George Bush, with his policy of accelerated Reaganomics, made a real mess of the United States economy before he left office. It was not bad enough that he presided over a massive outsourcing of good American jobs, but his deregulation, tax cuts for the rich, and deficit spending created the worst income distribution since the 1920s and kicked off a serious recession resulting in the loss of millions more jobs.
In his entire eight years in office Bush only created about a million jobs (while his predecessor, Bill Clinton, created 23 million in his 8-year stint in office), and more than lost those in his recession (which started in the last part of 2007). President Obama is already poised to have created more jobs in his first two years in office than Bush did in eight years. That is a good thing, but not as good as you might believe.
The problem resides in just what kind of jobs are being created. This is not a new problem. Even back in the Bush administration, while good jobs were being sent overseas (where wages could be cut to less than minimum wage levels), the new jobs being created were low-wage jobs that would not allow a man/woman to support a family. Unfortunately, the problem is persisting under the current administration.
The chart above is indicative of the problem. The chart shows the five fastest growing jobs in the United States. Only one of those jobs (registered nurse) is above the median wage in America. The other four (food preparation and serving, home health aide, warehouse stock clerk, medical assistant) are well below the median wage and approaching the minimum wage. The problem is even worse when you consider the median wage has been depressed for the last twenty or more years and won't buy nearly what it once would have bought.
While the cost of nearly everything has climbed sharply for the last twenty years, the wages of the bottom 80% of Americans have been stagnant. This alone would have accounted for the pain being felt by middle and working class people, but it was made even worse by the millions of jobs lost by the Bush recession. Now the new jobs being created are lower-paying jobs than the jobs that were lost. It's hard to rejoice in the creation of these kind of jobs.
President Obama has said he wants to give tax cuts to companies that don't outsource jobs (and hopefully bring good-paying jobs back to the United States). That would be a good start, but much more needs to be done. This recession will not be ended by the creation of minimum-wage jobs (even a lot of them). That would just continue the pain being currently felt by ordinary Americans. And it would set the country up for another, possibly worse, recession or depression.
The vast difference in both accumulated wealth and income distribution between the richest 5% of Americans and the rest of America was the real cause of this recession (while the financial mismanagement by Wall Street was just the trigger). The only real cure for our current economic woes is to find a way to more equitably distribute the nation's income.
The nation's health is not determined by how rich the richest 1-5% can get. No matter how hard they try, this small number of people just don't have the purchasing power to keep an economy as large as ours growing. While the Republicans (and the rich) don't want to admit it, America has always seen its best times when the working and middle class people have had adequate purchasing power to live a decent and comfortable life. When these people have the money to buy, everybody benefits -- even the rich and the corporate interests.
Minimum wage jobs may be fine for high school students, but they won't support a family. And they won't lift this country out of the recession.
You missed the two most important points of the chart:
ReplyDelete1) Three of the five fastest growing jobs are in the medical field. This is because as we Baby Boomers age, we're going to generate a greater need for people to take care of us. It's a simple matter of supply and demand.
2) Of the five jobs on the chart, registered nurses are the only ones who require a postsecondary degree - a minimum of an associate degree - as well as passing a difficult licensure examination. Many RN's continue their education, earning Master's degrees (my wife, an RN nurse educator, has two Master's degrees - one in nursing and another in adult education). Other RN's with MSN degrees serve as nurse practitioners. Compare the responsibilities and level of expertise required to be a registered nurse with the other four jobs, and it's like apples and oranges.
Ted, sometimes I get the impression that you think of "job creation" as some sort of medieval alchemy: you put tax money in one end and good paying jobs miraculously come out the other end, like turning straw into gold.
In reality, good paying jobs are based mostly on two things: the demand for the services rendered and the supply of people who can perform those services. If warehouse stock clerks could fill a stadium every Sunday, and if only a gifted few could stock warehouses, they might be paid as well as professional football players. Likewise, if home health aides and medical assistants had the same skill sets and exercised the same kinds of responsibilities that registered nurses do, they'd earn as much as RN's.
So what's the moral of the story? Find something you really enjoy doing (preferably something that's in short supply), be the very best at it that you can possibly be, and be a life-long learner who's flexible enough to take on something new when the supply of people in your chosen field exceeds the demand.
In my 60 years, I've been a military intelligence specialist, a foreign language educator and a paralegal. When the Cold War ended, and my knowledge of Warsaw Pact order of battle was no longer in demand, I pursued a career in teaching. When I arrived in the Texas Panhandle and discovered that the demand for postsecondary teachers of German (let alone Polish) was pretty much nonexistent, I shifted gears again, pursuing a specialty that was extremely rare among paralegals in this area in a legal field that was nonetheless growing in demand worldwide.
Yet through all this, I've never earned what would be considered by most to be a great salary. But as former (and would-be future) California governor Jerry Brown used to say, I've been paid in "psychic dollars" - that intangible income derived from doing something that I find intellectually stimulating.
Ultimately, what I've gotten out of my three careers is a factor of what I've put into them.
That does not change the point I was making. Whether you like it or not, workers need to make a decent wage - enough that would allow them to support there families. This would not only improve the situation of workers, but the country in general (and business).
ReplyDelete"This would not only improve the situation of workers, but the country in general (and business)."
ReplyDeleteOK, let's say I run a business called Company A that makes widgets. Because of the recession, there's no great demand for widgets, so my profit margin is razor thin.
But I know my workers "need to make a decent wage - enough that would allow them to support there [sic] families." So I give them all raises.
Since payroll is a major portion of any company's budget, and since my payroll has just gone up, I can't afford to buy enough raw materials to produce even what few widgets my customers need. So they start buying from company B, where the boss has frozen wages until business starts picking up.
Well, maybe the owners of Companies C, D and E are as generous as I am towards their workers, even though they can't afford it either. So the same thing happens, and Company B now has enough of a profit margin to give their workers the raises they so richly deserve.
How did raising the wages of my employees in a recession "not only improve the situation of workers, but the country in general (and business)" - except of course for Company B?
Maybe instead of raising wages for workers, your company needs to cut salaries for executives to a more reasonable level (say about what the Japanese ratio is). Then when the company starts doing better reward all employees, instead of just the bosses.
ReplyDeleteHowever, you and I both know that many companies are making cuts they don't have to make in worker salaries and jobs, just to show a larger short-term profit and get bigger executive bonuses. This is not in the long-term interests of the company (or the workers) - only the executives getting the bonuses.