If there’s an oh-so-contrarian thesis that really grates right now, it’s the one that businesses just can’t seem to find workers, despite the fact that millions of people are out of work.
The “can’t find workers” thing has become something of a chestnut in the American press in this recession, so maybe it will help to look how strange it seems when applied to another country.
Dean Baker pointed to a good example the other day, dinging The New York Times for an article that says Germany is in trouble because unemployment hit its lowest point in eighteen years—so low that its businesses can’t find workers.
For most of those eighteen years we’ve heard that Germany was the Sick Man of Europe, that its high unemployment rate showed the perils of a generous welfare state and strict labor laws. We must let the market work! Now that the unemployment rate is down a couple of points, we’re told that that the country doesn’t have enough labor. We must not let the market work! (unless the Germans let in a bunch of cheap foreign labor).
As Baker points out, a low unemployment rate is good for workers. It’s the market at work: More demand for labor pushes up workers’ pay. That makes owners nervous: Might cut into their profit margins a bit. And I’m not going to tell you that’s not a story. It is: Owners Are Worried Tight Labor Markets Will Squeeze Profits. But even with that frame you’d want to talk to a worker or two.
The Times doesn’t bother here. Baker, that wag, puts it this way:
The NYT Can’t Find Anyone In Germany Who Is Not an Employer
Indeed, there are none quoted here. Here’s every source in the piece: nursing-home boss, the consulting firm McKinsey (notoriously labor friendly), Germany’s leading high-tech business organization, the head of another trade organization, the Federal Statistics Office, the chief regional economist for the European Bank for Reconstruction and Development, and the chief operating officer of Accor Germany. The only source quoted who might be partial to workers is the director of the Labor Market Institute at the Federal Labor office, but even he’s a technocrat manager with a payroll (And for all I know about Germany’s government, he could be another Elaine Chao)
That’s a long way of saying Baker’s right: There’s not a single worker, much less a union official, quoted here.
And the NYT writes this line without backing it up:
While a jobless rate in single digits would be cause for celebration in many countries, in Germany it is the sign of a critical lack of workers.
How and why is it a sign of a critical lack of workers? We’re not told.
Indeed, nowhere in the story does the Times bother to tell readers what the actual German unemployment rate is: 7.4 percent. Why is 7.4 percent unemployment a looming disaster for German employers? Recall that before the recession started, U.S. unemployment was 4.6 percent. Even that wasn’t enough to raise the median wage.
Why does a 7.4 percent jobless rate means a super-tight labor market in Germany, while here in the U.S. it’s evidence of a real unemployment problem. Does Germany count differently somehow? Are there structural differences? The Times doesn’t say.
The Times’s lede anecdote, oddly enough, leads us to infer that Germany may have a wages issue:
Dana Russow longs for the day when she will not have to worry about staffing problems.
“It’s not easy finding qualified staff to take care of the elderly,” said Ms. Russow, 41, director of Residenz Zehlendorf, a privately owned nursing home in southwest Berlin. “This profession has such a low status in Germany.”
The low pay does not help, either: Staff members earn the minimum wage of 8.50 euros, or $11.60, an hour.
But even then the paper doesn’t make the obvious connection between a tighter labor market and increasing pay.
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You're a breath of fresh air today, Ryan. (still want to see you tackle the FCIC report, but man this reporting is long in coming)
The reason why you won't get this reporting often is because employees making decent livings in a full employment economy with a solid safety net cause INFLATION.
And whether some believe that demand side inflation is the end of civilization or whether they believe that inflation fears are just a good means of bashing labor and consolidating wealth, the outcome is the same.
Solutions that allow the labor market to operate orderly and assign value to work as the market sees fit will not be considered because of INFLATION.
Nobody ever worries about deflation. Nobody ever worries about global warming. Nobody ever worries about decayed infrastructure and 50 year old plumbing systems operating well beyond their replace by dates.
INFLATION is more important (but not more important than tax cuts). We are led by stupid people.
And of course, 5 minutes into this vid
http://www.youtube.com/watch?v=qOP2V_np2c0
David Harvey explains how we've spent the last 40 years solving an excessive power of labor problem that was solved 30 years ago, but that doesn't mean we're not still fixated on it, still trying to use the same anti-labor solutions (break unions, import labor, etc) to fix problems that have nothing to do with labor.
The same happened in Japan. Japanese industry was built on the Edwards Deming system which empowered labor, rewarded skill and quality, attained a level of well being unheard of in Asia - never mind a small country with limited materials which had been bombed out and nuked once or twice. Japan used the TQM model to rebuild the whole country until a massive bubble popped in the 1990s.
I talk to people in Japan and only old industrialists remember the Deming Prize. Nobody remembers Kaizen (Japan's take on the Deming model). That system was dismantled and dissolved from public consciousness in 2 decades.
http://old.japanfocus.org/_Ronald_Dore-Japan_s_New_Miracle_Economy__Neoliberalism_and_the_Poverty_of_Wealth
Dore called it Anglo-Saxon capitalism, I call it the willful forgetting of demand side knowledge and the value of a stable middle class. It's easy to understand why we are forgetting it, the event that caused us to learn it happened near a hundred years ago - and it was depressing.
It's much more entertaining to forget history and learn things the fun way.
#1 Posted by Thimbles, CJR on Wed 9 Feb 2011 at 10:19 AM
"That’s a long way of saying Baker’s right: There’s not a single worker, much less a union official, quoted here."
Kevin Drum does a story on labor that touches on the decline of union culture and their drift from political representation in the democrats and media representation in the papers
http://motherjones.com/politics/2011/02/income-inequality-labor-union-decline
"ABOUT A YEAR ago, the Pew Research Center looked looked at the sources reporters used for stories on the economy. The White House and members of Congress were often quoted, of course. Business leaders. Academics. Ordinary citizens. If you're under 40, you may not notice anything amiss. Who else is missing, then? Well: "Representatives of organized labor unions," Pew found, "were sources in a mere 2% of all the economy stories studied."
It wasn't always this way. Union leaders like John L. Lewis, George Meany, and Walter Reuther were routine sources for reporters from the '30s through the '70s. And why not? They made news. The contracts they signed were templates for entire industries. They had the power to bring commerce to a halt. They raised living standards for millions, they made and broke presidents, and they formed the backbone of one of America's two great political parties.
They did far more than that, though. As historian Kim Phillips-Fein puts it, "The strength of unions in postwar America had a profound impact on all people who worked for a living, even those who did not belong to a union themselves." (Emphasis mine.) Wages went up, even at nonunion companies. Health benefits expanded, private pensions rose, and vacations became more common. It was unions that made the American economy work for the middle class, and it was their later decline that turned the economy upside-down and made it into a playground for the business and financial classes."
The whole is a good read, even though it reminds us of what we've lost over the last 30 years and what Wisconsin, at the very least, is not likely to get back:
http://news.firedoglake.com/2011/02/22/wisconsins-walker-signs-bill-requiring-23-majority-for-tax-increases/
#2 Posted by Thimbles, CJR on Wed 23 Feb 2011 at 07:23 AM