Tuesday, September 21, 2010

Is Paying 10 Million People Not to Work Really a Good Idea?

Paying 10 million unemployed to be unproductive makes no sense for society or for the unemployed. There is much to be done, it just isn't paid. It's called The End of (Paying) Work.


Welcome to The End of (Paying) Work, when unemployment checks are mailed out to 10 million people so they can be unproductive and lose their job skills and habits.


Some economists such as Kenneth R. Beauchemin (senior research economist at the Federal Reserve Bank of Cleveland) are claiming that this "recovery" is consistent with previous post-1983 recessions.


I would suggest that looking at selected data from carefully selected timeframes can yield the conclusion you sought from the start, i.e. confirmation bias. I would also suggest that these economists step into the real world of corporate America and U.S. small business for a real-world lesson on employment trends.


Corporate America is not even halfway through downsizing. Anyone who thinks hiring is about to explode higher is not just in an ivory tower, they are wearing blinders and earphones in the dark cellar of the ivory tower. This is the story in much of corporate America: divisions are being consolidated, closed or sold, support staff are being laid off and replaced by temps, travel budgets are being trimmed further, etc. etc. etc.


Small business is hanging on by a thread. OK, so Twitter went from 200 employees to 250--whoopie. As I have often noted here, you have to be insane to add employees in this environment. Remaining employees are working longer and harder.


The solution? Require all unemployed drawing benefits to sign up for unpaid work at a non-profit, church, temple, city agencies desperate for volunteers, etc. The fiction is that the unemployed are devoting 40 hours a week to looking for work. Since there are so few job openings out there, it doesn't take more than a few minutes a day to look for what doesn't exist (paying work).


Being out of a productive work environment is a disaster for the unemployed; their confidence sinks, their job skills and habits deteriorate, and they are unlikely to find circumstances which offer new on-the-job skills and training.


Lacking a productive work environment, the unemployed have not just lost an opportunity to contribute--the foundation of self-worth and confidence--they have lost the comradeship of working with others.


While many have enjoyed the "vacation" from work for a time, a year or more out of the workplace is generally a disaster for the individual who hasn't launched an enterprise to replace paid employment with their own profitable livelihood (no easy hat-trick in this economy).


As noted yesterday, the standard-issue ideologies are incapable of grasping the inconvenient realities of The End of (Paid) Work. "Progressives" are horrified by the prospect that some duty or obligation to serve the community/nation would be expected of the unemployed; the "progressive" agenda is always what is being given for "free" and what benefits are "rights" and entitlements. Duty and obligation do not really exist in the "progressive" politics of experience except as lip service.


"Conservatives" cannot grasp that the U.S. economy has spiraled into the black hole of surplus production (over-capacity), over-indebtedness and thus surplus labor: the endgame foreseen by Marx but staved off for decades by globalization, the transformation of the home economy into a Plantation Economy supported by debt-serfs (two poorly understood phenomena I describe in Survival+) and the financialization of the U.S. economy into a state of profound debt-dependency akin to a junkie addicted to smack (with the mercantilist nations and global bankers being the pushers).


Thus we have "conservative" commentators claiming that unemployment would magically fall 50% once we stop sending out unemployment checks. Uh, right. These pundits really need to get out in the real world once in a while.


There are no jobs because nobody's dumb enough to be hiring in an economy which has far too much over-capacity, no appetite for more debt and no demand from consumers who already own everything under the sun.


Slashing unemployment would certainly motivate people, but the net result would not be happy campers magically finding millions of new jobs; campfires in the town square and explosive resentment would be the likely results of the "conservative" pundit's ideological fantasy.


I have addressed The End of (Paying) Work many times:


End of Work, End of Affluence (December 5, 2008)


End of Work, End of Affluence I: Cascading Job Losses (December 8, 2008)


End of Work, End of Affluence III: The Rise of Informal Businesses (December 10, 2008)


Endgame 3: The End of (Paying) Work (January 21, 2009)


Having worked in the non-profit sector for awhile 20 years ago, and having volunteered for a "faith-based" organization for many years in my youth, I can attest to the crying need for workers in this country. There are tens of thousands of worthy non-profits doing good in their communities, and most are under-funded/in danger of closing (not all are worthy of survival, of course; duplication and mismanagement are rife).


As cities face the consequences of unsustainable pay, benefits and pensions promised to their employees in the past, they have one choice: lay off staff. About 80% of the costs of government are payroll-related, so reducing payroll and pension payments are the only way to make a dent in monumental local-government deficits.


That means smart cities will be turning to their own unemployed citizens as a resource.


For those drawing unemployment, being productive is much healthier than degenerating at home. Non-profits need the same work done as corporate America--marketing, supervision, recruiting, etc., not to mention the actual work performed by the non-profit: repairing bicycles, teaching construction skills, remedial education, counseling at-risk families, etc. etc. etc.


One of my unpaid "jobs" is picking up litter around my block. It is a service to the community, as are the flowers I tend for public enjoyment. There is a lot of satisfaction in these simple tasks; they are not "beneath" anyone or unworthy. All work is worthy and should be respected as such.


There are about 130 million paid jobs. That means 170 million residents aren't being paid to work. I have predicted the number of employer-paid jobs might decline to about 100 million. We as a society will have to make new arrangements to keep another 100 million people productive and usefully "employed" even if they are not paid in the traditional manner. (The remaining 100 million are children, the elderly, severely disabled, prisoners, etc.)


Job-sharing, informal work, unpaid work performed while drawing unemployment, food stamps and Medicaid--these are sensible, obvious ideas for adapting to The End of (Paying) Work.



I am slowly catching up on correspondence after several weeks away from my desk --your patience is appreciated.



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