COMMENTARY:

The Ugly Truth about Jobs

Federal Reserve Board Chairman Ben Bernanke has given Americans a glimpse of the ugly truth about their future job prospects. Simply put, companies have found that they can shed workers and rely on technological advances and overseas factories to operate with a lot fewer U.S. employees.

Bernanke told the Economic Club of New York on Monday that some U.S. companies might begin to add workers to meet rising demand, but he added that “other firms, facing difficult financial conditions and intense pressure to cut costs, seem to have found longer-lasting, efficiency-enhancing changes that allowed them to reduce their workforces. ...

“To the extent that firms are able to find further cost-cutting measures as output expands, they may delay hiring.”

In other words, Americans – from blue-collar manufacturing workers to white-collar office employees – won’t be needed as much in the future by companies that are squeezing more productivity out of the workers that remain and are shifting more jobs overseas.

That means U.S. unemployment can be expected to stay high and wages low, Bernanke said.

“Given this weakness in the labor market, a natural question is whether we might be in for a so-called jobless recovery, in which output is growing but employment fails to increase,” the Fed chairman said, suggesting strongly that the answer would be yes.

“Since December 2007, the U.S. economy has lost, on net, about 8 million private-sector jobs, and the unemployment rate has risen from less than 5 percent to more than 10 percent,” Bernanke said. “Both the decline in jobs and the increase in the unemployment rate have been more severe than in any other recession since World War II.

“Besides cutting jobs, many employers have reduced hours for the workers they have retained. ... These data suggest that the excess supply of labor is even greater than indicated by the unemployment rate alone.

“With the job market so weak, businesses have been able to find or retain all the workers they need with minimal wage increases, or even with wage cuts. ... The best thing we can say about the labor market right now is that it may be getting worse more slowly.”

Yet, while American jobs were falling off a cliff, productivity – defined as output per hour of work – was soaring, rising at a 5.5 percent annual rate this year, Bernanke said.

Put all this together and average Americans might want to rethink how they feel about their “free-market” economic system, now that many of them have been made surplus to it. High unemployment also may cause a double-dip recession – and even more layoffs – because jobless Americans won’t be able to pay their mortgages or buy new cars or other consumer goods.

So what can be done? The obvious answer is for the government to intervene in creating infrastructure jobs directly and encouraging the private sector to spread the available work around (and not ship so much work abroad).

However, with the federal government deeply in debt (thanks to George W. Bush’s massive tax cuts tilted to the rich and because of his two open-ended wars in Iraq and Afghanistan), there isn’t much money to devote to any additional economic stimulus.

Thus, the Obama administration is faced with the dilemma of either borrowing more money or raising taxes on the rich to help pay for programs to increase jobs. Neither prospect is politically attractive, since Democratic “deficit hawks” keep banding with Republicans to block any more borrowing and many politicians are terrified of raising taxes, even if only on millionaires.

Ironically, the current crisis could have one silver lining, if Americans finally opted for an economic strategy that raised taxes on the rich, who have benefited most from the technological advances and the expansion of international commerce, and shared those productivity gains with more people.

That might allow Americans to begin enjoying the future that seemed to be beckoning years back, when people thought that machines would make life easier for humans, not harder.

But many Americans have been sold on the right-wing and neoconservative message that any government effort to address the nation’s domestic needs is dreaded “socialism” and that the government’s primary -- if not only -- role must be to lavish money on the military to “keep us safe.”

That widespread belief system is the result of three decades of having drummed into their heads Ronald Reagan’s catchy phrase that “government is not the solution to our problem; government is the problem,” a theme repeated endlessly on right-wing talk radio, at Fox News and in a host of other conservative media outlets that dominate the American landscape.

Simultaneously, the American Left has done little to counter the Right’s propaganda. During those same three decades, progressives invested relatively little in building a message machine that could compete with the Right’s giant megaphone. [See Consortiumnews.com’s “The Left’s Media Miscalculation.”]

This media asymmetry has had devastating consequences for the American political process. In the 1980s, Reagan had a relatively free hand to go after “big labor”; in the 1990s, working with the triangulating Clinton administration, Republicans pushed through “free-trade agreements” and bank deregulation; and in this decade, Bush slashed taxes for the richest Americans.

The results are now apparent in home foreclosures, bankruptcies, crumbling infrastructure and neglected cities, as Michael Moore graphically demonstrated in his new documentary, “Capitalism: A Love Story.”

But today’s U.S. political/media process doesn’t allow these problems to be seriously addressed. The Washington conventional wisdom is still shaped by the powerful right-wing think tanks and defined by the vast right-wing news media. Mainstream journalists mostly go along to save their careers.

Many laid-off “Joe the Plumbers” parrot the Right’s fury about the “class warfare” of imposing higher taxes on millionaires. Other rank-and-file Americans tie teabags to their hats and descend on Washington to participate in anti-government rallies, partly organized by corporate interests.

Over several decades of covering Washington’s neoconservatives, I have marveled at their cynical but not-entirely-false view of the American people as cattle to be herded, corralled, occasionally stampeded and ultimately led to the slaughterhouse.

The hyped case for war with Iraq was a marvelous example of how the neocons could use lies and deceptions to get young men and women from small towns and big cities across America to go kill – and be killed by – troublesome Arabs in the Middle East, the neocons’ favorite enemies.

These neocons’ propaganda successes are directly attributable to their dominance of the Washington echo chamber, where they craft cleverly framed arguments from their positions at influential think tanks and then watch as their messages are amplified across the country by right-wing radio hosts, Fox News, the Internet and an array of print publications, including mainstream outlets like the Washington Post.

Only now – as the unemployment lines stretch, as medical insurance is denied, and as the sheriffs show up with foreclosure notices – are some Americans sensing the end of this strange journey, with the whiff of an unpleasant fate behind the doors of the slaughterhouse.

[For more on this topic, see Consortiumnews.com’s “To Save the Republic, Tax the Rich.”]