OK, I caved. I was going to be good and pass the Jack in the Box this morning, what with the Cerretta’s chocolates I grabbed last night at Albertson’s, the Steak I had for lunch yesterday, and the countless other gastronomic indiscretions that have long since passed from memory and elsewhere, but I didn’t. So, as I sat in the drive-thru in my old Honda, searching for change under the seat, I thought – “this would be a dream come true scenario for the starving people of the world. Imagine being able to travel, by swift conveyance, to a whimsical robot food machine, pay tribute to it, and then make off from it like temple bandits”. Two thousand years ago, some of peoples of this earth would have made sacrifices to a Jack in the Box (as if we don’t) had one magically appeared near mount Ararat. The availability of breakfast jacks, double cheese burgers, and triple think shakes (made with real ice cream) would have been proof positive of God’s blessing on his chosen people, or, lacking those, of his sure wrath and indisputable displeasure. On the other hand, we, the modern people who build and operate our fast food society, know better; or do we?
Years ago, I made a similar stop for the exact same meal, but that time, walking inside, I meet the eyes of an attractive woman in her mid thirties who appeared to be the shift manager. Those eyes, I read as single, said to me, “please, PLEASE, take me away from this”. She was in the middle of a morning rush, and I wasn’t dating then, so I passed, but felt her pain, the pain of being trapped in a life not of your own making but built on rules and conditions others had made for you. It’s the same old story.
Before fast food was built on big agribusiness, food was grown and gathered, and a vast majority of people alive did all of the growing and gathering. The only exceptions were the relatively small percentages of the world’s population who lived in cities so large that their lives couldn’t center on agriculture, and this was only possible in the temperate and fertile zones where sufficient food was grown abundantly enough to more than meet the needs of those who grew it. This was the case even until a few hundred years ago, and it didn’t change much until some early mechanization and improved planting and growing methods emerged. With the advent of the beginning of modern agriculture, significant numbers of people were free do other things for a living. The end result is that if you worked hard and had an interest and desire to be, say, a nuclear physicist instead of a farmer, you could go to school and maybe your dreams could come true, maybe. This was especially true in the twentieth century, and more true, then, than at any time in the history of mankind, and perhaps more true then it is now for those of us in the US. You see, what makes it possible for people to do a wide variety of jobs, is a broad and diverse economy, and what makes for a broad and diverse economy, is the availability of a wide variety of jobs. This is the chicken and egg nature of the relationship between wages and economic growth – that is, that they both have to grow at about the same time.
A few years back, I was visiting a factory in the mid-west that made chrome stackable office chairs. What struck me was how frantically the people in the factory were working. The seat cushions were pre-made and shipped in from China, but the steel frames were being made here and the employees were bending and welding that steel like it was the last days of World War Two and the allies were losing. Go figure. In the last twenty years, America has exported millions of manufacturing jobs overseas and it’s a safe guess that the workers in the chair factory knew that if they didn’t outproduce people living halfway around the globe, that they would be flipping burgers instead of assembling furniture.
If you take a step back from the pleading eyes and spattering welding rods of the present American workplace, a sane person might ask, what difference does it make if low skilled, sometimes poorly educated, underemployed people– that is, the vast majority of Americans – make seat cushions or freedom fries?
The difference it makes is not the dignity of the work – working in a factory has always been a trial by fire for those on the floor, and if you go back to the steel mills of earlier times, that was LITERALLY true. The sad fact is that most of the progressive reforms enacted in the twentieth century, to protect worker’s health and safety, were enacted because of that kind of work environment. So what is not greatly at issue is the quality of the work lives of low skilled workers. It’s a given, at least for now, that in order to make things efficiently, repetitive and relatively mindless labor is required. But what is also required are a varying subset of sometimes very specific workplace skills (welding, or example), with the notable commonality being an ability by workers to tolerate repetitive and half-mindless work, all in exchange for a livable paycheck.
So back to the chicken and the egg. A broad and diverse economy creates a broad and diverse variety of jobs. Some people will choose to work in those factories, and it is up to the greater society to enact laws and regulations that protect their health and safety as much as necessary. But, many other people will not be willing or able to participate in that area of a diverse economy, and will go elsewhere. So, as long as those jobs are available, only some fraction of the labor force will choose to work those, and so, based on the laws of supply and demand in labor markets, and for employers to attract and keep good employees, they will have to offer something to them – that something usually comes in the form of wages and benefits.
