Monthly Archives: June 2010

Rethinking Work and Non-Work in the Recession

For over the last 18 months, the Center for Working-Class Studies has been publishing the “De Facto Unemployment Rate” (DFUR).  The DFUR includes all those who are officially unemployed, those looking for work, the underemployed, disabled or in early retirement, and those receiving government work subsides.  It also estimates those who are in prison or have joined the military because they can’t find work in the private sector. The most recent analysis estimates that the DFUR continues to hover around 30%.

At first, the DFUR did not receive much attention, perhaps because it differs from the typically reported unemployment rate.  But in the last six months, it has been featured in the Manufacturing and Technology News and the Wall Street Journal. More important, the idea of understanding unemployment in broader terms has gained more acceptance as the media has begun to use the Bureau of Labor Statistics’s (BLS) alternative measures of labor underutilization.

In terms of actual job growth, the most recent study by the BLS indicates that almost all employment growth in last six months is due to government jobs, specifically jobs with the U.S. Census. While some have argued that the recession may be over, the lack of private sector job growth indicates that we may be on the brink of another jobless recovery. If the U.S. is to avoid falling back into recession, we must continue to extend unemployment benefits and/or craft another stimulus package.

Yet recent bills to create additional jobs and extend unemployment benefits have met with resistance, and even when such benefits exist, many states make it difficult for those who are out of work to receive any benefits. For example, some states limit benefits for part-timers and those who leave a job for medical reasons or due to the lack of available childcare. A recent study by Economic Policy Institute indicates that less than 67% of the long-term unemployed are receiving benefits.  If unemployment benefits had not been extended, only 35% would have been covered.

The high, persistent unemployment rate suggests a long and very slow economic recovery, and we may, in fact, be entering a “jobless era,” as Don Peck wrote in The Atlantic in March.  But having a job in the current economy doesn’t necessarily protect workers in this recession.  As Jamie Smith Hopkins reported in last week’s Baltimore Sun, 13 percent of employers cut salaries last year, and for many of those workers, their earnings levels may never recover.

But the problems go beyond earnings.  Not only do many workers feel anxiety about keeping their jobs, the quality of work is declining.  The effects of the recession are being exacerbated by changes in the labor market and organization practices based in economic globalization. Trade liberalization, deregulation, privatization, and reduced welfare programs have led to social and economic insecurity, income inequality, weaker unions, reductions in public sector services, and geographical shifts that have resulted in downsizing, restructuring, irregular work hours, electronic monitoring, and the intensification of work.  In turn, these changes have increased job demands, work hours, job insecurity, and control while reducing rewards and social supports making work more precarious.  All of this not only contributes to unemployment in the U.S., it also contributes to work-related stress for those who are still working, as Paul Landsbergis of the Center for Social Epidemiology argued in a recent presentation at the How Class Works Conference.

Increasing levels of job-related stress threaten the health of those who are employed. Landsbergis suggested that while the dramatic deaths and illnesses associated with the “accidents” at the Massy coal mine and BP’s off-shore oil rig get national attention, the insidious influence of job stress increases cardiovascular disease, sickness absence, and acute injuries.  Psychological and musculoskeletal disorders remain under reported, especially among the working class.

Taken together, the DFUR and the impact of economic change on the workplace remind us of the widespread effects of global and national economic trends. We need to think about both the effects of unemployment and the relationship between current economic policies, work practices, individuals, and health in the modern economy. Globalization doesn’t have to cause unemployment or undermine the quality of work.  Government, business, and labor leaders should not wait for an economic recovery to reconsider the impact of globalization on both work and non-work.  Any future economic recovery will be more stable and effective if it not only creates new jobs but also places value on what the International Labor Organization calls decent work for all working people.

John Russo, Center for Working-Class Studies

On Poverty, Policy, and Real People

When the latest report was released last September, the poverty rate in the U.S. stood at 13.2 percent, the highest rate in 11 years.  Given the recession, the increase shouldn’t surprise us, and we’ll probably see higher numbers when the next report is issued in August.  I was surprised that the increase wasn’t more dramatic, but in fact the national poverty rate has hovered between about 10 and 13 percent for most of the past four decades.  While a few percentage points represent a whole lot of people, I was struck by the relative stability of the figures.  Clearly, today’s higher rate of poverty illustrates the effects of the recession.  But if we almost always have more than 10 percent of Americans living in poverty, then it’s clearly a persistent and troublingly-policy-resistant problem.

