Enormous productive potential being wasted as unemployment creeps higher

The Bureau of Labor Statistics released their June employment report today, and almost all of the findings recorded in the report were awful. Unemployment is up to 9.2 percent, more than 0.4 percent higher than it was two months ago. This puts the total number of unemployed people — a term which only includes those who are actually looking for jobs — at 14.1 million. An additional 8.6 million people are underemployed, working part-time because no full-time work can be found.

The reaction to the report — at least in the mainstream outlets — has been predictably narrow. Article after article has been published speculating on the impact it will have for a presidential election which takes place 17 months from now. This speculation, in addition to being totally without merit as Nate Silver explains over at Five Thirty Eight, demonstrates the completely misguided way that political commentators typically handle these kinds of reports. Either out of laziness or a lack of creativity, the slant taken on news of this sort almost always involves discussing its relevance to some forthcoming election, even ones so far out as to make the commentary border on the absurd.

More substantive analysis would ask the questions that really matter. What does long-term unemployment actually mean for those who are made to endure it? What impact does it have on a family when one or both of the parents cannot find a job? In short, how much suffering does this massive amount of unemployment and underemployment impart on the people in the country?

About the only reprieve from the endless horse race analysis — analysis that crops up even when a horse race is not present — is Ezra Klein’s blog over at the Washington Post. Filling in for him today, Dylan Matthews highlights the significance of unemployment, pointing to two studies which show the permanent negative effects of unemployment on a person’s long-term income and health. It suffices to say that unemployment’s actual significance lies not in its effects on polling, but in the ways it wreaks havoc on the country.

In addition to the long-term health and income losses it imposes on individuals, large-scale unemployment and underemployment results in an enormous waste of productive potential. Imagine what 14.1 million people working every day could produce, and what 8.6 million people working full-time instead of part-time could produce. With that labor, we could be building high-speed rail lines, wind turbines, and repairing existing infrastructure. That of course is just to name a few possibilities. However, instead of utilizing this massive labor force, the present economy is preventing it from being tapped at all, at least in the private sector.

With unemployment increasing, the highest levels of income and wealth inequality on record, and decades of total wage stagnation for the bottom 90 percent, it becomes harder and harder to take seriously efforts to preserve American-style capitalism. When large swaths of the population are forced to remain idle because the private sector cannot conceive of ways to make them profitable, we need some other way to put them to work. Perhaps a public jobs program like the Works Project Administration — an approach Paul Krugman has endorsed — is something that should be seriously considered.

Whether it is a new WPA or something else, inaction on the issue of unemployment should be totally out of the question. But instead of working overtime to address the unemployment problem, the political apparatus of this country has been hooked into a months long bit of political theatre centering around the debt ceiling. Once that theatre concludes in early August, even worse theatre will start to kick into high gear surrounding the upcoming presidential election.

These misplaced political priorities are fairly normal for the circus that is the federal government, and in some cases the theatre they generate is harmless and amusing. The lack of action on unemployment is not such a case. In a more level-headed political atmosphere, Obama and the national Republicans would be completely embarrassed about the productive potential high unemployment is leaving untapped. But in this political climate, almost no one seems to care.

Good labor news for once: Connecticut mandates paid sick days

Connecticut Governor Dannel Malloy announced Tuesday that he had signed into law a bill which requires employers to provide paid sick days to their workers. The bill is the first of its kind in the country. Under the new rules, firms with 50 or more employees are required to provide their workers one hour of paid sick time for every 40 hours worked, up to 40 paid sick hours a year.

Along with Vermont’s single payer healthcare bill, this bill is one of the few bright spots in what has otherwise been a brutal year for poor and working people. Providing paid sick days to all workers has so many far reaching benefits that at least 21 nations already legally require it.

In addition to being fundamentally humane and moral, paid sick days decrease the spread of contagious illnesses. Workers who cannot afford to take time off when they are sick end up going into work despite being ill, potentially infecting those whom they interact with at their jobs. As the Economic Policy Institute points out, highly paid workers are typically already provided paid sick days, and so this bill will have more significant impacts for low-income employees. Ellen Bravo of Family Values @ Work makes the point that it is precisely these kinds of low-income workers — restaurant workers, service workers, and child-care providers — who interact with the public the most, making paid sick days a universal benefit for all of us who can now avoid catching whatever they might have.

