[Update: I wrote this right before bed last night, and I thought of a couple of things I wanted to add to this post this morning. Rather than write a whole new post, I decided to just put them in brackets.]
The last post pertained to a comment I made on a friend’s post back on the ‘book. That comment got a reply from a friend of mine that I cannot resist responding to here, because it is for this exact purpose that I started this blog in the first place. One of the larger problems with Facebook is that it allows for a kind of immediate back and forth that, while immensely gratifying, and good for quickly generating a discussion, it can sometimes constrain deeper considerations. The other thing is that, on Facebook, its all very personal. I don’t want to say “Hey, I have really serious problems with your view of economics” in the same place I’m going to say “Hey, I really appreciate this picture of your family, and I can’t wait to see you all soon.” Because I really do want to see them all, and enjoy their company, and we can all just skip the politics and economic history that day – spending time with the people you care about is sometimes more important than nuanced policy discussion.
On the other hand, that day is sometime in the future, and this is my blog, where I get to discuss the stuff I want to discuss, in the way I want to discuss it. So I’m going to go ahead and say what I think about some stuff that happened on ye olde ‘book, but I’ll leave out the names. If folks want to respond here, that’s fine, or they can respond somewhere else, or not at all, or whatever.
So, the basic idea behind my last post was that the Federal Government, if it wanted to, could think up useful things for folks to do, and then pay them to do those things. It would, of course, have to decide that the democratic way, where legislators get together and vote to do all that, which is unlikely, because paying people would mean either raising taxes or by taking on debt, and those are both extremely unpopular with voters. And you would also need an executive branch willing to carry out such a program, and a judiciary willing not declare such a program unconstitutional when the inevitable backlash from private business takes the Federal government to court. Back when FDR launched the National Recovery Administration, during his first term as President, this is precisely what happened – the Supreme Court ruled that the NRA was unconstitutional, with Justice Brandeis declaring that the era of centralization was over! But I wasn’t trying to lay out any sort of serious program, I was just writing for the sheer joy of not being totally pessimistic for a little while.
Meanwhile, back on the ‘book, this friend of mine (who, I can assure you, will be totally, utterly unconvinced by everything I’m about to say, regardless of evidence or logic, because he will never accept the idea that the government should be allowed to make decisions contradicting the interests of private businesses, since to do so would violate the principle of individual liberty) [Does that seem harsh? Keep in mind he would likely dismiss what follows as a Marxist rant, and he wouldn’t be wrong.] comes in with the Mike Rowe argument. This is basically an argument for structural unemployment (and if you’re interested, here’s Dean Baker debunking that argument) – the idea that there is a mismatch between the skills currently possessed by the workforce, and the jobs currently available on the market. Krugman has blogged about this as “humbug” for years. Mike Rowe is an entertainer, and he has a show called “Dirty Jobs” where he propagates the myth that we just need to have greater respect for difficult, physical jobs that don’t necessarily require college degrees. Personally, I would like to see Rowe try being a truck stop stripper, like a couple of reporters from Vice did, and made a documentary about. Now that is a dirty job. But you won’t see Mike Rowe stripping for truckers, because that’s demeaning. And his whole image is caught up in the idea of the noble blue collar worker.
Mike Rowe makes a television program, and people watch it, because they like watching a guy present the idea of the noble blue collar worker. And that’s fine. He has a foundation that helps retrain people, and that’s fine too. But it is not a solution to unemployment, or the indignities of inadequate compensation. It’s a solution to the guilt upper-middle class people feel when they hear about their blue collar cousins losing their jobs, or having to work dead end service jobs for minimum wage without benefits. They want to help, they want their friends to have dignity in work, and health benefits and so on. They just don’t want to rock the boat to do it.
To understand why this is the case, one might consider an essay by Polish economist Michael Kalecki written in 1943. “The reasons for the opposition of the ‘industrial leaders’ to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment.” This is still more or less the situation today. If people could just vote for a government that would enact full employment policy, business leaders would lose their position of power and influence in society. And they aren’t especially interested in that, so they do whatever they can to prevent it. In Europe Union, this is actually a central part of the problem – as Yanis Varoufakis writes in an article published a few days ago “although European countries remained democratic, the EU institutions, where sovereignty over crucial decisions was transferred, have remained democracy-free. As Margaret Thatcher explained during her last Parliamentary appearance as British Prime Minister, who controls money and interest rates controls the politics of Europe.”
[This is not to say that there isn’t some validity to the observation that there has been a notable decline in blue collar jobs over the last 30 years. Let’s look at some charts!
In this first chart, you can see clearly that there has been a decline in manufacturing employment over the last 30 years. I added construction and government employment for comparison – note that while both have risen modestly, so has the total population. Moreover, note that the Obama administration did not create a huge new raft of government jobs. If anything, the last 8 years have seen a slight depression in government employment. But the point is that the manufacturing sector has seen considerable job loss in the last 30 years.
Our second chart looks at median incomes in the same time period. This is median income for all employment in the US, adjusted for inflation. Please note that it tops out at the end of the ’90s before hitting a choppy decline. So we can say that that, as blue collar jobs have declined, so too has income for many of those workers.
Our third chart shows the wage share of GDP, which has fallen steadily since 1970. If you work for a living, your share of the economy has been in decline for over 40 years. Does this mean that we need, as Mike Rowe suggests, more respect for blue collar workers? No! It means we ought to pay them more. Can the government implement policy to that effect? Yes! It can! But it hasn’t.
Lastly, I wanted to throw in this delightful chart from a Jacobin article written by a former professor of mine, JW Mason. Notice how the labor force participation rate seems to want to readjust to a level similar to that of 1999 levels. Why is that? My theory is that its because that’s closer to a level Americans are comfortable with, i.e. they feel like the economy is too big. We (and I use that word advisedly) want to go back to a simpler time, when there weren’t as many immigrants.]
Besides all that, my friend mentions the role of private funding in the arts. I see that role traipsing across the stage at Chicago’s Lyric Opera, and in the pages of their programs, with their long lists of generous donors. And I’m all down with people supporting the arts. But the thing is that public funding is actually way more important than the private donations supporting individual programs. Public K-12 schools have seen arts funding cut over the last 20 years, and although the present financial outlook for public arts funding is “modestly positive,” according to a 2014 report from Grantsmakers in the Arts it is worth noting that, should the Federal budget become smaller (Hello, Paul Ryan!) , this would have a direct impact on arts and arts education.
Another friend, who also got into the discussion, and made a comment that he is surprised to find himself to my left (I’m as surprised as he is?), suggested the possibility of modest tax reforms and an expansion of Civilian Conservation Corps style programs. Which seem pretty realistic – but again, I wasn’t being realistic at all. I don’t think the government will actually make a list of useful work that needs to get done, and then pay people to do that work. Its not what voters want. What voters seem to want right now is something that looks and sounds like Donald Trump, whatever that means.