Two Roads Out of Recession

shovel ready jobsRecent events in Washington, D.C. should provoke fear and outrage in the average American worker. As the jobs recession staggers on, politicians and labor leaders alike seem bizarrely distanced from reality, unable to advance any ideas that remotely correspond to the basic demands of those tens of millions of unemployed, under-employed, or poorly paid workers.

Instead, what we get is President Obama’s recent groveling to the corporate-dominated Chamber of Commerce, pleading with them to hire workers. The President’s recent speech to the Chamber implied many dangers, which neither labor federation– AFL-CIO and Change to Win — bothered to point out. In fact, the AFL-CIO applauded sections of the speech, rather than condemning its sinister motives. If labor unions align themselves with the President’s and the Chamber’s pro-corporate path out of the recession, a workers’ road to recovery will be bypassed.

What is the corporate route out of recession?  Economist Robert Reich explains:

“[The Chamber of Commerce] has a deep, abiding belief in cutting taxes on the wealthy, eroding regulations that constrain Wall Street, cutting back on rules that promote worker health and safety, getting rid of the minimum wage… fighting unions, cutting back Medicare and Social Security, reducing or eliminating corporate taxes, and, in general, taking the nation back to the days before the New Deal.” (February 8, 2011).

This is the group that Obama insists that it’s possible to “work together” with to create jobs. Under Obama’s vision, these pro-corporate policies will make Corporate America the best competitor on the global market, a goal he seems nearly fanatical about.

The President wrongly believes that, by giving in to the above corporate policies, big business will hire workers — at low wages — out of the kindness of their own hearts, as if morality has ever played any role in the art of profit-chasing.

Here’s what Paul Krugman of The New York Times has to say about focusing U.S. economic policy around making U.S. corporations more competitive:

“…isn’t it at least somewhat useful to think of our nation as if it were America Inc., competing in the global marketplace? No.  Consider: A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that’s more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success?” (January 23, 2011).

Unfortunately, U.S. labor leaders have not yet drawn the same, correct conclusions as a moderate liberal like Krugman. Worse yet, The AFL-CIO has worked, unforgivably, to bolster the Chamber of Commerce’s credibility, forming a “partnership” with these corporate snakes to “rebuild America’s infrastructure.” The Chamber’s President, Tom Donahue, was quick to take advantage of this positive press, which inevitably aims to fool workers into thinking their enemies are their friends:

“With the U.S. Chamber of Commerce and the AFL-CIO standing together to support job creation, we hope that Democrats and Republicans in Congress will also join together to build America’s infrastructure.”

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Comments

  1. Spearmann says

    @ Keith…

    I don’t think there is hyper competition… the term, to me, makes little sense. You have so much money in the bank. If you have a couple of slow months, you go broke. That’s how it is for basically every business operating in the US with few exceptions. You don’t look for the most efficient way to do things because you are hypercompetitive, you do it because you don’t want to die.

    Staying alive in a screwed up economy (thank you, federal government), that accumulates debt for us faster than we can earn the money to pay it… is a challenge, and failure means lots more people on the street, including yours truly.

    My company did maintain a stateside contract manufacturer (made attractive due to the immense dangers of hiring for ourselves), but there were two problems: 1 – Their quality was not as high as overseas. 2 – Their prices were higher than overseas. 3 – Even with shipping delays, they were no faster than overseas. 4 – They did not eagerly fix problems they were responsible for.

    We could have made the choice to give our customers worse products at a higher price… keeping jobs in the US (until we went broke and out of business anyway) but that seems rather stupid.

    The people that fail NEED to fail in actual fact. The world is NOT made a better place by bailing out GM. Sure, it buys votes… and that’s the point. But that makes it just another form of corruption.

    RS

  2. says

    After reading your post and the 1st reply I have to rethink how to reply…
    I was just going to say the most new jobs are going to come from non-Union trades.

    It seems to me the rise in corporate profitabilities across most of the typical stock exchange traded firms recently has been because labor costs are down. Even when the cost of raw materials are up.

