Thursday, October 28, 2021
Saturday, October 23, 2021
Friday, October 22, 2021
Is the Chinese Economy in Trouble ?
By Paul Krugman |
These are scary times in America, with one of our major parties careening into authoritarianism and the other having difficulty moving forward thanks to two uncooperative senators. Most of what I write, inevitably, focuses on the troubled prospects for our republic. But everyone needs a break. So today I want to talk about a happier topic: The risks of an economic crisis in China. |
OK, not exactly happier. But a change in subject, anyway. |
Warnings about the Chinese economy aren’t new — but until now the worriers, myself included, have been consistently wrong. Back in 2013 I suggested that China’s growth model was becoming unsustainable, and that its economy might be about to hit a Great Wall; obviously that didn’t happen. |
Yet the more closely you look at how China has been able to keep its economy going, the more problematic it looks. Basically, China has masked underlying imbalances by creating an immense housing bubble. And it’s hard to see how this ends well. |
The background: The reforms introduced by Deng Xiaoping at the end of the 1970s created an economic miracle. China, which was desperately poor, is now a middle-income nation, and given its size, that makes it an economic superpower. But China’s economic growth has been gradually slowing. Here’s a five-year moving average of the country’s growth rate: |
|
There’s nothing mysterious about this slowdown. China was able to achieve incredibly rapid growth through a combination of technological borrowing from more advanced nations and a huge transfer of population from rural areas to cities. As its technological sophistication grew and the reservoir of rural labor shrank, growth was bound to slow. In addition, the one-child policy gave China the kind of demography we usually associate with richer countries: The working-age population peaked a few years ago and is now shrinking: |
|
In and of themselves, slower growth and a demographic transition needn’t imply a crisis. But here’s the problem: Chinese spending patterns haven’t adjusted to the needs of a slower-growth economy. In particular, the country still has a very high savings rate, so to maintain full employment it needs to invest an incredibly high share of G.D.P. — more than 40 percent. |
What drives investment? Normally, it depends a lot on how fast the economy is growing: growth is what creates a demand for new factories, office buildings, shopping malls and so on. So very high investment as a share of G.D.P. is sustainable if the economy is growing at 9 or 10 percent a year. If growth drops to 3 or 4 percent, however, the returns on investment drop. That’s why China really needs to change its economic mix — to save less and consume more. |
But Chinese savings have stayed stubbornly high — and yes, excessive saving is an economic problem. |
A few years ago a study from the International Monetary Fund tried to explain high Chinese savings. It suggested that the biggest culprit was the same demographic transition that is one cause of slowing growth: A declining birthrate means that Chinese adults can’t expect their children to support them later in life, so they save a lot to prepare for retirement. This demographic factor is reinforced by the weakness of China’s social safety net: People can’t count on the government to support them in their later years or to pay for health care, so they feel the need to accumulate assets as a precaution. |
Chinese policymakers know all this, but somehow haven’t been able to deal with these underlying issues. Instead, they’ve kept the rate of investment very high despite slowing growth — mainly by encouraging huge spending on housing construction. A 2020 paper by Kenneth Rogoff and Yuanchen Yang shows that Chinese investment in real estate now greatly exceeds U.S. levels at the height of the 2000s housing bubble, both in dollar terms and as a share of G.D.P.: |
|
Rogoff and Yang also show both that housing prices in China are extremely high relative to incomes and that the real estate sector has become an incredibly large share of China’s economy. |
None of this looks sustainable, which is why many observers worry that the debt problems of the giant property developer Evergrande are just the leading edge of a broader economic crisis. |
I’ve already pointed out that until now China has been able to defy the doomsayers. So you might be tempted to give Chinese policymakers the benefit of the doubt, and assume that they’ll manage to deal with this situation. It turns out, however, that they haven’t really been dealing with their economy’s underlying problems, they’ve been masking those problems by creating a housing bubble that will ultimately magnify the problem. |
But why should the rest of the world care? China, which maintains controls on the flow of capital into and out of the country, isn’t deeply integrated with world financial markets. So the fall of Evergrande isn’t likely to provoke a global financial crisis in the same way that the fall of Lehman Brothers did in 2008. A Chinese slowdown would have some economic spillover via reduced Chinese demand, especially for raw materials. But in purely economic terms, the global economic risks from China’s problems don’t look all that large. |
China does, however, have an autocratic government — the kind of government that in other times and places has tended to respond to internal problems by looking for an external enemy. And China is also a superpower. It’s not hard to tell scary stories about where all this might lead. |
And with that, I return you to your regular worries about what’s going on in the United States. |
Wednesday, October 20, 2021
How Lobbyists Destroyed Paid Family Leave in BBB
This 3-Minute Video Explains How Richie Neal Turned Paid Family Leave Into Insurance Giveaway
"Passing a poorly designed paid leave proposal is a dangerous political game for Democrats," warns policy analyst Matt Bruenig.
