Shortage of Jobs and Equality, Not Skills, at Heart of Unemployment Crisis
Jun 21, 2011
By Roger Bybee
When it comes to jobs, Republicans and the Right unfailingly roll out the same solution no matter what the economic situation nor how many times it has failed: more tax cuts for the Job Creators in Corporate America and the investor class.
The Democrats, for their part, have also tended to promote the same mantra on unemployment without regard to the lack of job opportunities or how serious America’s job shortage has become.
Unemployment is back over 9 percent again and we risk falling into another recession, much as the United States did when President Roosevelt prematurely pulled back on stimulus and job-creation programs in 1937.
In particular, President Obama and the congressional Democrats have relentlessly focused on the need for greater educational attainment and skills re-training for those with new college diplomas or community college certificates. But this solution fails to address the lack of job openings that new graduates are already facing.
THE PROBLEM IS JOBS, NOT LACK OF SKILLS
The fundamental problems are jobs and inequality, not the lack of skills among the workforce. Workers are essentially losing at a game of musical chairs where jobs are disappearing and not being replaced.
When displaced workers successfully complete retraining programs, they are generally unable to find jobs comparable in pay and benefits to the ones they lost. "Out of a hundred laid-off workers," says New York Times economics writer Louis Uchitelle in his book The Disposable American: Layoffs and Their Consequences, "27 are making their old salary again, or more, and 73 are making less, or not working at all."
To be clear, defending public education is a crucial stance because of growing corporate and Republican resistance to tax revenues for crucial social investments in public education.
But it can also be a cynical means for the Democrats to sidestep a head-on collision with corporations over their failure to generate jobs in America despite record profits, record surplus cash ($1.9 trillion on hand), and record CEO pay. As Corporate America shipped more and more jobs overseas, employment growth in the US was under 1 percent from 1999 to 2009.
Meanwhile, public education systems are being looted from Wisconsin to Texas to Florida to finance tax breaks for the richest 1 percent, as well as to fund failed experiments in privatized “choice” schools as in the Badger State.
As one of the crucial pillars of a democratic society where kids learn the information and skills to become effective citizens, public education needs a vigorous, all-out defense as never before. It doesn’t help that the frontal assault of the Right on public education has been accompanied by the side-swiping of public education by Obama’s Education Secretary Arne Duncan and other elitist “reformers” who have targeted teachers as the key source of the education system’s problems.
But too many Democrats have allowed public education programs to become their entire jobs strategy. Yes, it is imperative that every child is entitled to the same high-quality public education.
Yes, we need to make higher education affordable once again for working-class and poor kids. Yes, we need life-long learning for people to continually gain new skills, both for personal growth and in response to a changing economy.
ECONOMIC CRISIS WON'T BE SOLVED BY MORE EDUCATION
But we must be clear: our current economic difficulties are not the product of a lack of education among American workers. As Jacob Hacker and Paul Pierson point out in their superb book Winner-Take-All Politics, the problem is not “skill-based technological change.” Instead, the fundamental crisis is the pervasive inequality and lack of middle-class jobs that is accelerating in American society.
Hacker and Pierson point out a startling indicator of how profoundly unequal America has become:
…There is more inequality among workers with the same level of skills (measured byage, education and literacy) in the United States than there is among all workers in some of the more equal rich nations.
A new study by the Economic Policy Institute reflects the declining value of college diplomas in the face of a glutted labor market:
there was a very large increase in underemployment even among workers with a bachelor’s degree or more education, growing from 3.9% in December 2007 to 8.4% in March 2011. In fact, the percentage increase in this underemployment rate was greater for workers with a bachelor’s degree or more than for all other education categories.
New York Times columnist and Nobel laureate Paul Krugman has shattered the myth that more education will generate more jobs and a stronger economy as long as we have the present structures of inequality in place. Instead of drawing a sharp distinction between those with college degrees and those without, Krugman argues that the real fault line is between white-collar workers on the one hand and "oligarchs" on the other:
Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004….
So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that…being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent.
No, that's not a misprint. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.
At this moment, we need Democrats to aggressively fight for public education as it is being looted and plundered to fund yet more tax breaks for those who need the money least.
But we also need Democrats who are willing to take on the structures of inequality holding up the oligarchs who continue to destroy US jobs.