is the title of this op ed for Friday's New York Times.
The fear is economic.
The fear is not having a job.
It is made worse by the cutting off of extended unemployment benefits as of Saturday.
It is exacerbated because, as Krugman points out,
employment generally involves a power relationship: you have a boss, who tells you what to do, and if you refuse, you may be fired. This doesn’t have to be a bad thing. If employers value their workers, they won’t make unreasonable demands. But it’s not a simple transaction.From the standpoint of the employees, higher unemployment means
employers are in a position to work them harder, pay them less, or both.Economic insecurity means that people are reluctant to quit even a badly paying poor job unless they have another job in hand.
So are employers working their employees, harder, paying them less, or both?
Please keep reading. . . .
Is there any evidence that this is happening? And how. The economic recovery has, as I said, been weak and inadequate, but all the burden of that weakness is being borne by workers. Corporate profits plunged during the financial crisis, but quickly bounced back, and they continued to soar. Indeed, at this point, after-tax profits are more than 60 percent higher than they were in 2007, before the recession began. We don’t know how much of this profit surge can be explained by the fear factor — the ability to squeeze workers who know that they have no place to go. But it must be at least part of the explanation. In fact, it’s possible (although by no means certain) that corporate interests are actually doing better in a somewhat depressed economy than they would if we had full employment.And of course now that corporations are unleashed for their political spending, those running them are more than happy to keep things as they are
What’s more, I don’t think it’s too much of a stretch to suggest that this reality helps explain why our political system has turned its backs on the unemployed. No, I don’t believe that there’s a secret cabal of C.E.O.’s plotting to keep the economy weak. But I do think that a major reason why reducing unemployment isn’t a political priority is that the economy may be lousy for workers, but corporate America is doing just fine..
- demanding and getting concessions
- sitting on trillions of cash
We will see efforts to repatriate overseas profits without their being taxed.
We will see insistence on any tax deal lowering the effective tax rate so that major corporations continue to pay either very low effective taxes or no taxes at all (or even have the government rebate to them for taxes they in fact never paid in the first place).
Does any of this create jobs? Well, it sure has not so far.
So people continue to fear, which suppresses the willingness to organize which keeps the power relationship tilted to the employers.
Krugman criticizes those progressives who are not focusing on employment. I would quibble on this because I do not think anyone who will forgo an emphasis on increasing employment for any tradeoff can legitimately be considered a progressive, not when so many people are already hurting.
Rewarding passive investors and corporations who do not pay their employees enough to stimulate the economy through spending is not only poor economic policy, it in the long run is a poor political strategy, because either eventually there will be a major pushback - if the Democrats are willing to focus truly on jobs - or else we might be heading for civil disorder.
In any case, read the Krugman column.
Especially his last paragraoh:
Too many Americans currently live in a climate of economic fear. There are many steps that we can take to end that state of affairs, but the most important is to put jobs back on the agenda.More jobs means less fear.
More jobs means a healthier economy.
Less fear means a healthier society.
The choice SHOULD be easy.