Tuesday, October 19, 2021
Climate Survival - at risk
Climate survival
Michael Klare
This summer we witnessed, with brutal clarity, the Beginning of the End: the end of Earth as we know it — a world of lush forests, bountiful croplands, livable cities, and survivable coastlines. In its place, we saw the early manifestations of a climate-damaged planet, with scorched forests, parched fields, scalding cities, and storm-wracked coastlines. In a desperate bid to prevent far worse, leaders from around the world will soon gather in Glasgow, Scotland, for a U.N. Climate Summit. You can count on one thing, though: all their plans will fall far short of what’s needed unless backed by the only strategy that can save the planet: a U.S.-China Climate Survival Alliance.
Of course, politicians, scientific groups, and environmental organizations will offer plans of every sort in Glasgow to reduce global carbon emissions and slow the process of planetary incineration. President Biden’s representatives will tout his promise to promote renewable energy and install electric-car-charging stations nationwide, while President Macron of France will offer his own ambitious proposals, as will many other leaders. However, no combination of these, even if carried out, would prove sufficient to prevent global disaster — not as long as China and the U.S. continue to prioritize trade competition and war preparations over planetary survival.
Read more
https://portside.org/2021-10-18/how-save-world-climate-armageddon
Union Strikes and Workers
The John Deere Strike Shows the Tight Labor Market Is Ready to Pop
https://portside.org/2021-10-18/john-deere-strike-shows-tight-labor-market-ready-pop
Portside Date: October 18, 2021
Author: Jonah Furman and Gabriel Winant
Date of source: October 17, 2021
The Intercept in partnership with Labor Notes
Shortly before midnight on Wednesday, production workers at a John Deere facility in Waterloo, Iowa, started shutting down the plant, quenching the furnaces in the foundry. The plant was already mostly empty, with Deere telling overnight workers to stay home. Three days earlier, union members at United Auto Workers meetings in Iowa, Illinois, and Kansas had voted overwhelmingly to reject a proposed contract that gave subinflation raises and eliminated pensions for all new hires. The rejection came as a surprise to both the union leadership and the company; even some of the workers who had voted no and authorized a strike were surprised that it was actually happening. The 10,000 workers who walked off the job are striking Deere for the first time in 35 years. “Just confirmed Waterloo has their picket signs,” one worker said before the strike began. “Shit’s about to get real.”
Read more.
https://portside.org/2021-10-18/john-deere-strike-shows-tight-labor-market-ready-pop
Portside Date: October 18, 2021
Friday, October 15, 2021
Sen Refuses to Agree to Corporate Tax Increase
Report: Sinema Digs In Heels To Oppose Corporate Tax Hike While Blocking Reconciliation
At least part of the standstill over Democrats’ $3.5 trillion reconciliation bill is still rooted in Sen. Kyrsten Sinema’s (D-AZ) refusal to up taxes on corporations and wealthy Americans, according to Insider.
