Last Friday’s job report (May 3, 1012)
raised serious doubt about whether or if current strategies to put people back
to work make sense. Wall Street baron,
Mohamed El-Erian, CEO of PIMCO, a global investment management firm with
approximately $1.77 trillion of assets under management
wrote the next day in the Financial Times
“Friday’s jobs data
sounds a warning that should be heard well beyond economists and market
watchers. With just 115,000 new jobs in
April, the U. S. economy is not creating enough employment to make a dent in
the 12.5 jobless Americans in the labour force, of which a stunning 5.1 million
are long term unemployed. Moreover, the disappointing monthly number managed to
fall short of analysts’ massively subdued expectation of 160,000, highlights yet again the unusual sluggishness of the labour
market.”
Catherine Rampell, editor of the Economix blog At the New
York Times pointed out that same day:
"the share
of working-age Americans who are in the labor force, meaning they are either
working or actively looking for a job, is now at its lowest level since 1981 —
when far fewer women were doing paid work. The share of men taking part in the
labor force fell in April to 70 percent, the lowest figure since the Labor
Department began collecting these data in 1948."
The
jackpot question is the disconnect between the predicament of millions of jobless people and the answers
being given—often with fanatical enthusiasm—by civic and political leaders across
the country. In
Silicon Valley more than one hundred thousand are unemployed in spite of
its booming tech sector. The California Summit later this week is pushing for “smart
regulation, a smart workforce, smart innovation and smart capital.” The local NOVA Manpower agency calls its
strategy “Economic and Workforce Implications in the Age of
Ipads, Android Apps and the Social Web.”
The focus is on up-grading the skills of the already up-graded.
And the one hundred
thousand? The other 3 million in California?
The other nine million around the country? In light of the new jobless data the plain fact is that without manufacturing there is nothing for fat too many people. Creating tech assembly plants in Cleveland, Newark, Detroit, Youngstown and Silicon Valley could generate tens of thousands of jobs. The target should be to bring 20 percent of the jobs off-shored to China back to their own country of origin, the USA.
The Wall Street driven optimism about the next technological fix is blotting many
working people out of the picture. Commentator Edward Luce describes
the Silicon Valley mania in a nut shell.
Vince Khosla—who founded Sun Microsystems—sees the Silicon Valley as the
story of the world as a series of disruptive technologies that were dreamed up
by the bold and brainy. “The future is not set. It belongs to those with the
bravest imagination.” [in Time
to Start Thinking, Atlantic Monthly Press, 2012]
We’ve been on this
asteroid before. Back in the 1980s when U.S. Central
banks saw larger profits could be had in Japanese, Korean and Brazilian
steel-making, they pulled their investments from the great manufacturing
centers in the Midwest and West and turned
them into a rust belt. Unemployed
workers were told to get training and prepare themselves to work in the new
service economy (where the pay was usually below a Living Wage.) It never happened.
U. S. companies willingly went along with this
new plan for “financializing” profits instead of manufacturing products. Silicon
Valley has outsourced at least 1.2 million of those kinds of jobs to China and
other Asian locales.
The same dynamic is in play again. It is very clear now that high unemployment appears both chronic and permanent, and the
solutions proffered are to upgrade the skills of the already upgraded.
Paul Krugman:
“Consider, if you will, the current state of our
nation. Despite hints of economic progress, we’re still in the midst of an
immense disaster, in which unemployment and underemployment are devastating
millions of American lives. And none of this need be happening! There has been
no plague of locusts; we have not lost our technological know-how. Americans
should be richer, not poorer, than they were five years ago. Yet economic
policy across the board has become almost passive, has essentially accepted
this disaster instead of trying to end it.” [New York Times, April 29, 2012]
As this blog has noted
before, we’re following a real theology here. This permanent downturn for the American people is rationalized as a function of God’s natural law! It's the Divine Will that you should be out of work!
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