The Jaded Prole

A Progressive Worker's Perspective on the political and cultural events of our time.

Tuesday, August 24, 2010

A Solution for Increasing Jobs

There is no lack of rhetoric expounded on the need to dramatically reduce unemployment. Using the most revealing government figures, nearly 17% of the US workforce is unemployed. That figure means that nearly one in five US citizens working before the economic crisis, or joining the workforce since, is, at this moment, idle or under-employed. Counting the involuntary part-time workers and discouraged workers, the total number of US workers seeking work totals nearly twenty million. Though the media and the governing cabal have shown little more than token interest in the staggering human tragedy facing these workers and their families, nearly everyone voices a determination to see unemployment reduced. And while it’s easy to procrastinate on a solution, it must be remembered that the economy needs to generate at least 150,000 jobs a month to keep up with population growth. And therein is the problem: while everyone may want full employment, few have an honest, real plan to achieve it.

Instead, we get lots of talk about “green” jobs, retraining, tax incentives, etc – the usual malarkey that constitutes a stump speech for Democratic Party candidates. Historically, most Democratic leaders and unimaginative, class-collaborationist labor leaders have sought to prompt – “incentivize,” to use the fashionable term – business to hire more workers. This thinking accepts the primacy of the corporate class and seeks to motivate that class by appealing to its selfish motive: profits. For decades, local, state and federal governments have poured billions of taxpayer dollars into the pockets of developers, contractors, service providers and factory owners to entice and cajole them into hiring more workers. Tax incentives to businesses and entrepreneurs have substantially absented the corporate world from its place as fellow taxpayers, leaving the burden on the rest of us.

Despite the persistent execution of this strategy, all economists agree that we have lived through a “jobless” decade. Since the recession, job creation has lagged far behind population growth and the demand for good-paying jobs. That is a fact. The crisis beginning in 2007/2008 only exacerbated this development by shedding millions of jobs. And since the false recovery, job growth has been non-existent, despite the dramatic rise in profits. That, too, is a fact. Only those ideologically wedded to capitalist dogma fail to see this. The strategy is completely bankrupt.

Responding to the crisis, the Obama administration crafted a hybrid plan that sought to both generate recovery and spur job creation with an $862 billion stimulus program. Commendably, the Administration devoted nearly $300 billion for aid to states, unemployment benefits, and food stamps. Offsetting this was a $336 billion financial incentive package of tax cuts, one-time payments, etc., meant as an expensive bone to those economic Neanderthals who still believed that the recovery would come when folks had a few extra bucks in their pockets. This was merely another example of Obama’s oft-repeated desire to appease the flesh-eaters of the right, a useless political gesture that will be paid for by future taxpayers.

Remaining in the package was a total of $230 billion, a not-insubstantial sum, despite the squawking of well-meaning liberal economists who thought the package inadequate. But simple arithmetic would show that this allocation would support over 5-6 million public sector jobs at $35,000 for a year, even with a modest factor for overhead costs. Moreover, including a conservative application of the economic multiplier effect would add thousands of additional jobs and growth in the private sector. Of course, that would amount to direct federal employment, an approach comparable to that adopted during the Roosevelt administration in response to the Great Depression. But from slavish worship of the supremacy of the private sector and the overpowering influence of that sector on the campaign accounts of our leaders, that solution was ruled out of hand by all but the fringes of government and the labor movement.

Instead, the Obama Administration chose to follow the same path that has proven bankrupt for so painfully long: dangle projects with risk-free public subsidies in front of private contractors. While there still are substantial funds unspent, the results have been disappointing by everyone’s account. At the time the program was initiated, few asked how the funds would be dispersed (I did, on my blog. See How Not to Create Jobs). Would the funds simply go into the pockets of contractors who would complete the work with an existing work force? Would much of the effective stimulus be absorbed by profits and not employment? Indeed, the results were disappointing, but only to those who naively believed that contractors or project managers were in the business of creating jobs. They were happy to rake in profits from infrastructure projects or accept subsidies for new enterprises outside the conventional market, provided the government guaranteed the funding and assumed the risk. In this regard, the Administration merely created a duplicate of the wasteful, profit-bloated defense industry --- no new ideas here, but an additional debt on the shoulders of the taxpayer.

Labor history offers us a different solution, an effective solution. After the Civil War, a movement stirred in the US to shorten the working day to eight hours. Eight-Hour Leagues sprang up throughout the country. Labor embraced the eight-hour day movement and the movement strengthened and helped to organize labor. This struggle reached across the oceans and spurred similar movements around the world.

Winning the eight-hour day became the galvanizing issue of all labor struggles for almost a century. Unions were built and contracts won around achieving a shorter working day. The political landscape – from labor’s point of view – was shaped by the eight-hour struggle.

Today, a shorter workweek would offer a victory for labor against the relentless offensive mounted against workers that has stagnated or reduced benefits over decades. Many, if not most, in labor have not known a major victory for working people in their lifetime. But more urgently, a shorter workweek would offer an answer to the persistent and damaging high unemployment brought on by the economic crisis. A mandatory shorter working day and working week, with strict overtime penalties for exceeding those limits, would force employers to hire more workers to maintain the same level of production or to increase it. A federally mandated shorter workweek – a seven-hour workday/thirty-five-hour workweek – would decrease the workweek by over 14% and potentially increase employment by the same amount. Of course, employers would fight such an increase in hiring as a threat to profitability, but the pressure of the market – the shortage of existing labor – would force new employment in order to even maintain existing levels of production or service activity.

Unlike the conventional answers that place the burden of employment recovery squarely on the backs of taxpayers, the shorter-workweek strategy attacks the profits of the employer. Enabling legislation should guarantee no reduction in pay, as well as reducing hours of work. Accordingly, it is from the surplus value of the capitalist enterprise that new employment would be funded. Only a solution that solves the unemployment problem with a shift in the economic balance sheet from capitalist to worker counts as an overdue offensive in the class struggle and a real advance for working people.

Where the bankrupt, ineffective “incentive” model of employment growth is shared by both political parties and acceded to by most of organized labor, the shorter-workweek model would mark an embrace of class militancy, as well as an effective measure with a noble historic precedent. Unemployment did not come from some inexplicable quirk of nature; it came from the ruthless, conscious profit seeking of the corporate class. In a just society, they should pay for its extinction.

The Fair Labor Standards Act of 1938 governs these matters. It has been amended many times since 1938 to improve the status of labor, but never to change the length of the working day. Maybe the time is now.

Zoltan Zigedy


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