The senator’s objection to President Joe Biden’s proposed tax increases, which are crucial to paying for the sweeping legislation, has been a sticking point in her negotiations with the White House since at least September, as the New York Times first reported at the time.
Amid talks with the White House, Sinema is currently attending fundraisers for the Democratic Senatorial Campaign Committee (DSCC) in Europe.
John LaBombard, a spokesperson for the senator, told the New York Times that she’s held “several calls” with Biden, Senate Majority Leader Chuck Schumer’s (D-NY) team and other Senate and House colleagues this week.
Insider’s report comes as Sinema remains publicly tight-lipped about her counterproposal to the reconciliation bill, much to the frustration to the rest of her Democratic colleagues, particularly progressives.
Sinema has reportedly told House Democrats this week that she won’t vote for the reconciliation bill until the bipartisan infrastructure bill she helped craft passes first.
Unions Loosing Ground
 | Hamilton Nolan is a labor reporter for In These Times.He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. You can reach him at Hamilton ... |
In Middle America, Unions and Democrats Are Sleepwalking Into the Grave
By not organizing in decimated post-industrial towns, we’re ceding ground to the right wing.
By Hamilton Nolan/In These Times/ October 6, 2021
Where is nothing the Democratic Party loves more than indulging in some existential hand wringing over its declining popularity in the crumbling American heartland. Indeed, this was the favorite pundit pastime of the entire Trump era. Amid the wailing over cultural differences and economic insecurity, a rarely heard word is “unions.” Yet, a new report adds to the evidence that the fate of the Democratic Party is intimately tied to the decline of union power. It’s also one more sign that the labor movement itself needs to throw everything it has into new organizing with a fervor that has been lacking in our lifetimes.
The new analysis, by several Democratic consultants, parses election results at a county level to argue that the simple narrative that Democrats win urban areas, Republicans win rural areas, and the suburbs are a battleground, is simplistic and misleading. In fact, the report finds that Democrats’ biggest losses in the 2020 election came in “factory town” counties with smaller cities that traditionally relied on manufacturing employment — counties that account for 40% of all voters. Across 10 states in the Midwest and Northeast that comprise the fading heart of America’s former manufacturing hubs, Democrats lost 2.6 million votes between Obama’s election in 2012 and Biden’s in 2020. That is a million more votes than Democrats gained in those states’ cities and suburbs. In other words, across vital battleground states like Ohio, Wisconsin, Pennsylvania and Minnesota, the Democratic Party is most vulnerable in the very places that have been most acutely devastated by the decline of American manufacturing jobs over the past two decades.
But this is not just a typical story of economic hopelessness. It is, more accurately, a story of the decline of the power of organized labor. Because the report finds that more than 90% of the decline in union members that the United States suffered between 2010 and 2020 was focused in nine of the states studied. “On average, our nine states lost 10% of their union membership over 10 years — a rate three times greater than the U.S. average,” the report finds. So, within the very swing states that the Democratic Party needs to win to hold onto the White House, the institution of union membership is crumbling faster than anywhere else in the country.
Trivially, this decline is due to the familiar Republican legal and regulatory and economic attacks on organized labor, like “right to work” laws that make it harder to organize and maintain unions. That is true, as far as it goes. But it is not the message that the political class should take away from this.
For the labor movement, the story here is that as traditionally unionized manufacturing jobs disappeared, unions failed to organize the next set of (worse) jobs that rose up to take their place in these left-behind towns. Global capitalism is a fearsome beast. Reining in the post-NAFTA decimation of the U.S. manufacturing economy is a job that will require institutions bigger than unions. What unions can do, and must do, and have not done, is to focus at all times on the working people themselves. If the factories leave, and people go work at the Dollar General, then unions need to unionize the Dollar General. That has absolutely not been done. Nor has it even been attempted on any reasonable scale. Workers in these devastated areas live in the economy of 2021, and unions are still living in the economy of 1970, in their own minds. It is fine to fight as hard as possible to retain good union jobs. But if you lose them, you still need to organize the people who are left behind. Wake the fuck up and build the next generation of unions in these places. The labor movement is very, very late to this job.