As with all worker-friendly improvements — even those as seemingly uncontroversial as this one — business groups claim it will spell doom and gloom for the economy. According to Bridgeport News, the Connecticut Business and Industry Association lobbied against the bill, saying that it would “further hurt the economy and drive away business.” Joe Brennan, a lobbyist for the group, is quoted in the Associated Press story forecasting a coming dystopian world of mandated vacation time and work breaks.

Indeed, what a horror that would be. If Brennan is right, Connecticut’s support for paid sick days may have put it on the precipice of a slippery slope to the humane working conditions already standard across Western Europe.

In addition to Brennan’s unintentionally self-parodying comments, the familiar, less humorous set of business objections were also raised. As mentioned above, the threat of businesses fleeing from the state to escape the burden of providing minimally humane working conditions has been floated out. The bogeyman of higher prices to accommodate the paid sick days was highlighted in the MarketWatch article about the change. The article also featured Heritage Foundation talking points saying that ultimately workers would be forced to pay for the sick days in lost future raises — you know, those raises that fast food workers are always getting.

These lines of rhetoric of course are predictable. The race to the bottom logic so pervades our present political discourse that anyone paying close attention could probably tell you what the business opposition to any given set of worker-friendly initiatives is. But this is nothing new. The history of labor in the United States has been saturated with industry objections to positive worker treatment from the very beginning. As Philip Dray records in his book There is Power in a Union, identical objections about economic destruction were made against the now-celebrated movements to shorten the workday, improve workplace safety, and provide minimal wages.

Initiatives tagged as business-destroying and burdensome share a history with all the great workplace improvements of the last two centuries. Connecticut’s mandatory sick pay initiative is the newest member of that club, and hopefully many more like it — perhaps with identical bills in other states — will soon follow.

The absurd framing of the Boeing labor dispute

The National Labor Relations Board ruled in April that Boeing’s decision to locate a plant in South Carolina was a form of illegal retaliation against union workers in Washington. Immediately after the decision of the board, opponents of organized labor began working to manufacture outrage at this clear cut enforcement of labor law.

The National Labor Relations Act grants workers the right to form labor unions, and the right to “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” It forbids employer retaliation for exercising these rights, and specifically forbids hiring practices that seek to discourage membership in labor organizations.

When Boeing CEO Jim Albaugh remarked in March that the “overriding factor” in his decision to expand into South Carolina “was that [Boeing] can’t afford to have a work stoppage every three years,” he was acting illegally. Remarking that production is being located in South Carolina in response to previous strikes is about as clear an instance of retaliation that you will ever find.

In fact, what is most surprising in this case is not that the NLRB made the decision that it did, but that Albaugh publicly revealed that union avoidance was the primary motivation of his decision. There is no doubt that firms silently violate labor laws often by relocating to punish union activity, but rarely are they bold enough to admit it.

Instead of discussing the legality or legitimacy of management retaliation — which is what the NLRB ruling is actually about — somehow the issue has been framed as one about the right of firms to build where they would like. The usual camp of perennial labor opponents charged that the NLRB was out of control, trying do destroy jobs, and mimicking Soviet-style central planning.

Tim Pawlenty put forward the clearest articulation of that spin, remarking that “a federal agency telling an American business in a supposedly free market that it can’t grow a business or start a business in another state is one of the most outrageous things I have seen.” That of course would be outrageous if that is what the NLRB actually ruled. On the other hand, telling a business that it cannot retaliate against workers exercising legally protected rights is not outrageous at all.

This kind of misleading framing is normal politics though, and there is extra incentive to lay it on thick as Republican presidential candidates are vying for an endorsement from South Carolina Governor Nikki Haley in that important primary state.

That opponents of organized labor would try to spin and disrupt a clear cut case of labor law violations is not surprising, but the total lack of any spirited response is, well, not surprising either. Barack Obama — in his typical center-right manner — declined to comment on the particular case, saying instead that “as a general proposition, companies need to have the freedom to relocate.” He followed that proclamation with a broad statement about the harmful effects of labor-management conflict.

Teamsters’ reformer Sandy Pope gives a decent defense of the NLRB action, one that others would be wise to copy. However, even Pope’s defense falters a bit in the deeper debate about the importance of preventing retaliation, getting bogged down in the distracting rhetoric of job creation which this case has nothing to do with.

These kinds of weak responses allow the issue to continue to be framed as a matter of the NLRB preventing businesses from opening up shop wherever they would like. Unless labor supporters are able to correct the framing of the issue as one of retaliation — which is after all what the case is actually about — the opponents of organized labor will score at least a public relations victory out of an otherwise very legitimate NLRB action.