A lot of congressional politicians and media pundits of both Republican and Democratic persuasion are jabbering these days about “job creation.” The 2014 mid-term elections are fast approaching and nobody wants to be caught looking indifferent to the lack of jobs for an increasingly large numbers of Americans.
Their approaches are different, of course. The Democrats want more ‘stimulus’ to “grow the economy” by restoring government spending and infrastructure investment. The Republicans, as usual want to cut even more taxes on business and the wealthy than ever, despite already record low taxes and swollen corporate coffers. They would “encourage investment” in economic growth to “create jobs.” But despite the obvious cruelty of actions such as cutting food stamps – a program benefiting more working age recipients than ever before – and failing to extend unemployment benefits when jobs are so hard to come by, neither wing of the ‘republican/democrat’ Corporate Party gets the basic facts of a changing economy nor wants to face them if they do understand the situation.
The entire history of the industrial era has involved forcing people off their lands and into a vast pool of “free labor” to be tapped by growing industry as needed, then forcing them out of their jobs by outsourcing capital to cheaper labor markets. The whole time, investment in growth has included technical innovations that increase production while reducing the labor required for a given level of production. Only the slave holders of the South wanted to retain a labor-intensive method of agricultural production – the labor was free! Government policy all along has been to subsidize increased productivity and to supply the kinds of labor needed.
After World War II, the G.I. Bill allowed returning vets to get a college education that would open employment for them in a technologically expanding economy. Continuing technological innovation – especially the explosion of computer technology from the 1980s onward – required fewer middle-management jobs and increasingly required smaller numbers of new jobs with highly technical skills in product development for military hardware, medical devices, industrial processes, computer hardware, software, and networks. The labor market bifurcated into 1) high paying upper-management and technically-skilled jobs and 2) low paying unskilled jobs, as manufacturing capital was moved overseas for production with labor at a fraction of the cost that manufacturing labor had been in the U.S. The middle class shrunk accordingly as consumption was increasingly funded by credit-card and mortgage debt. That, of course, rolled into highly leveraged financial “assets” by the Big Banks, led to the 2008 financial collapse.
We now have a labor market which is composed of an increasingly smaller number of very high paying executive positions, well paying technical jobs, fewer and fewer moderately compensated white-collar jobs, very few blue-collar manufacturing jobs at depressed wages. This followed the successful destruction of unions in the U.S. Wage suppression and outsourcing let to an expanding labor market for low to minimum wage dead-end jobs that cannot be outsourced because they involve direct manual labor in the service sector, largely retail clerking, cleaning, building maintenance, etc. – jobs that cannot adequately support a worker no less his/her family.
Despite my thirty-five years in higher education and belief in the importance of education for every citizen in a democracy, I know that more college educated workers in a labor market that does not need them is no solution to the shortage of jobs with a living wage. Nor will technical training programs create the jobs they are meant to fill. Most proposals from politicians to improve access to college education – low-interest student loans, subsidized tuition, loan forgiveness for those who go into teaching, etc. – are good in their own right. But they will not solve the problem of insufficient livable-wage jobs available in the labor market. Too many private training ‘institutes’ or ‘universities’ arrange federally subsidized student loans to pay for training that does not result in jobs for graduates. The problem is not just the lack of educated workers; it runs much deeper than that. The political rhetoric completely misses the real problem.
Labor markets were sustained in the growth economy because expanding production always needed new workers, even when technological innovations reduced the number of workers needed for individual industrial processes. As long as growth could be sustained, debt-based capital infusion into new production increased the total number of new workers needed even though each process needed fewer workers to function. But that is over now. And the end of the growth economy is in fact the beginning of the Great Transformation that politicians are entirely unprepared to deal with, even as it fast approaches.
The accumulation of massive private and public debt is today running up against the enormous accumulation of the waste and damage produced by unfettered economic growth as we approach the end of cheap energy and natural resources. As resource limits and ecological collapse draw near, a Great Transformation is inevitable. What that transformation will look like is a very open question. How it plays out will be up to the ability of humanity to recognize the new planetary reality and to reorganize society and its deployment of technological and social innovation to create a new realism of hope that transcends the illusions of the recent past. Part II of this post will explore where we stand in that quest.