And for the Democrats, the lesson here is that seeing unions as a simple interest group that exists to provide money and door-knockers to the Democratic Party is a losing proposition. Prior to Biden, the post-Reagan Democratic presidents have mostly assumed that since they weren’t actively persecuting unions like Republicans were, that was enough. Wrong. The Democratic Party has a direct interest in therebuilding of the labor movement. If it is not actively assisting unions (with more than words) in the project of organizing millions and millions of workers who have been left behind in our modern Amazonified capitalist world, it is idiotically fiddling while its base burns. A strong and vibrant and well-functioning union can be the difference between a laid-off factory worker becoming an advocate for a progressive world, or falling into a MAGA pit.
The union losses in these factory towns have hit hard. These were often unions that have deep roots in the community. They were institutions. They were part of the social and political fabric of those cities. They served as the safety net that picked up where the government’s broken safety net failed. By allowing the closure of factories to result also in the permanent erasure of strong unions, we have condemned these communities twice over. Not only have they lost their jobs; they have lost their collective security, right when they need it most.
The good news is that broad investment in union organizing can pay more dividends than political pundits even suspect. Yes, unions raise wages and improve benefits and workplace safety and generally provide direct positive economic impacts that are sorely needed. Beyond that, though, the process of organizing new unions is also one that transforms people themselves. It is often the only real demonstration of the power of solidarity and democracy that anyone will ever personally experience. The qualities instilled by union organizing campaigns tend to give working people a way to see the world that aligns with broadly progressive values: Unity with everyone, equality, fighting for justice against the rich. The Democratic Party — especially the worthwhile part of the Democratic Party — needs people to believe these things, if it is going to build a lasting majority. And far more importantly, humans need these things, to survive and thrive.
Unions have a lot of work to do. Get to organizing, or we all keep sinking together.
Hamilton Nolan is a labor reporter for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. You can reach him at Hamilton@InTheseTimes.com.
Wednesday, October 13, 2021
What is the Cost of Cutting the Stimulus Bill BBB ?
Cutting the Reconciliation Bill to $1.5 Trillion Would Support Nearly 2 Million Fewer Jobs per Year
Congress may have bought itself another month to negotiate over the Biden-Harris administration’s Build Back Better (BBB) agenda, but one thing is clear: Further reducing the scale and scope of the budget reconciliation package unequivocally means the legislation will support far fewer jobs and deliver fewer benefits to lift up working families and boost the economy as a whole.
How much will such compromise cost the U.S. economy? We crunched the numbers to find out what compromising on the BBB plan will mean for every state and congressional district in the United States. If the budget reconciliation package is cut from $3.5 trillion to $1.5 trillion—as Senator Joe Manchin (D-WV) has called for—nearly 2 million fewer jobs per year would be supported.
In a previous analysis, we showed that the BBB agenda—combining the Bipartisan Infrastructure Framework and the proposed $3.5 trillion budget reconciliation package—would support more than 4 million jobs annually. It would also make critical investments that would deliver relief to financially strained households, raise productivity, and dampen inflation pressures to enhance America’s long-term economic growth prospects. David Brooks, the center-right New York Times columnist, recently captured the significance of these initiatives when he wrote that these are “economic packages that serve moral and cultural purposes. They should be measured by their cultural impact, not merely by some wonky analysis. In real, tangible ways, they would redistribute dignity back downward.”
Senators Manchin and Kyrsten Sinema (D-AZ) are intent on scaling back Build Back Better’s purpose. While Sen. Sinema has not publicly staked a position outlining her objections, Sen. Manchin has telegraphed a top-line spending figure of $1.5 trillion as the maximum he would support.
The $2 trillion gap left by Manchin’s proposal cuts far deeper than any of the policy specifics he proposes eliminating. Even if he succeeded in eliminating all climate-related funding in the BBB agenda budget resolution, for example, Manchin’s plan would still fall nearly $1.8 trillion short. Thus, for the purpose of our analysis, it makes most sense to assume that hewing to Sen. Manchin’s demands would mean a proportional cut across all of the BBB agenda’s individual initiatives (more on the methodologies used here and here).
