Thursday, June 20, 2013

Middle class jobs: it can be better.

Walter Russell Mead
We know the economy isn’t creating jobs fast enough to help the American middle class. Also, progressive guru Paul Krugman tells us a job-killing information economy will force the middle class to depend instead on “guaranteed income.”

It’s time for some optimism.  It’s time for Walter Russell Mead, who takes on Krugman’s bleak dystopia of a nation that:
would start looking more like California and New York City: unbridgeable class divides, huge inequality, fountains of innovation, and tiny islands of great wealth and privilege surrounded by proles on the dole. [emphasis added]  Inside the glittering bubble, the digirati and their courtiers would live lives of intense purpose and excitement. . . To have a life where your work means something and your hands help steer the world would be the exclusive privilege of a tiny handful of enlightened, intelligent, and energetic people.
And outside the bubble:
as in the public housing projects and other warehouses where we store “surplus” people today, the most acute form of poverty and deprivation will not be the lack of food, clothing or even shelter. It will be a lack of social connection, of independence founded on achievement, on the human dignity that comes from doing work. Bellies will be full, but lives will be empty, and with that emptiness will come ills of every kind: addiction, brutality, ugly, and stunted sexual and emotional lives for many, neglect of the young and the old.
California. New York City. How about Latin America, the traditional hacienda world of a small wealthy class surrounded by a sea of peons? Latin America is making progress, yet all Latin America is still more unequal than the U.S. But with the haciendaization of our nation, for how long?

In contrast to Krugman’s bleak nation, Mead sees:
The information revolution . . . raising productivity in manufacturing as well as in data processing. [While a] labor surplus is depressing wages or keeping them from rising. . .prices are also stagnant or even falling for many of the things we need most.  Anything having to do with information processing and computers is getting cheaper and better. . .this creates . . . an opportunity to build something new. . . to launch new businesses and careers meeting human needs . . .
previous versions of America’s prosperous middle class economies rested on a creative mix of far-sighted government policy and private initiative. . . people still want to make a living and to improve their situation in life. If the opportunities are there, the people will move.
Mead, an ex-New Deal-type liberal, provides activist “do something” policy recommendations:  

First, make hiring easy and cheap.
Jobs policy today must also be about small business policy and about promoting and facilitating entrepreneurialism. . . we must lay the foundations of the industries and jobs of the future. Today’s employment policy descends from the . . . industrial age when most jobs came from large, well established corporations and jobs were often for life. Making retirement, health care and social insurance dependent on employers [today makes] it harder for start ups to hire people. . . the employer’s share of social insurance should be partly or wholly paid by the government out of general tax revenues. . . Aid can be targeted more effectively to low income workers.
Second, put . . . small business and entrepreneurship front and center. 
better credit conditions for individual businesses and small, service-focused enterprises[; an] educational system [that teaches] kids to be more creative and entrepreneurial, with less emphasis on order, conformity and moving in lockstep through the grades[; a g]overnment . . . legal and regulatory landscape [favorable to] small business. . . we need thinkers, tinkerers, and inventors who can find thousands of new uses for the extraordinary tech and software capabilities pouring into our world.
Third, we need to feed the state to the people even as we individualize its services.
[turn] bureaucratic government institutions into voucher-based programs will both stimulate the rise of a new type of service-oriented industry and provide better[, cheaper] government services. . . the charter school and school voucher movement. . . [U]nemployed. . . have the choice of which firm would both process your benefits and help you find new work. . . grandma becomes disabled and is entitled to insurance or Medicare payments, perhaps her family should be able to offer those services themselves.
In sum, Mead believes
Giving people more control over their lives, encouraging greater creativity and initiative in the provision of necessary social services and shifting from the top down bureaucratic structures of the industrial age to the more flexible and effective methods of the new era will help us create new jobs, new industries and new ways of thinking about how people interact with the state and with the economy[, creating a] more deeply human society.

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