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Not Just Jobs — Good Jobs

by Robert Kuttner

On Labor Day 2010, we are short at least 25 million jobs. And just as importantly, we don’t have enough jobs that pay decently.

The press last week was full of stories that the jobs picture was not as dismal as feared.

The economy is actually generating jobs again — just not enough to make a dent in the backlog of 15 million Americans officially out of work and another 8 million with part time jobs seeking full time ones, and millions more out of the labor force entirely.

In the government’s most recent report, released Friday, officially measured unemployment actually increased to 9.6 percent, just one tenth of a point below its rate last Labor Day.

The stock market rose on reports that we will avert a “double-dip” recession. Economic growth is still in positive territory. But the economy grew at a decent rate after the Great Depression bottomed out in 1933, as well. Nonetheless, unemployment remained stuck in double digits for the next seven years, until World War II.

As in the middle and late 1930s, economic growth is positive — just not strong enough to create sufficient jobs. This, of course, is the lingering fallout from the financial collapse of 2008, just as persistent unemployment in the Depression was the legacy of the Crash of 1929.

But there is a larger story here that predates the recent financial collapse. The economy not only has a scarcity of jobs, but a shortage of good jobs. And while Republicans would resist legislating a serious public jobs program, the administration should fight for one anyway.

And there is plenty that government could do right now to improve jobs pay via executive powers.

One of those powers is government’s role as a contractor. The other is to enforce laws already on the books that prohibit employers from stealing wages and that guarantee workers the right to join or organize unions.

The Obama administration has made some heartening steps in both directions, but it could do a great deal more.

Federal procurement, directly or indirectly, affects about one fourth of the jobs in the economy. In past administrations, government procurement was used as leverage to stop deeply entrenched patterns of racism in hiring and promotion. Before there were the votes in Congress to pass the great civil rights acts of the mid-1960s, Presidents Kennedy and Johnson used executive orders to require corporations bidding on federal contracts to end discriminatory practices.

And during World War II, President Roosevelt’s War Labor Board required that companies with war production contracts have good labor relations — which meant acceptance of unions when workers voted for them.

In the Obama administration, the Labor Department is getting an additional $25 million to better enforce wage and hour laws. And the Vice President’s Task Force on Middle Class Working Families is doing important work, though with a tiny staff.

Obama, early in his term, issued four executive orders that mainly corrected for anti-labor orders by George W. Bush, but these do not take full advantage of the leverage that government has.

Today, President Obama could issue orders requiring that companies bidding on government contracts behave as decent employers. This would be the game-changer.

Unfortunately, companies that are flagrant union-busters, such as Fedex, still get billions in government work.

Corporations that routinely disguise permanent workers as temps or independent contractors, in order to reduce their wages and rights, are still on the approved list.

And contractors in agriculture that pay starvation wages and have appalling working conditions for farm workers still supply food products for the school lunch program and even for the Pentagon’s MREs — Meals Ready to Eat — for America’s service men and women.

The American Prospect has just published a special report on all the things government could be doing — without new legislation — to turn bad jobs into decent ones.

The high rate of joblessness has gotten nearly all the attention. But the declining quality and pay of most jobs is every bit as big a problem.

Wages, adjusted for inflation, have barely risen in three decades, while productivity has doubled. Nearly all of the gains have gone to the very top.

Very high unemployment only exacerbated that trend, because it puts job-seekers into competition with one another for the available work, and undermines any remaining leverage for raises, a word we don’t hear much lately.

Even before the recession started, in the period from 2000 to 2007, only about three percent of the workforce managed to increase their earnings adjusted for inflation.

The long term trend reflects an epic shift in the bargaining power of workers and managers. The causes are multiple.

Unions have been weakened by relentless union-busting by industry, while government has largely failed to enforce worker rights to organize or join unions under the Wagner Act.

Increased trade with countries that pursue predatory trade practices and that recognize no worker rights has undercut wages in the U.S.

Companies that once had tacit social compacts with their stakeholders now feel free to outsource work if someone else will do it cheaper.

Supposedly, education and training is the cure-all. But think about it. Back in the 1950s, when most Americans did not go to college and the average factory worker didn’t finish high school, our income distribution was far more equal and we had a blue-collar middle class.

Today, tens of millions of college graduates are working at jobs that don’t require a college degree. Some professions that require extensive education have had fairly flat earnings over the past decade.

Certainly we need a well educated workforce, but that by itself does not assure decent wages.

In the 1940s, ’50s, and ’60s, median wages and the economy’s average productivity growth moved upwards in lockstep. The income distribution actually became more equal.

That trend had little to do with the fact that workers were becoming better educated — and everything to do with the economy’s “equalizing institutions.” These included an effective labor movement, backed by government’s commitment to enforce worker rights and to expand opportunities.

President Obama is in political trouble today because people are anxious about both their jobs and their paychecks. He could help himself and all working Americans by moving more boldly on both fronts.

This article was originally published at the Huffington Post

Robert Kuttner’s new book is A Presidency in Peril. He is co-editor of The American Prospect and a Senior Fellow at Demos.

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