Friday, July 30, 2010

Wash Post business writer accidentally hits on the biggest problem in American economy

There was this amazing nugget today by Post business columnist Steven Pearlstein:
It is only in the world of Chamber of Commerce propaganda that businesses exist to create jobs. In the real world, businesses exist to create profits for shareholders, not jobs for workers. That's why they call it capitalism, not job-ism. There's no reason to beat up on business owners and executives simply because they're doing what the system encourages them to do.
This bears repeating: "businesses exist to create profits for shareholders, not jobs for workers."

It's a truth that we on the left sometimes ignore, to our own peril.

Our entire economy is set up so that we are reliant on "jobs" as our only source of income, as well as our health insurance, our place in society, our self-image, etc.

We desperately need jobs, but the corporations who control the jobs don't need us. In fact, they are making huge profits now because they have found that they can get along just fine with less workers.

So why is it that we have this irrational economy where so many millions are so reliant on jobs, which are becoming ever more transitory, elusive, and hard to find?

How can working people have any economic security at all when we are so reliant on jobs? How can we fix this problem?

The history of the last 150 years is filled with the struggle between capital and labor, the owners and the workers, over how much of the profits should go to the workers.  How's that been going lately? Private sector union membership in the US is now down to 7% and dropping, and corporations have moved jobs across the globe with impunity, looking for the lowest labor costs.
As more jobs get replaced by technology and businesses figure out how to do more with less workers, working people will continue to come out on the losing end of this battle with business. I wonder if it's the only battle we should be fighting right now.

Maybe we should acknowledge that businesses will always be looking to cut labor costs, and that we'll never have enough power to force them to act otherwise.

Maybe we should accept the nature of capitalism and instead of fighting it, we should find new solutions to get what we want: economic security for all--decent income, affordable health care, a retirement with dignity.

If we can't get those things from private employers, that leaves two options: jobs or income now, to steal the slogan from the 60s.

We could insist on government creating enough good jobs for everyone, a full employment program. This would at least force private businesses to pay employees enough so that they could compete with government for employees.

If businesses don't exist to create jobs for workers, maybe government programs should. There's probably enough work out there to be done, such as cleaning up our cities, repairing our crumbling infrastructure, teaching our children, etc.

A full employment program would cost a fortune, but it would ensure a thriving economy, as all workers would have a decent income, which would stimulate the economy as a whole.

A less expensive and more efficient option would be to just provide income directly to the American people. Just cut out the middle-man and provide every American with enough income to at least get by, and then they would have to work at jobs for whatever income they want on top of their basic universal income.

This approach de-emphasizes "jobs." Instead of dominating American life, jobs could be things that we do to earn extra money, be productive in society, use our talents, and interact with others. If work and jobs become less "all or nothing," then they might be more enjoyable and workers might be more happy.

Either way, it seems like as a society we need to rethink our economy and acknowledge that we can't count on jobs from corporations as our sole means of income anymore.

The job trends of today--massive unemployment, outsourcing, part-time work, using "independent contractors" instead of full-time employees, etc.--will continue to expand in the future.

Corporations are sitting on a huge pile of money--because they are afraid of the state of the economy, which is bad because there are not enough jobs. We're stuck in a vicious cycle, and we can't count on corporations to do the right thing. We can only count on them to do what is best for their bottom line. And if we owned a business, we'd probably do what is best for our bottom line also.

Instead of trying to convince them to create new jobs, or pay their current employees more, maybe we should just have them pay an Economic Security Tax and give that money directly to the American people. Providing the people with a basic universal income would actually help corporations by ensuring a strong consumer base and stimulating the economy, and lead to even greater profits down the road. We've tried trickle-down economics, and it didn't work. Let's try Rise Up Economics instead.

We should use our strength in numbers in the voting booth to create a new kind of economy that establishes economic security for all, outside of the corporate job box that we are stuck in.

We can't change the essential nature of business. But by acknowledging that, we can make other changes that provide working people with a better life and help companies' bottom lines in the long run. We can have an economy that works for everyone, but only if we think outside of the jobs box.


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'Doc Michael said...

Great content on this site, and a nice start to a very slow process. I think we may get there, but not quite by choice, but because of the economic devastation wrought by a collapsing ecosystem.

We will all be so poor as to be relatively equal, though the rich will always be with us. And they'll complain that they're not rich enough, because of overtaxation.

But good on ye, for framing this model so well.

H. Ome said...

Fantastic blog of Rise up Economics that gives the knowledge of Wash Post business writer accidentally hits on the biggest problem.

marc said...

Yes, basic income! All governmental efforts should be distributed directly and equally to the people...
On the other hand, our job is limited in time, and also inactive periods should be covered in a way maintaining our income level. A % of gross workforce cost (worldwide) should be reserved to redistribute in function of the carreer. And everybody should be equally enabled to participate in payed...or unpayed work. Let government intervene to give u those welfare...