Joblessness: A Chronic Drag On The Economy And Social Stability (Demo)

Every month we get a dose of news about whether the number of new jobs met expectations. The latest news told how America added 148,000 jobs in September — nowhere near the 180,000 expected and well below what we need to replace the millions of jobs lost in the Great Recession.

This focus on predictions distracts from the much more important and troubling story in the official jobs data.

The long-term prognosis is that America does not have — and is not going have — enough jobs for everyone who wants work, at least not under current government policies. Moreover, most of the jobs that have been created during the so-called recovery are low-paying positions, many of them part time with no benefits. These two trends pose major challenges to social stability, long-term economic growth and eventually levels of crime.

A chronic, long-term drag

To be sure, there will be more jobs in the years ahead but not enough to keep up with population growth. Since 2000 the resident population has grown eight times as fast as the number of jobs, a trend illustrated in the graphic accompanying this column (see below).

The employment-to-population ratio has fallen, and it’s not headed back up. To restore the ratio to its prerecession level, the United States would need 9 million more jobs today.

The country needs about 90,000 more jobs each month just to keep up with population growth. That means in September, just 58,000 of the new jobs helped reduce the job shortfall. At that rate, it would take almost 13 years just to get back to prerecession levels, which says that the job shortage is a chronic, long-term drag on the economy and the human spirit.

Average wages rose 2.1 percent over the prior year, but that is misleading because higher pay tends to be for the better-paid jobs. For millions of Americans, wages in real terms are flat to falling — a trend that mirrors the decline in union membership among private-sector workers since 1973. The real median wage has been stuck in a narrow range just above $500 per week since 1999. One in three U.S. workers — more than 50 million people — makes less than $15,000 per year, which is not enough to make ends meet.

Automation and offshoring

But this depressing truth raises several questions: What happens to a society where working two full-time jobs still leaves a person mired in or on the edge of poverty? How will society bear the costs of workers who become disabled because of lack of health care and are forced to become drains on the state instead of sources of revenue? What happens to social stability when there are not enough jobs for all who need work? How much will a scarcity of jobs erode the work ethic? How much will long-term economic growth be damaged by a lack of well-paying jobs — or any jobs at all?

The harsh reality is that today we can produce much more with far less labor. Not only is more work moving offshore; more work is being performed by machines, a form of capital.

The long-term trend is clear in Census data. About 90 percent of Americans were tied to farms in 1790. That fell to 41 percent by the 1900 census. It now hovers just above 1 percent of the population.

Manufacturing is going the same way as agriculture. It takes fewer hours to build a car now than in the past. Much of the work is done by robots. Even hotel chambermaids are at risk from automated vacuum cleaners.

In fact, any job that can be performed on a computer — engineering, tax-return preparation, financial services — may become automated or move to lower-paid locations that, while halfway around the globe, are only a fraction of a second away.

Although America’s employment crisis is grave, there are solutions available that are much less costly than ignoring the problem. We will examine some of them in future columns.

David Cay Johnston’s new column is a breath of fresh air to me as an advocate for economic justice and broadened private sector ownership of wealth-creating, income-producing productive capital assets. His analysis of the causes of joblessness and the impact that it will continue to have is right on. Unless we acknowledge and address the reality that tectonic shifts in the technologies of production are destroying jobs and devaluing the worth of labor, we will not be able to see the solutions necessary to create economic growth and simultaneously broaden productive capital ownership so that EVERY American can begin to build a income-producing capital estate as a second source of income as the economy expands to support general affluence for EVERY American, and creates a short-term situation where job opportunities will expand as well.

I look forward to Mr. Johnston’s future columns where he promises to examine solutions. As I have commented numerous times on his writings with criticism that he fails to focus on solutions that would expand individual ownership shares in the productive capital assets of our corporations, perhaps he will write about the Just Third Way movement and the proposed Capital Homestead Act which provides solutions that will put America back on a path to prosperity, opportunity, and economic justice.

Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice

Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm. See the full Act at http://cesj.org/homestead/strategies/national/cha-full.pdf

http://america.aljazeera.com/articles/2013/10/25/jobs-numbers-unemploymenteconomicgrowth.html