In other words, by having a diversity of jobs in a broad economy, where some jobs are less desirable then others, coupled with high employment (which happens when other economic factors are favorable), you get relatively high wages for relatively low skilled work – or more specifically – you get relatively high wages for average people who work in jobs that contribute to the overall productivity of the economy. It is precisely that contribution, where people work to produce the goods and services they consume, that makes it possible for them to live well.
The alternative, without that resource of diverse and sometimes undesirable jobs, is that a large pool of low skill people end up competing for a large pool of relatively similar retail and service sector jobs. Only this time, many of the jobs are not as arduous and undesirable as the factory jobs, but simply uninteresting. As well, many of these jobs do not so much require an ability to withstand them (and at the same time be productive) but simply a willingness to put in your time and go with the workflow. In a sense, the low skill jobs of the new economy aren’t as trying (obnoxious customers and bosses aside) as they are stagnating and uninteresting. If the alternative is starvation, the choice is easy enough either way. But, in an economy where a greater diversity of jobs creates a greater diversity of wages – after all, if most all low skill jobs have a commonality of job requirements, then more people are potentially available for each job, and so each job need not pay as much – the aggregate wages paid to low skill workers will slip from the living wages necessary for full participation (as consumers) to those of marginal and more impoverished ways of life. That is where we’ve been going, and that is where we are now.
Is it any wonder that outwardly middle class Americans have run up mountains of credit card debt in the last decade or so, and then refinanced it into their houses? Lately, the blame for this has been heaped on “irresponsible borrowers” for buying the shoddy (and sometimes deceptive) sub-prime mortgages. This last part has been offered as a root cause explanation for the economic collapse that we are now seeing, and not the copious greed of Wall Street or the total government indifference to it.
The real story is that Americans are strapped and maxed out on their credit cards, and more than anything else, it’s the dilution and stagnation of the wages of working Americans that’s behind it. What’s behind that (aside from the removal of pro-labor laws) is the export of higher paid manufacturing jobs to places like China. Places that pay workers five or ten percent of what Americans would earn for the same work. The irony is that those workers, and now many American workers, are in the same boat, that is, that there is a significant gap between the wages they earn and the cost of the goods and services they produce – so that they are largely not able to buy what they make (or now sell). In the case of developing economies like China this is part of the growth curve of their economy. It is possible (but not entirely likely) for them to expand their wage base enough to improve the ability of their workers to become (by and large) full participation consumers. What is not possible is that Americans can continue on the track they’re on, where many are becoming marginal, “Dollar Store”, consumers because they don’t earn enough to do otherwise, especially now that their credit wells are running dry. FYI – those credit wells were built by Wall Street on the idea of selling debt to Americans instead of paying them a living wage. This is the final irony. That the overall growth of our economy has been largely the growth of the financial services sector, up from 1% of GDP, in 1960, to almost 20% last year. The fuel for this growth has been partly the wages that have not been paid to American workers, instead going into corporate balance sheets which then flowed into investment banks like the now defunct Bear-Sterns (and many other). This necessitated the creation of easy credit, to keep everyone spending, plus the creation of another mountain of phony securities that investment banks sold to us (and each other) as “investments”.
The current problems in the financial sector, the ones that we as tax payers are being asked to shore up to the tune of king’s ransom (that $700 billion bailout) are the end result of consumers no longer being able to consume based on a lack of real, living, wages. At the same time this, this is complicated by the pernicious effects of too much paper money chasing too little things of value in the real economy – all of the bubbles we’ve seen in housing, food, and energy. Now we are in a position where in order to make things work again, wages have to come up as the economy is collapsing. Macro-economically, it’s a non-starter.
Seventy years ago, what the government did, late after the great depression was to put money in the hands of consumers by creating works projects. Instead of spending upwards of a $1 trillion bailing out the people who got us into this mess. The only sane thing to do now is (or was) a “new deal” kind of government driven employment program, along with some consumer bank guarantees. This could have been used to rebuild the $500 billion in road and other infrastructure improvements that this country desperately needs, or, for investing in and so reinventing our energy infrastructure by moving the US away from the dwindling fossil fuel resources that WILL eventually perpetuate this “downturn” into a long term, worldwide depression (and an endless blood for oil game). Understanding this would be real leadership.
Instead what we have is politicking in the frame of “we know what’s best now, trust us”, where it is, and will become, increasingly obvious that those who got us into this mess are incapable of getting us out. It’s kind of like what Albert Einstein said “We cannot solve our problems with the same thinking we used when we created them”. All the while, people’s eyes are pleading.
