruction is far more destructive than it is creative.

That’s not cheery – none of this is – and Froomkin had cited Peter Edelman, a law professor at Georgetown University, in his recent book So Rich, So Poor: Why It’s So Hard to End Poverty in America on how the proliferation of low-wage jobs, and not the lack of jobs, is the single biggest cause of persistent poverty – “The first thing needed if we’re to get people out of poverty is more jobs that pay decent wages. We’ve been drowning in a flood of low-wage jobs for the last 40 years… Half the jobs in the nation pay less than $34,000 a year, according to the Economic Policy Institute – a quarter pay below the poverty line for a family of four, less than $23,000 annually.” And wages in the bottom half “have been stuck since 1973, increasing just 7 percent” – we’ve been hollowing out the economy for a long time.

Froomkin also cites others saying this problem is a matter of basic ethics as much as it is one of economics, and he himself can only add this:

With so much at stake, journalists have good reason to go beyond the empty sound bites and, at the very least, ask people who talk about creating jobs: What sorts of jobs?

But beyond that, it’s worth exploring the question of why a much bigger government response to the jobs crisis is so far off the political agenda of the governing class? How did that happen? Who benefits? And who loses?

Maybe you don’t want to go there. That takes you into Occupy Wall Street territory, and talk of the One Percent who now own the Republican Party, and the Democratic Party too – and that leads to class warfare of course. We can’t have that. Heck, you get Labor Day off. What more do you want?

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in Austerity Economics, Class Warfare, Economic Theory, Jobs Crisis, Labor Day and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

One Response to Another Labored Day

  1. Dick Bernard says:

    Alan has hit another home run here. I’m a retired teacher union staff person, and I wrote a short piece on this topic on Labor Day. http://www.outsidethewalls.org/blog/?m=20120903. (In the photo, I’m the guy in the red shirt; all but one of us in the photo are retired teachers or staff; one is a current union staff member. There should be regular gatherings like this all over the country.)

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