Besides delivering fewer tangible benefits to typical families, scaling back Build Back Better also severely compromises the package’s value as macroeconomic insurance against recovery waning in the coming years.
Absent the Build Back Better package, there is no guarantee of robust growth once the provisions of the American Rescue Plan—enacted in March of this year—begin fading out in earnest in mid-2022. The U.S. economy is not out of the woods yet. In past instances, policymakers have too often erred on the side of withdrawing fiscal support too early, resulting in protracted recoveries and prolonged spells of elevated unemployment, which ultimately undercut America’s future economic potential. The BBB package would counter a potential slump and effectively support millions of jobs, especially if a host of plausible scenarios occur, including:
- if private spending fails to sustain growth after the American Rescue Plan fades;
- if the pandemic evolves and continues weighing on economic activity;
- or if other unforeseen shocks to the economy emerge and threaten a robust recovery.
Scaling back the plan now, as Sens. Manchin and Sinema would like, will support millions fewer than the original package. In total, Sen. Manchin’s proposal would support nearly 1.9 million fewer jobs per year than the Build Back Better agenda. Full results for each state and congressional district can be downloaded here and in the figures and table below.
- Every state and Washington, D.C. would see fewer jobs supported under Sen. Manchin’s proposal than the BBB agenda. The largest states would experience the largest absolute losses in jobs potential. California would see 211,853 fewer jobs per year, while Texas, New York, and Florida would see 149,050, 116,584, and 106,205 fewer jobs per year, respectively.
- West Virginia would see 9,880 fewer jobs annually under Manchin’s plan, equivalent to 1.33% of the state’s overall employment. West Virginia would be no better off in terms of jobs in fossil fuel industries, but would see 900 fewer manufacturing jobs, 400 fewer construction jobs, and 3,800 fewer health care and social assistance jobs.
- Arizona would see 35,564 fewer jobs per year, equal to 1.17% of state employment, including 2,500 fewer manufacturing jobs, 1,600 fewer construction jobs, and 11,400 fewer health care and social assistance jobs.
- Alaska would be most impacted by fewer jobs under Manchin’s proposal relative to the size of its economy, losing out on jobs equivalent to 1.39% of its total employment, but all states and DC would forego more than 1% of total employment.
- All congressional districts will see fewer jobs supported under Manchin’s proposal than under the BBB plan, ranging from 0.9 to 1.5% fewer jobs supported as a share of overall district-level employment.
- Districts represented by so-called moderate House Democrats would take material hits to jobs under Manchin’s plan relative to the BBB reconciliation plan. Rep. Josh Gottheimer’s (D-NJ 5th) would see support for 7,700 fewer jobs per year in his district under Manchin’s proposal and Rep. Stephanie Murphy (D-FL 7th) would see 7,600 fewer jobs. Altogether, the bloc of 10 moderate Democratic members would see 70,700 fewer jobs supported across their districts relative to the BBB plan.
- Manchin and Sinema have become linchpins in this legislative negotiation to a large extent because of an ideological hollowing out of the “center” of Republican party officials. Supposedly moderate Senate Republicans would not even entertain engagement over the broader Biden-Harris economic agenda, but their constituencies, too, would be worse off under Sen. Manchin’s proposal to cut the BBB agenda.
- Maine would see 8,300 fewer jobs supported per year, or 1.3% of state employment.
- Utah would see 16,600 fewer jobs per year.
- Ohio would miss out on economic support for an additional 71,900 jobs annually.
