Why do Americans worker harder with longer hours than in other developed countries? And why is America’s income inequality the worst in the developed world?
Both questions can be quickly encapsulated by NY Times’ columnists Bret Stephens and Gail Collins in a back and forth Q&A opinion column.
To Gail Collins question whether Stephens was still enthusiastic about Joe Biden’s big spending initiatives, he said he liked most of them, but:
“…the program I most oppose is the child tax credit, which sounds like liberal nirvana but would be difficult to administer and has no work requirements, which effectively reverses the gains the country made after Bill Clinton’s welfare reform. I’m also not too fond of the huge Medicare expansion, another noble-sounding effort that will further push a financially strained program toward insolvency.”
Stephens in this case repeats the conservative mantra that government-paid benefits strain the taxpayers’ coffers, and discourage work. But in reality, he is parroting conservatives’ opposition to any public spending that grows government programs, which is the reason Americans have been deprived of the welfare benefits of other developed countries—e.g., universal health care, paid family leave, a livable minimum wage, and nationally mandated paid vacations.
Denmark is probably the best example of what modern technology has enabled to ease the workloads of working folk, with its $20 per hour minimum wage and 33-hour average work week.
Whereas, according to NY Times guest columnist Bryce Covert, “Prepandemic, nearly a third of Americans clocked 45 hours or more every week, with around 8 million putting in 60 or more. While Europeans have decreased their work hours by about 30 percent over the past half century, ours have steadily increased.”
There is no secret where the increased wealth generated by modern technology has gone in the US; to the owners of capital—stock holders, CEOs, and financial entities that hold their debt—rather than wage-earning employees.
Why? It has been outright wage suppression since the 1980s, at least, as the Federal Reserve under Paul Volcker fought any form of incipient inflation by tightening credit, which largely suppressed wage growth while Big Business began its lobbying campaigns to enact anti-labor legislation that weakened unions’ collective bargaining efforts.
Much of the anti-government rhetoric came under the guise that government was less efficient in producing overall wealth than the private sector. The pandemic is also bringing another problem to light that requires more government oversight—more work from home in an expanded ‘gig’ economy.
Steven Hill in an article for Project Syndicate, says “According to an April 2020 survey in the United States, 74% of companies are planning to “shift some employees to remote work permanently.” Similarly, a May 2020 analysis by researchers at the Federal Reserve Bank of Atlanta found that companies expect the share of working days spent at home to increase threefold, with many employees operating remotely 1-3 days per week.”
Working from home or other sites away from the office will hurt employees in so many ways without a government that clearly defines these new working conditions—because it blurs the line between regularly employed workers with clearly defined benefits and independent contractors that must provide their own safety net (e.g., healthcare, hours worked), for starters.
What does all this ultimately lead to? More work will be performed by algorithms and robots, of course, which can easily be trained to perform repetitive, predictable tasks.
“Historically, researchers have found that automation is adopted faster during economic downturns, and the COVID-19 recession was no exception. At the height of the crisis in advanced economies, the bots appeared to be making major advances,” says Hill.
“The net effect of this technological adoption over time will be to render more humans obsolete. Yes, some experts predict that new jobs will be created to service the robots and artificial-intelligence (AI) systems. But whether those jobs will be as numerous, pay as much, or be of the same quality as previous jobs remain open questions.“
So we have it in a nutshell. America will have to find new ways to benefit workers in this new economy, as other developed countries are doing—i.e., with the help of their governments working for them, rather than for Big Business.
Harlan Green © 2021
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