This week in Quartz, business journalist Ali Velshi discusses the challenges of understanding “the way markets and morality influence one another” so that “we can try to develop strategies to help the markets promote the values we hold dear, and change practices that are inconsistent with our beliefs.” I also found this 2012 Atlantic article by Harvard’s Michael Sandel, which argues that we should be very worried about the current state of society where “almost everything is up for sale.” The New America Foundation’s Michael Lind came out with a report last week on an agenda for reforming the fading U.S. social contract that also may be of interest.
This week bloggers ridiculed an attempt by McDonalds to help their minimum wage workers budget. ThinkProgress’ Annie-Rose Strasser sums up the outrage this way:
[W]hile the site is clearly meant to illustrate that McDonalds workers should be able to live on their meager wages, it actually underscores exactly how hard it is for a low-paid fast food worker to get by. The site includes a sample “budget journal” for McDonalds’ employees that offers a laughably inaccurate view of what it’s like to budget on a minimum wage job. Not only does the budget leave a spot open for “second job,” it also gives wholly unreasonable estimates for employees’ costs: $20 a month for health care, $0 for heating, and $600 a month for rent. It does not include any budgeted money for food or clothing.
In the Atlantic, Jordan Weissmann challenges arguments that minimum wage work is largely the about young people, noting that 40 percent of such workers range from 24 to 54 and that the number of low paying food service jobs is likely to grow:
The BLS projects that food services will be among the fastest growing source of jobs for Americans with no more than a high school degree -- right behind retail and home health aides. So maybe working at McDonalds doesn't usually amount to a career today. But it might tomorrow.
In the Huffington Post, Peter Goodman the real budgeting issue is corporate welfare:
The truth is that millions of Americans are mired in financial disaster not because they didn't bother with arithmetic, but because their means have long been inadequate. For some 80 percent of the American workforce, median weekly pay is lower today than it was decades ago. The means have gotten smaller while the costs of housing, health care and education have climbed. McDonald's is a central part of how that story unfolded. Its business has enriched executives and shareholders while pinning workers in poverty and sticking taxpayers with the attendant costs. A budget that makes sense for the country would capture those costs and put them back on the company in the form of a living wage.
It isn’t any wonder either that according to a recent Pew poll business execs rank second to last in perceived contributions to society’s wellbeing, check out this chart:
In this video the Charles Koch Foundation turns the debate about the “1%” on its head by pointing out Americans making $34,000 or more are in the global one percent, you know when comparing to the world’s poorest people. Jeremy Nicholls in the Pioneer Post discusses what he calls the myth of social progress globally where two billion people still live on less than $2 a day, and social mobility is down in so-called wealthy countries—yet “the myth remains that we live and work in meritocracies, where if you work hard you can succeed.” You also may find interesting this 2012 report from Jeff Madick of the New America Foundation on “wage-led growth,” which argues for regulating executive pay and notes that “the finance in the suppression of wage growth and low levels of investment has not been adequately acknowledged by policymakers or discussed in the media.” Speaking of CEO pay, the Economic Policy Institute’s Lawrence Mishel and Natalie Sabadish also put out a 2012 report on how the executive compensation and financial sector pay have fueled income inequality. Lastly, we have this great piece from the Nation on alternatives to organized labor and how these efforts are mostly being funded by foundations in “right to work” states.
Everyone is talking about the continued poor job creation numbers, consider this recent graph from the Economic Policy Institute:
Such analysis has caused some to worry this is a permanent condition and to opine about the causes such the “it’s technology’s fault” debate that has been going around the web the last couple of months. Robert Samuelson argues that it may not be technology at fault for current unemployment but could stymie future job growth:
Over the past half-century, higher productivity in manufacturing and agriculture has enabled Americans to spend more on health care and education. If history repeats itself, fears about the digital revolution (like earlier fears of other technologies) will fade. There's the rub: Will history repeat itself? It's a stretch to see digital technologies as a major source of today's unemployment. In the recession, the economy lost 8.7 million jobs. Most were non-digital, concentrated in construction, finance, retailing and manufacturing. What seems less dubious is that, in a permanently sluggish economy, firms might favor digital investments that shave costs and sustain profits.