TABLE 1
Jobs impact of Democratic budget reconciliation plans by state, jobs supported per year
| Build Back Better Plan | Manchin Budget Reconciliation Proposal | Reduction in jobs supported | Reduction in jobs supported as share of state employment | |
|---|---|---|---|---|
| All states | 3,246,675 | 1,391,432 | -1,855,243 | |
| Alabama | 44,976 | 19,275 | -25,701 | -1.24% |
| Alaska | 8,548 | 3,663 | -4,885 | -1.39% |
| Arizona | 62,236 | 26,673 | -35,564 | -1.17% |
| Arkansas | 28,746 | 12,320 | -16,426 | -1.27% |
| California | 370,742 | 158,889 | -211,853 | -1.16% |
| Colorado | 56,903 | 24,387 | -32,516 | -1.15% |
| Connecticut | 38,885 | 16,665 | -22,220 | -1.23% |
| Delaware | 9,647 | 4,134 | -5,513 | -1.22% |
| District of Columbia | 8,825 | 3,782 | -5,043 | -1.37% |
| Florida | 185,859 | 79,654 | -106,205 | -1.15% |
| Georgia | 97,452 | 41,765 | -55,687 | -1.18% |
| Hawaii | 14,283 | 6,121 | -8,161 | -1.20% |
| Idaho | 16,466 | 7,057 | -9,409 | -1.22% |
| Illinois | 132,647 | 56,849 | -75,798 | -1.22% |
| Indiana | 68,482 | 29,350 | -39,133 | -1.24% |
| Iowa | 35,465 | 15,199 | -20,266 | -1.26% |
| Kansas | 30,464 | 13,056 | -17,408 | -1.22% |
| Kentucky | 43,092 | 18,468 | -24,624 | -1.26% |
| Louisiana | 42,474 | 18,203 | -24,271 | -1.19% |
| Maine | 14,500 | 6,214 | -8,286 | -1.25% |
| Maryland | 71,815 | 30,778 | -41,037 | -1.34% |
| Massachusetts | 77,440 | 33,188 | -44,251 | -1.24% |
| Michigan | 100,904 | 43,244 | -57,659 | -1.25% |
| Minnesota | 65,278 | 27,976 | -37,302 | -1.27% |
| Mississippi | 27,529 | 11,798 | -15,731 | -1.28% |
| Missouri | 63,046 | 27,020 | -36,026 | -1.25% |
| Montana | 10,960 | 4,697 | -6,263 | -1.23% |
| Nebraska | 21,229 | 9,098 | -12,131 | -1.22% |
| Nevada | 24,892 | 10,668 | -14,224 | -1.04% |
| New Hampshire | 15,802 | 6,772 | -9,030 | -1.25% |
| New Jersey | 89,528 | 38,369 | -51,159 | -1.17% |
| New Mexico | 19,343 | 8,290 | -11,053 | -1.25% |
| New York | 204,022 | 87,438 | -116,584 | -1.23% |
| North Carolina | 100,323 | 42,996 | -57,327 | -1.23% |
| North Dakota | 9,062 | 3,884 | -5,178 | -1.29% |
| Ohio | 125,737 | 53,887 | -71,850 | -1.29% |
| Oklahoma | 38,860 | 16,654 | -22,206 | -1.26% |
| Oregon | 42,876 | 18,376 | -24,501 | -1.27% |
| Pennsylvania | 137,632 | 58,985 | -78,647 | -1.28% |
| Rhode Island | 11,573 | 4,960 | -6,613 | -1.25% |
| South Carolina | 48,136 | 20,630 | -27,507 | -1.23% |
| South Dakota | 9,961 | 4,269 | -5,692 | -1.29% |
| Tennessee | 66,869 | 28,658 | -38,211 | -1.25% |
| Texas | 260,838 | 111,788 | -149,050 | -1.15% |
| Utah | 28,985 | 12,422 | -16,563 | -1.14% |
| Vermont | 7,299 | 3,128 | -4,171 | -1.27% |
| Virginia | 91,427 | 39,183 | -52,244 | -1.27% |
| Washington | 72,508 | 31,075 | -41,433 | -1.18% |
| West Virginia | 17,290 | 7,410 | -9,880 | -1.33% |
| Wisconsin | 68,900 | 29,529 | -39,372 | -1.33% |
| Wyoming | 5,919 | 2,537 | -3,382 | -1.16% |
Source: Authors’ analysis of U.S. Census Bureau 2019a and 2020a, and Bureau of Labor Statistics Employment Projections program 2019a and 2019b. For a more detailed explanation of data sources and computations, see Hersh (2021) and Scott and Mokhiber (2020).