A conversation with a tour guide and another American tourist on a van in Argentina a few weeks ago got me started thinking about all this.  The tour guide was explaining that her government provides subsidies to families with children, and she was lamenting that some families choose to subsist on those government payments instead of entering the workforce.  The American tourist agreed that this was a problem.  She suggested that the right answer would be to “incentivize” poor people, so they would choose work over idleness.

Underlying the conversation were several assumptions about poverty and the role of government.  The first is that most people are poor because they choose not to work.  I suppose this is true for some, but I’m skeptical that laziness explains most instances of poverty.   According to a 2007 report from the U.S. Census, only 21.5 percent of people in poverty don’t work.  Today, the percentage may be higher, but given the unemployment rate, that’s not surprising, and we can’t read it as evidence of laziness.  Indeed, the New York Times has been running a terrific series on “The New Poor,” presenting stories and analysis of how a complex mix of accident and policies are driving people from the middle and working classes into poverty.  For a good example, read a recent report in the New York Times about how state cuts to child care subsidies are making it impossible for some low-income women to hold on to their jobs.  The women profiled in the story are far from lazy.  They want to work, but they can’t leave their children at home alone and have few options.

Second, we assume that if people are poor, it’s entirely their own fault.  Common wisdom suggests that poor people would be comfortably middle class if only they were smart enough or worked hard enough to take advantage of the opportunities this country offers.  Great myth, but in fact, upward mobility is less common in the U.S. than we’d like to think.  Most Americans remain in the social class in which they grew up.  Poverty is often situational and temporary.  Equally important, as we have noted here previously, the U.S. can expect to see the most job growth over the next few decades in low-income jobs, meaning that increasing numbers of hard-working Americans will also be poor.

A third assumption in that tour van conversation is that government’s role should be to push people to work hard, not support those in need.  Social welfare, the assumption goes, teaches people to depend on the government and thus increases, or at least perpetuates, poverty.  While tracing this correlation can be tricky, a study by Lane Kenworthy, Professor of Sociology and Political Science at the University of Arizona (who also writes for the conservative Cato Institute), found that Germany and Sweden, two European countries with the most generous state welfare programs, experienced lower levels of poverty than other nations.  Such programs don’t eliminate poverty, and the results are uneven across Europe and elsewhere, but they do seem to help more than hurt.  Based on his comparative study of the effects of social welfare programs, Kenworthy concludes that “relatively modest increases in benefit levels for programs that assist nonworking individuals and low-income workers might well be sufficient to bring the U.S. into line with at least a few of the other affluent nations in reducing poverty.”

Of course, we don’t address poverty only through direct supports.  Improvements in education, worker rights, and health care would create better opportunities for people in poverty to achieve economic stability and move toward prosperity, and many people and organizations are working on these issues, here in the U.S. and globally.  Yet such improvements are not only slow to develop, they are also – like most public policy – matters of intense debate.  What does “better education” look like?  What rights should workers have?  Is access to good health care a human right, and if so, how should we pay for it?  As the seemingly endless Congressional and media battles over health care demonstrated, solving the social problems that contribute to poverty is a cumbersome and frustrating process.

Much of the debate comes down to two big questions.  First, does the free market generate good social practices?  In other words, when corporations and business leaders pursue their interests, does that generate sufficient prosperity and opportunity to help the poor and working class?   Second, do we believe that society as a whole has an interest, either moral or economic, in supporting those who are living in poverty? Or do we view economic inequality as either a “natural” condition or a self-inflicted problem that should be left alone, either because we believe we can’t do anything about it or because we believe that those who are poor don’t deserve assistance?

Clearly, neither the American people nor our leaders agree on how to answer these questions, and because those on both sides are passionate and committed to their views, we may never reach consensus.  That means that policy debates will continue to be contested, and most likely, especially given the U.S. system of government (see James Fallows on this), the policies we develop will usually take moderate, often muddled and cautious approaches.

Policy solutions seem elusive, but we should nonetheless think carefully about how we characterize people in poverty.  When we treat them with disdain and suspicion, the result is the sort of demeaning, even dehumanizing legal and bureaucratic practices that Barbara Ehrenreich has been documenting.  Or we can view them as equal human beings, people worthy of not just our sympathy but our assistance and respect.  We can check our judgments and question our assumptions.  And perhaps most important, we can listen to their stories so that we can understand their experiences and perspectives.  When we listen to others, they become human.  They become part of “us,” members of our society whom we cannot so easily brush aside or condemn.

Sherry Linkon, Center for Working-Class Studies