In the summer issue of the Washington Monthly, New America’s Barry Lynn looks at the ways this debate is playing out in two different camps of thought, and finds they may be missing a significant component, tech monopoly:
It hardly needs saying that we live in an era in which millions of workers have been displaced by technology. Less obvious to some, but also demonstrably true, is that we live in an era in which the pace of technological progress has stagnated in many key realms. Where, for instance, is the “century of biology” we were promised only a few years ago? And that once-vaunted pharmaceutical “pipeline” looks awfully dry these days. But what if both camps are right about the effects they observe and wrong about the causes? What begins to make sense of this odd picture is a problem that previous generations of Americans also had to confront—a concentration of economic control that enables a few corporate bosses to manipulate technological advance entirely outside of any open and competitive marketplace. Put another way, what can explain both of these problems is that the masters of America’s biggest technological corporations increasingly enjoy the power to speed the rollout of technologies that favor capital and to slow those that disfavor their own private interests.
In the New York Times, economist Joseph Stiglitz similarly argues IPO rules reinforce inequality:
First, I argued that societal inequality was a result not just of the laws of economics, but also of how we shape the economy — through politics, including through almost every aspect of our legal system. Here, it’s our intellectual property regime that contributes needlessly to the gravest form of inequality. The right to life should not be contingent on the ability to pay. The second is that some of the most iniquitous aspects of inequality creation within our economic system are a result of “rent-seeking”: profits, and inequality, generated by manipulating social or political conditions to get a larger share of the economic pie, rather than increasing the size of that pie. And the most iniquitous aspect of this wealth appropriation arises when the wealth that goes to the top comes at the expense of the bottom.
Meanwhile, in a new report from the think tank Third Way, which argues that rather than face continued mass unemployment we should be educating you people for “well-paid human work,” aka high-skilled jobs computers cannot do.
I have largely managed to stay away from debate over the gender gap in this recession, because for the most part I have encountered a lot of dubious analysis, such as this from the American Enterprise Institute:
However, the Economix’s Floyd Norris offers some pretty interesting thinking on how and why the gender gap in employment is actually playing out:
The relatively better performance of women does not appear to be the result of employer preference for female employees. In fact, the opposite may be true. In most industries, women’s share of the labor force is down from what it was when the recession began. But some professions with a predominantly female work force have done better than the economy as a whole. The best example of that is health care, where about 80 percent of the jobs are held by women. Employment in that industry continued to rise throughout the downturn. The latest figures indicate that the number of men with jobs in the field is up 15.8 percent since January 2008, when overall employment peaked just as the Great Recession began, while female employment has risen by just 9.8 percent. But given the preponderance of women in health care jobs — about four out of every five workers in the field are women — those numbers translate into new jobs for more than twice as many women as men.
Of course, women remain underpaid notes Shan Li in the LA Times:
The top professions among women haven't changed all that much over the last half century. Women are still more likely than men to work minimum-wage or low-pay service jobs. In 1960, the top five leading occupations for women were private household workers, secretaries, sales clerks, elementary school teachers and bookkeepers. In 2010, the leading categories haven't changed much. The top five are secretaries, nurses, elementary and high school teachers, cashiers and retail clerks.
Lastly there is this McKinsey report on five potential sectors for U.S. GDP growth (but since GDP seems decoupled from employment, I am not sure how this translates to actual jobs). In the Wall Street Journal, the Manhattan Institute’s James Piereson discusses the relationship between government and charities, and whether the nonprofit sector still operates “as a check on government by providing private avenues to serve the public interest.” In the Pioneer Post, Liam Black warns a young social entrepreneur that getting innovation and scale must include a willingness to fail—as Silicon Valley well knows.