Adam Hersh joined EPI in 2021, bringing a wide range of research interests from the interrelationship between growth and inequality, to global economic governance, Chinese industrial policy and reform, and climate change.
Why Some Workers are Staying Home- and Others on Strike
L Friday’s jobs report from the US Department of Labor elicited a barrage of gloomy headlines. The New York Times emphasized “weak” jobs growth and fretted that “hiring challenges that have bedeviled employers all year won’t be quickly resolved,” and “rising wages could add to concerns about inflation.” For CNN, it was “another disappointment”. For Bloomberg the “September jobs report misses big for a second straight month”.
The media failed to report the big story, which is actually a very good one: American workers are now flexing their muscles for the first time in decades.
You might say workers have declared a national general strike until they get better pay and improved working conditions.
No one calls it a general strike. But in its own disorganized way it’s related to the organized strikes breaking out across the land – Hollywood TV and film crews, John Deere workers, Alabama coal miners, Nabisco workers, Kellogg workers, nurses in California, healthcare workers in Buffalo.
Disorganized or organized, American workers now have bargaining leverage to do better. After a year and a half of the pandemic, consumers have pent-up demand for all sorts of goods and services.
But employers are finding it hard to fill positions.
Last Friday’s jobs report showed the number of job openings at a record high. The share of people working or actively looking for work (the labor force participation rate) has dropped to 61.6%. Participation for people in their prime working years, defined as 25 to 54 years old, is also down.
Over the past year, job openings have increased 62%. Yet overall hiring has actually declined.
What gives?
Another clue: Americans are also quitting their jobs at the highest rate on record. The Department of Labor reported on Tuesday that some 4.3 million people quit their jobs in August. That comes to about 2.9% of the workforce – up from the previous record set in April, of about 4 million people quitting.
All told, about 4 million American workers have been leaving their jobs every month since the spring.
These numbers have nothing to do with the Republican bogeyman of extra unemployment benefits supposedly discouraging people from working. Reminder: the extra benefits ran out on Labor Day.
Renewed fears of the Delta variant of Covid may play some role. But it can’t be the largest factor. With most adults now vaccinated, rates of hospitalizations and deaths are way down.
My take: workers are reluctant to return to or remain in their old jobs mostly because they’re burned out.
Some have retired early. Others have found ways to make ends meet other than remain in jobs they abhor. Many just don’t want to return to backbreaking or mind-numbing low-wage shit jobs.
The media and most economists measure the economy’s success by the number of jobs it creates, while ignoring the quality of those jobs. That’s a huge oversight.
Years ago, when I was secretary of labor, I kept meeting working people all over the country who had full-time work but complained that their jobs paid too little and had few benefits, or were unsafe, or required lengthy or unpredictable hours. Many said their employers treated them badly, harassed them, and did not respect them.
Since then, these complaints have only grown louder, according to polls. For many, the pandemic was the last straw. Workers are fed up, wiped out, done-in, and run down. In the wake of so much hardship, illness and death during the past year, they’re not going to take it anymore.
In order to lure workers back, employers are raising wages and offering other inducements. Average earnings rose 19 cents an hour in September and are up more than $1 an hour – or 4.6% – over the last year.
Clearly, that’s not enough.
Corporate America wants to frame this as a “labor shortage.” Wrong. What’s really going on is more accurately described as a living-wage shortage, a hazard pay shortage, a childcare shortage, a paid sick leave shortage, and a healthcare shortage.
Unless these shortages are rectified, many Americans won’t return to work anytime soon. I say it’s about time.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com