Saturday, January 1, 2011

The New American Reality for Jobs

When you have a government that says "you are on your own" then recessions are times when you are forced to tighten your belt. But not those who held a job through the recession. They get to party on. Instead, the "invisible hand" of the marketplace is a blind actor who dispenses injustice easily and silently and leaves the victims alone to blame themselves.

Here is a bit from an article in the NY Times about those who lost their jobs post-2008:
A new study of American workers displaced by the recession sheds light on the sacrifices a large number have made to find work. Many, it turns out, had to switch careers and significantly reduce their living standards.

“In many cases, these people are not very happy,” said Cliff Zukin, professor of public policy and political science at Rutgers University and one of the authors of the study. “They’re the winners who got new jobs, but they’re not really what they want, and not where they want to be.”


As of November 2010, only about one-third had found replacement jobs, either as full-time workers (26 percent) or as part-time workers not wanting a full-time job (8 percent).

And of those who successfully found work, 41 percent had switched into a new career or field.

Some of these may have been workers who retrained for new fields they wished to enter, but many seem to have taken their new jobs out of desperation. Only a minority of those displaced workers changing careers — 22 percent — said they had taken a class or a training course before finding their new job.


Nearly 7 in 10 of the survey’s respondents who took jobs in new fields say they had to take a cut in pay, compared with just 45 percent of workers who successfully found work in their original field.

Of all the newly re-employed tracked by the Heldrich Center, 29 percent took a reduction in fringe benefits in their new job. Again, those switching careers had to sacrifice more: Nearly half of these workers (46 percent) suffered a benefits cut, compared with just 29 percent who stayed in the same career.
Go read the whole article to get all the gory details.

Oh, and a society with no safety net means that people get to double up in their housing, move back with parents, or bring homeless parents into the child's home. Read all about it in the NY Times:
Of the myriad ways the Great Recession has altered the country’s social fabric, the surge in households like the Maggis’, where relatives and friends have moved in together as a last resort, is one of the most concrete, yet underexplored, demographic shifts.

Census Bureau data released in September showed that the number of multifamily households jumped 11.7 percent from 2008 to 2010, reaching 15.5 million, or 13.2 percent of all households. It is the highest proportion since at least 1968, accounting for 54 million people.

Even that figure, however, is undoubtedly an undercount of the phenomenon social service providers call “doubling up,” which has ballooned in the recession and anemic recovery.
This is what you get when you elect right wingers who proclaim that "the market knows best" and that the market is just and fair and gives those who work hard and have talent the best reward. In fact, the "market" is almost random in who it rewards and punishes. But ideology blinds those who sell the kool-aid of homo economicus and the idea that we live only for money devoid of any sociability or human relationships.

Americans have been busy with trickle-down economics and deregulating and shrinking government, so they are now lean, mean, and obviously happy to see their co-citizens reduced to penury and unhappiness. This is proof positive that the world is unfolding as it should be. Thank God for the "free market", the holy manna provided from on high to the true believers of America!

If you want to understand why buying into this belief in homo economicus is wrong-headed. You might be interested in Robert Paul Wolff's short course on "Formal Methods in Political Philosophy":
The defining characteristic of capitalism is the reduction of all human activity to market relations. Too often, Rational Choice Theory functions as a covert and seductive rationalization of the capitalist ethos, which then seems, because of the apparent neutrality of the formalism, to be equivalent to rationality tout court.
And this...
A similar problem arises when we are trying to compare different social distributions of wealth. If Situation B offers everyone more wealth than Situation A, then we can be pretty sure there will be unanimous agreement that B is better than A. Indeed, if people are willing not to be envious of what others get, then we might be able to secure unanimity for the proposition that B is better than A if B offers everyone at least as much as A does, and offers at least one person more. [Why begrudge her the extra if it isn't coming out of your share?] But what about the case in which B makes some people better off and others less well off than they were in A? There may just be no answer in that case.

Thanks to Vildredo Pareto [1848 - 1923], when B makes everyone better off than they were in A, we say that B is Pareto Preferred to A. Obviously, if B is Pareto Preferred to A and C is Pareto Preferred to B, then we should expect that C will be Pareto Preferred to A. So this Pareto or Unanimity ordering is transitive but not complete. If some way of distributing things is such that there is no alternative distribution that is Pareto Preferred to it, then we say that it is Pareto Optimal. Don't be misled by the enticing sound of the word "optimal." If we assume that everyone has positive marginal utility for money, so that taking even a little bit away from someone makes her less well off, then a social distribution that gives everything to one man and nothing at all to anyone else is Pareto Optimal, because any re-distribution will involve making at least one person worse off, namely the person who had everything and now has slightly less. In case you are wondering why this matters, I will just point out that when economists describe a market as efficient, they mean that it produces a Pareto Optimal outcome. Not too heart warming.
The course may seem intimidating, but it is accessible to almost everybody if you ignore the stuff you don't understand on first reading and go back from time to time to re-read and finally master what he is trying to say. (Oh, and use Google to help you with unfamiliar terms.)

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