Jobless recoveries and productivity surges (22 June 2011)

Does the business community care about achieving full employment? Why would it? With a slack labor market, companies can drive workers harder, treat them poorly and cut their benefits as ruthlessly as if they were Greek citizens and the employees have no recourse. That's the essence of the recent Mother Jones article by Monika Bauerlein and Clara Jeffery on the "great speedup" -- how companies are using improving productivity (a.k.a. working people much harder) to trim their payrolls and improve profits.

In all the chatter about our "jobless recovery," how often does someone explain the simple feat by which this is actually accomplished? US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.

Why aren't we outraged? The authors suggest the American ideology of hard work and bootstrapping makes us particularly susceptible to drawing our self-esteem from overwork (maybe we all need to be reading Lafargue), though the weak labor-protection laws also play a part in helping corporations get away with limiting vacation time, sick pay, parental leave and so on. They point out that "productivity" is more or less a euphemism for extracting more labor from workers in shorter time periods, glossing over the reality of bosses sweating employees by evoking some magical technological fix. Sometimes we are lulled into thinking "productivity improvements" means people work just as hard as they ever were but more stuff is made, thanks to magic machines. Machines often permit workers to do more faster, but some innovations -- communication technology, for instance -- serve to conceal the extension of the working day and the intensiveness of workplace discipline. And in all cases, technological accelerants have a corresponding effect on workers, who must keep up with the machines and may experience increased stress as the managerial pressure mounts. The authors argue that we should organize and fight for more respite from this pressure in the form of increased vacation, work-sharing programs, and the like. Implicit is a sanction of the idea of a productivity freeze, anathema to the traditional economic view that quality of life improves with productivity. Does that calculus shift when productivity yields persistent unemployment and corporate looting of labor's share of the gains from productivity? Perhaps capitalists believe fundamentally that labor doesn't deserve a share -- that seems to be the de facto position of the Republican party.

At his blog, Jared Bernstein has more on the slack labor market, with charts intended to demonstrate that "the diminished ability to bargain for their fair share of productivity growth is a major factor in the productivity/income split. You may think I’m talking unions here, but I’m not. I’m talking high unemployment." Lane Kenworthy, in his recent has a post about jobless recoveries, argues that data from recent recessions reveals that the "pattern of the 2000-07 business cycle may indicate a fundamental shift in employer practices, with greater reluctance to hire and eagerness to fire," citing this 2010 paper (pdf) by Robert Gordon about the apparent demise of Okun's Law, which associates growth with falling unemployment. Gordon claims that the data show that "the concept of a procyclical 'productivity shock' and 'technology shock' is no longer relevant, except in reference to particular major changes in the relative price of oil or other commodities" and surveys some of the other explanations for "structural labor‐market change." This one was particularly comforting:

Firms can reduce employment and hours with impunity if they no longer value the human capital embodied in their experienced workers and have confidence that via the internet they can find replacement employees with equivalent skills, and an ability to learn rapidly the necessary specific human capital to function well on the job.

In yesterday's post I was trying to make the case that internships are an exact reflection of this growing confidence. When jobs become a matter of harnessing the general intellect of the multitude, the individual nodes of the rhizome are interchangeable. Specific skills have become less important than general malleability, so there is no need to keep the same people around or show loyalty to employees to build organizational capital. More and more of us become, to use the term Gordon adopts, "disposable workers." The internet is exacerbating this process not only by making it easier to recruit fresh meat, but also by allowing capital to subsume more and more of everyday life, rendering more of production social (that is, a by-product of subjectivity formation and sociality in general). This polarizes the labor market further into superstars with irreplaceable skills in producing affects (the celebrities whose lives make the other commodities they associate with valuable, and the entertainers who more dependably stimulate us) and the rest of us proles who make up the wisdom of crowds.

But the overarching point of all these articles is that economic growth is not benefiting society as a whole but a smaller class of capitalists and rentiers -- and this appears to be by design, if you buy the story outlined here by Robert Reich (short video). The top 1% of the income distribution controls government, forcing it to pursue policies of austerity rather than those designed to improve employment, because the top 1%, shortsightedly or not, doesn't care about unemployed people, and in fact, can exploit them more ruthlessly the more desperate they are. And politicians don't care about them because constituents are easily demagogued into agreeing with the paymaster's political program. There is no apparent possible consensus, because the 1%ers behave as though improving society for all saps their wealth in zero-sum fashion. Meanwhile, the quality of life for the middle class erodes, government services are cut indiscriminately, and we slouch toward becoming a banana republic.