More on regressive labor politics in the U.S.

I'd like to expand [even] further on my [nearly-epic] last blog post that attempted to explain the huge differences between the level of job and social benefits in most of Europe and in the U.S.A. My thesis was that the differences arose because of varying fundamental perceptions of what is "normal", perceptions that are aided in large part by major media. The U.S. spent 40 years opposed to every aspect of communism, whereas Europe---living next to communism itself---could tell the good parts from the bad. Even this seemingly small difference in political sentiment, coupled with the deregulation of media in the 80s left the U.S. with lingering anti-socialist feelings and very few unbiased media to give the facts. The whole chain of events is very circumstantial---I know---but I think it played a part, if not a large one, in creating our current level of benefits and expectations of benefits.

I find it sad and scary that, as I mentioned in the last post, we in the U.S. not only have far fewer benefits for citizens than the EU---whose economy has trailed the U.S. in size, and whose per-capita GDP still trails the U.S.---but we also are going in the opposite direction. The strongest recent examples of this are in Wisconsin and Ohio, as well as other states where the governors are working hard to cut benefits for public employees and even to take away their collective bargaining rights. It seems to me that the right to negotiate---also as a group---is a basic right that should not be able to be removed, and I haven't yet found any good arguments for taking the rights away except (1) saving money and (2) giving more power to employers, possibly to create jobs.

Creating more jobs is almost always good. More people get paid and more people have money to spend, and so forth. But, it's as if Governors Walker (WI) and Kasich (OH), along with many other political conservatives, think that the cure for every personal economic ailment from poverty to lack of affordable health care is, "Get a job and call me in the morning." But, especially in a time when jobs are hard to find, and a good public job is even harder to find thanks to these two, it benefits us to take care of those people who are left out of the market. The vast majority of Americans have jobs; the vast majority of Americans have insurance, and a little bank account and a car and a computer, but what about those who don't? What if you didn't? What if your employer chose to cut costs and you along with it? I have the feeling that few employed people seriously consider this question before they vote.

I'm having trouble finding a good statistic for the percentage of people who are unemployed at some point in their lifetime, so I'll look at a hypothetical case here. Right now, the unemployment rate is close to 9%; historically it's been a bit lower, maybe 5-6%. That means that, on average, an American has a 1 in 10 to 1 in 20 chance of being unemployed at any given time. Right, you might think, most of these people are lazy and uneducated; I'm educated, so my chances are much lower. That's probably true, but how about this: assuming that the unemployment rate among educated, non-lazy people like you is only 1% for any given year, during a 40-year career you have a [1-0.99^40 = ] 33% chance of being unemployed during at least one of those years. If that theoretical rate rises to 2%, the chance is 55%. Wouldn't you like to know that you could survive that year (or longer) even if you're young and have very little savings, or if you're one of the usually older crowd who is "uninsurable" unless you are part of an employer health plan?

The chance is high that you---even as an intelligent, hard-working individual---at some point in your life will be stuck in a bad employment situation, be lacking adequate insurance, or be out of work with very little help from the economy that you helped for many years. These are problems that social benefits ease, whether through direct help or through regulation. To vote against an adequate safety net for unfortunate people is to be selfish, and not only selfish in the sense of not helping other people but now-selfish in the sense that you are not helping yourself (in a different time and place) if you are ever in need of help.

The point is that, in a country as developed as the U.S., a person's quality of life should not depend on them having a job every single month of the year. Even if some people cheat the system and take more benefits than they deserve, the rest of us can sleep easier knowing that if we get fired, or if we are in a horrible job situation and need to quit, we can survive the next few months without having to sell a house or make drastic changes to our lifestyle. Also, women should be allowed to have babies without fear of negative discrimination before or after the birth. Two weeks or less of vacation per year is just ridiculous (see my last post). Lastly and most relevant right now, a person who has done everything right---worked hard, saved money, etc---should not have to make major life decisions---employment, relocation, marriage, etc---based on available insurance or lack thereof. A job should not be the only affordable insurance policy for anyone who works hard or who is in retirement. The only natural connection a job has with insurance is that employees, when lumped together, simplify the actuarial calculations. It is sad---and to me unacceptable---that hard-working, self-employed people or small business owners have few affordable insurance options.

This is where the government is supposed to step in. The government should ensure that people are not being mistreated by corporations or held hostage by cheaper insurance plans. Women should be able to have babies and then return to their jobs without fear of being fired or demoted. Employees should have more than 4% of their weeks at their own leisure. Why are we heading back towards Industrial Age labor practices?

We all know the role of government is to help its people in one way or another. Government is not selfish; in fact, it is the opposite of selfish. It does for the people what the people could not do for themselves if acting individually. Therefore, as George Soros said in a lecture in October 2009 (see The Soros Lectures, 2009)

...people should separate their role as market participants from their role as political participants. As market participants we ought to pursue our self interest; as participants in the political process we ought to be guided by the public interest. The justification for this rule is also rather simple. In conditions close to perfect competition no single competitor can affect the outcome; therefore individual market decisions have no effect on social conditions, whether or not one cares about the common good. But political decisions do affect social conditions; therefore it makes all the difference whether or not they serve the public interest.

Of course, as Soros goes on to say, there is no objective "best" political decision, so the issue is not cut and dry. However, if everyone attempted to follow Soros' above rule, regardless of their political views, we would be doing much better than we are now. No more "pork-barrel", no more "earmarks", and no more rich people dominating campaign contributions, lobbying, and media broadcasting. That's something to think about the next time you're in the voting booth. If I might shamelessly twist the words of John F. Kennedy: vote not for something your country can do for you---voting unselfishly is something you can do for your country.


Ben said...

I would add the concepts of individualism (from cultural psychology) and Ayn Rand as two other influences on America's economic philosophy differences with Europe and Asia.

fbg said...

I understand what you mean by "individualism", I think, but not the Ayn Rand part exactly. You don't mean that the author herself influenced the culture through her books, do you? I do agree that the individualism (or self-realization or -determination) that she seems to promote is expressed strongly in her books, perhaps better than elsewhere, but she seems more like a result than a cause. I read somewhere that America was raised on frontier culture, which later included "open-road" and "cruising" culture, which is probably closely related.

Also, I can't speak for Asia, but I can't see a huge difference in the pure individualism of the U.S. vs. that of Europe. In both places, people take care of their friends and rudely push past strangers in the subway. I've actually had more experience with pleasantly friendly strangers in the U.S. than in Europe, including in New York City. Standing in line is one activity during which most Europeans disrespect others much more than Americans.

On the other hand, now that I think about it, even if people in Europe are as self-centered (or more so) as Americans with respect to the strangers they meet on the street, I agree that they are probably less self-centered with respect to social issues with which they have very little personal contact. Austrians, Germans, and French people regularly fly off the handle over news that somewhere else someone is suffering. Compassion is, of course, almost always a good thing, but it's also so easily manipulated by the media.