    Many of the federally funded “make work” type projects are for the big unions with the biggest overhead for stuff like building roads and other hard to hire into type union positions with big burdens to overcome before those employers hire very many new people. Bullet train… Levee construction… Airport expansion. All good things and may get a few more teamsters out of the union hall but adding jobs for hundreds of thousands of average folks is not going to happen this way.

    So, thank you Mr. Cooke the first half of your article is very good.

    However when I got to “movement must start at the local level, from the bottom up. Local unions and labor councils should …” you lost me. The multitude of out of work Americans are not part of any “labor council” to start with.

    We may have a new high as the standard for unemployment levels. But in the new America we have an era of hyper-competition. A college degree means little. What you do with whatever you got means everything. Being industrious does not mean leave it to the boss anymore.

    We are not going to run into the town square and demand Jobs. (Egypt’s events will not happen here in USA)

    This an era of hyper-competition is exacerbated by what Mr. Spearmann says above.

    Good help us all to keep our jobs and prosper.

    IMHO

  3. Spearmann says

    I don’t see this piece as especially thoughtful… quoting economists that don’t say anything about economics (instead acting in the full capacity of their OTHER job, leftist politician).

    Take for example this idea of a “jobs recession”. There is no such thing.

    The economy is in a recession, or it’s not. Further, there is no such “thing” as a “job”. A job is just a unit of work. Like a gallon, when considering milk. There is no such thing as a “gallon”. You can’t grab one. You can’t see one. It is conceptual only.

    Work, on the other hand, is all around us… but much of it is killed off or sent over seas. How do I know this? Because I’ve done it. I have sent dozens of jobs overseas, and I can tell you EXACTLY why I did it.

    1 – Threats from employees. Employees can (and do) bring suit against companies for things that are almost impossible to defend… charges of racism, sexism, harassment, hostile work place, unsubstantiated or not, are HUGE hammers that just the THREAT of use can bring small companies to their knees.

    To reduce the chance of such charges, it is safer to sent the jobs overseas.

    2 – Threats from local, state, and federal government… massive volumes of workplace rules, where common sense no longer has ANY bearing… constantly growing, constantly changing… employees must be hired FULL TIME to wade through and stay abreast of this bloated effort. Because the rules make sense? No. Sometimes they do, other times, they don’t. Usually they don’t.

    To reduce the chances of being broad-sided by violations hidden deep within the many sources of work rules, from terms of employment, hiring, firing, safety, benefits, building code, emergency procedures, environmental impact, and on and on and on… it is far easier and cheaper to send the jobs overseas.

    3 – Pay: wage laws, unions, and state and federal regulations reach deeply into the ability of people to come to agreements between each other with respect to the structure of the work and compensation. Work hours, break periods, wage limits, worker status, tax collection, pay and tax records retention, etc. etc. etc…. whatever happened to just coming to work on time to do what you agreed to do?

    To reduce the burdens of the pay regulations and tax systems, not to mention the inflated wages of a minimum wage society… it is vastly cheaper and simpler to send jobs to countries where it is all cheaper and easier to administer.

    Employees are a MASSIVE liability to any company… especially the unskilled workers… because they don’t do anything that workers anywhere else in the word can’t do with ease.

    We keep our highly skilled workers… the designers, engineers, managers… but the common worker comes with all of the liabilities, and nothing special or unique when compared to workers in the pacific rim.

    Is it a hassle to do all of this across an ocean. Yep. But because the problems imposed on trying to do work in the US are so massive due to laws, agencies and regulations (the vast bulk of which are either heavy handed or too idiotic to believe), other countries are stepping up to the plate and are saying: “Please sir, we can help you with all of this… let us show you what we can do, for much less than you are paying now.”

    And by god, they can do what they say.

    In the end, creating and growing and trading all comes down to delivering something at an agreed price. That’s all. Nothing more.

    We make it hard here. Very, very hard.

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