Home > Uncategorized > Looking for work in all the wrong places

Looking for work in all the wrong places

from David Ruccio

outsourcing

Donald Trump promised to bring back “good” manufacturing jobs to American workers. So did Hillary Clinton.

Both, as I argued back in December, were wrong.  

What neither candidate was willing to acknowledge is that, while manufacturing output was already on the rebound after the Great Recession, the jobs weren’t going to come back.

They were also wrong, as I argued in November, about there being anything necessarily good about factory jobs.

But perhaps even more important, as Eduardo Porter reminds us, the focus on manufacturing deflects attention from what is really going on in U.S. workplaces.

the vast outsourcing of many tasks — including running the cafeteria, building maintenance and security — to low-margin, low-wage subcontractors within the United States.

This reorganization of employment is playing a big role in keeping a lid on wages — and in driving income inequality — across a much broader swath of the economy than globalization can account for.

contingent

And, according to a recent study by the Government Accountability Office, much of that outsourcing is taking place outside the manufacturing sector. Moreover, the growth of contingent work—for example, 17.3 percent in education services and 6.1 percent in professional/technical services—is accompanied by lower wages, fewer benefits, and more job instability.

The problem in the United States is not what workers do or what they produce. It’s how they do what they do.

Employers, not workers, are the ones who decide how labor is performed. And when they can outsource jobs to contractors—and, as a result, avoid unions, workplace regulations, and adequate pay and benefits—they can exercise even more power over their workers, including of course the ones they continue to employ.

That, and not the loss of manufacturing jobs to foreign companies, is the real problem facing the American working-class.

  1. Craig
    March 2, 2017 at 2:52 am

    Not only is aggregate individual demand being eroded by these corporate trends, but AI will undoubtedly destroy same at a rate many times higher than it ever has before in the immediate future. Then, on top of all this erosion of purchasing power you need to consider the empirically verifiable data that shows that the system is inherently cost inflationary on its lower bound, i.e. there are increasingly additional costs of depreciation (as well as other additional costs) in modern technologically advanced economies over and above the monetary inputs of finance. Again, this data is in the cost accounting figures of any “going concern” and the completely correct cost accounting convention that “all costs must go into price” enforces it. This latter inherent cost inflationary fact undermines the completeness and validity of economic theorists across the entire spectrum left to right. Economists can get their advanced degrees without taking so much as an elementary course in accounting, and understanding mere debits and credits does not expose the relevant data, their relationships and their economic consequences. That takes a thorough understanding of the subset of double entry bookkeeping known as cost accounting. Couple these systemic facts with the curiously monopolistic monetary paradigms of Debt, Loan and for Production ONLY enforced by the business model of Finance and there is no current way that the system’s underlying inherent cost inflationary scarcity ratio of total individual incomes to total costs/prices….can be resolved. It requires a new monetary paradigm of Direct Gifting to the individual and a reciprocal gifting of price to the consumer at retail sale and then a gift of money back to the merchants who give that discount so that they can be whole on their margins and overheads.

  2. March 2, 2017 at 10:22 am

    David, without disagreeing with what you say, may I point out that the economy has jobs in distribution, development and recycling as well as in manufacturing, and as industrialists can make only what will sell, to some extent they are subservient to unfettered traders, who undercut local jobs and possibilities of maintenance by unnecessarily buying from abroad.

    Craig, on your “new monetary paradigm” we differ mainly in our choice of words. Since honest money turns out to be credit, your Direct Gifting as needed can be provided to both buyers and sellers by a credit card, where purchase transactions appear in the accounts of both the purchaser and the merchant who has to restock. This however creates a chain of buying and selling down to the manufacturers and farmers who have to restock materials and equipment but also (along with distributors and retailers) have to do the work necessary to restock sellers. In the existing monetary paradigm that work is also “bought in”, but in reality it is that which regenerates the produce our credit cards “gift” us. The credit card system is only sustainable if we pay off our debts by earning our keep; and in reality that is done by doing what needs doing, not by returning IOUs recycled as wages by employers.

  3. patrick newman
    March 2, 2017 at 12:23 pm

    I dont tthink you are suggesting that the magnitude of manufacturing jobs going to overseas producers is not significant?

    • March 2, 2017 at 6:43 pm

      If this is directed at me, I’m certainly not suggesting that!

      My point was that manufacturers are competing with traders who are free to drive down prices by flooding the market with unnecessary products, bought cheap enough to sell relatively dear, neither bearing the costs of decent foreign working conditions nor fairly balancing the advantages of foreign trade. Manufacturers (to balance their books, never mind maintain the profitability they were accustomed to) have been left with Hobson’s choice between reducing average wages to overseas levels – which not surprisingly generates opposition – or exporting the jobs wholesale to where the wage costs are already low. Most of the unfairness comes back to trading on bank credit at interest and exchange rates manipulated by speculators, who are held even less responsible for working conditions and worthwhile trade than traders and manufacturers.

      I’m certainly not suggesting now that international trade is a bad thing. What is bad is fraud and irresponsibility in it. What would be better would be “credit card” finance cutting out banking and monetary speculation while leaving wholesale traders responsible for giving in real terms as good as they get. Right now mankind is still warring against Nature (see Michael Hudson’s book, advertised top right: “Finance as War”). The need for austerity having been thrust upon us by global warming and pollution, Mankind needs to be doing voluntarily now, what Britain was compelled to do during and after the Hitler war: to ensure we make what we really need and to ration it out fairly. That was the period after which our prime minister Harold Macmillan could famously – and in my opinion rightly – say “We have never had it so good”.

  4. March 3, 2017 at 11:53 am

    According to neoliberal dogma jobs are not part of “the economy.” Capital and capitalists (now more frequently labeled entrepreneurs, which is an insult to actual entrepreneurs) are the economy. The rest is just the means to achieve the goals of capitalists. Greater profits and returns to share owners. Morality is irrelevant, fairness is irrelevant, the welfare of citizens or the nation are irrelevant. So, naturally workers are irrelevant. Their work is only a means to an end. And they are like machine parts, interchangeable and disposable.

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