Our Employment Problem Demands New Solutions
By Pete Moss
Special to The Pilot
Any discussion of employment in America is fruitless without a good sense of history.
The ferocious contemporary debate about job creation takes place in a vacuum and is so highly politicized that it gets nowhere. All we get are vague promises to create jobs.
Why do people work? There are many answers to this question, but most would agree that individuals work to survive and to establish personal independence. In early America, survival and independence were based on land ownership and making a living from the land. And, of course, the New World offered Europeans vast amounts of cheap or free fertile land.
Quickly the dependent relationship between European lord and peasant eroded, and during the 17th and 18th centuries a new sort of person evolved. This independent freeman became the defining character in the American Colonies and the main actor in the American Revolution.
On the dark side, some agricultural opportunities required vast amounts of labor. You could get rich raising tobacco and rice, but land-owning freemen did not wish to work for others. The solution was, of course, a labor system that worked well for the large landowners in the South and not so well for the Africans who were victimized by it.
It is important to remember that our revolution was carried out and that our fundamental political institutions were shaped in a world where work was defined by the deeply conflicted institutions of widespread land-owning and slavery.
America was born in a time profoundly defined by a persistent shortage of labor. This shortage benefited the freemen and oppressed the slaves. However, by the second quarter of the 19th century, this situation began to change. Driven by labor shortages, Americans - long before the Europeans - turned to technology, mechanization and the principles of mass production.
Machines would replace human labor in agriculture and in the skilled crafts. Hats were once made individually by the skilled hands of people called hatters. Now they are made in the millions by machines. The skilled craftsmen who made them have disappeared.
Only well-financed stock corporations could afford the massive investments that mass production required. Only corporations could elicit massive subsidies from the government in the form of tariffs to protect infant industries and huge land grants to the railroads. Without government help, the industrialization of America in the late 19th century would have been slower and very different in form.
The America that evolved from industrialization was no longer based on the land-owning freeman. Work was redefined in almost every way. A dwindling number of Americans worked for themselves. Instead, what we think of as the factory job moved to center stage. Huge corporate enterprises like the auto industry redefined work.
The laborer was the servant to the mechanized mass production system, and the leaders of these new corporations had one overriding purpose: replace labor with a technological solution. Since World War II, this process of replacing laboring people with laboring machines (computers are machines even if they talk to us) has been profoundly reshaping America.
While a technological revolution was transforming America, a social revolution was dramatically changing the work force. Particularly after 1970, women entered the work force in huge numbers, thereby enlarging the work force and increasing the competition for especially white-collar jobs. Today, almost 45 percent of family income is earned by women.
As if this were not daunting enough, globalization and free trade made moving jobs out of the United States very profitable. Americans now compete with virtually every worker on the planet.
So as America entered a new century, it was being reshaped by an ongoing technological revolution, by the entry of women into the work force, and by millions of eager workers in low-wage countries. Simply put, the labor pool was massively enlarged just as technology was reducing the number of jobs.
These three factors benefited large corporations, whose profits were based upon huge increases in worker productivity. Beginning in the 1980s, the wages paid to middle-class workers flatlined. By 2005, they were actually declining.
How did average Americans respond? They sought to maintain their standard of living by taking on debt. Until the crash of 2008, they took advantage of loose credit card policies and the boom in housing prices to maintain their high level of consumption. In 2008, saddled with massive personal and governmental debt, the American economy collapsed.
There is no going back to an earlier time. The American political system has to invent and promote a solution to the employment problem that is fundamentally new.
Pete Moss is a retired history professor who lives in Pinehurst.
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