You: doing more with less. Corporate profits: going strong. The dirty secret of the jobless recovery.
By Monika Bauerlein and Clara Jeffery
Enjoy this read, it is very important that you read this and click ALL the links so you can go to Mother Jones website, and see the charts that are there as well. This article is not being posted here only so you can read. Most importantly, I want you to respond, but not only in the comments below but with your actions. – Street Blogger
Update, 3/6/2013: The Dow hit a record high on Tuesday, but who’s winning? The conditions of America’s jobless recovery detailed in this essay nearly two years ago have only continued—corporate earnings have risen at an annualized rate of 20 percent since the end of 2008, according to the New York Times, while Americans’ disposable income has inched ahead 1.4 percent by comparison. Or, as a top economist for Bank of America told theTimes, “So far in this recovery, corporations have captured an unusually high share of the income gains.” Here’s why.
ON A BRIGHT SPRING DAY in a wisteria-bedecked courtyard full of earnest, if half-drunk, conference attendees, we were commiserating with a fellow journalist about all the jobs we knew of that were going unfilled, being absorbed or handled “on the side.” It was tough for all concerned, but necessary—you know, doing more with less.
“Ah,” he said, “the speedup.”
His old-school phrase gave form to something we’d been noticing with increasing apprehension—and it extended far beyond journalism. We’d hear from creative professionals in what seemed to be dream jobs who were crumbling under ever-expanding to-do lists; from bus drivers, hospital technicians, construction workers, doctors, and lawyers who shame-facedly whispered that no matter how hard they tried to keep up with the extra hours and extra tasks, they just couldn’t hold it together. (And don’t even ask about family time.)
Webster’s defines speedup as “an employer’s demand for accelerated output without increased pay,” and it used to be a household word. Bosses would speed up the line to fill a big order, to goose profits, or to punish a restive workforce. Workers recognized it, unions (remember those?) watched for and negotiated over it—and, if necessary, walked out over it.
But now we no longer even acknowledge it—not in blue-collar work, not in white-collar or pink-collar work, not in economics texts, and certainly not in the media (except when journalists gripe about the staff-compacted-job-expanded newsroom). Now the word we use is “productivity,” a term insidious in both its usage and creep. The not-so-subtle implication is always: Don’t you want to be a productive member of society? Pundits across the political spectrum revel in the fact that US productivity (a.k.a. economic output per hour worked) consistently leads the world. Yes, year after year, Americans wring even more value out of each minute on the job than we did the year before. U-S-A! U-S-A!
Except what’s good for American business isn’t necessarily good for Americans. We’re not just working smarter, but harder. And harder. And harder, to the point where the driver is no longer American industriousness, but something much more predatory.
SOUND FAMILIAR: Mind racing at 4 a.m.? Guiltily realizing you’ve been only half-listening to your child for the past hour? Checking work email at a stoplight, at the dinner table, in bed? Dreading once-pleasant diversions, like dinner with friends, as just one more thing on your to-do list?
Guess what: It’s not you. These might seem like personal problems—and certainly, the pharmaceutical industry is happy to perpetuate that notion—but they’re really economic problems. Just counting work that’s on the books (never mind those 11 p.m. emails), Americans now put in an average of122 more hours per year than Brits, and 378 hours (nearly 10 weeks!) more than Germans. The differential isn’t solely accounted for by longer hours, of course—worldwide, almost everyone except us has, at least on paper, a right to weekends off, paid vacation time(PDF), and paid maternity leave. (The only other countries that don’t mandate paid time off for new moms are Papua New Guinea, Sierra Leone, Liberia, Samoa, and Swaziland. U-S…A?)
To understand how we got here, first let’s consider the Ben Franklin-Horatio Alger-Henry Ford ur-myth: To balk at working hard—really, really hard—brands you as profoundly un-American. Who besides the archetypical Japanese salaryman derives so much of his self-image from self-sacrifice on the job?Slacker is one of the most biting insults available in polite company.
And so we kowtow to—nay, embrace—a cultural maxim that just happens to be enormously convenient to corporate America. “Our culture has encouraged me to only feel valuable if I’m barely hanging on to my sanity,” one friend emailed as we were working on this article. In fact, each time we mentioned this topic to someone—reader, source, friend—they first took pains to say: I’m not lazy. I love my job. I come from a long line of hard workers. But then it would pour out of them—the fatigue, the isolation, the guilt.
“I am exhausted,” said a “part time” college instructor in Illinois. “I can’t help my son with his homework because I am grading papers until late into the night. I get up very early during the week, skip lunch to save not money but time, and the workload never lets up. My employer uses and abuses full-time employees even more so than those of us that are hourly. My supervisor, for example, runs a large department. He was just promoted to a new, even more demanding position, but his position running the department will not be filled. He will now be doing what is a 60-to-70-hour job ‘on the side.’ I can’t complain of overwork, because everyone is competing to get enough classes to pay the bills. If you lose a class, you lose a chunk of your paycheck. If we can’t handle it, the class can always be given to another teacher who will be desperate for the work or money.”
SURE, BUT THESE ARE tough times—employers struggling to survive the recession are just tightening their belts, right? That’s true for some. But in the big picture, the data show a more insidious pattern. Consider the charts above: After a sharp dip in 2008 and 2009, US economic output recovered nicely to near pre-recession levels—we did better than most of our fellow G-7 economies. But not so American workers: Far more people here lost their jobs, and fewer were hired back once the recovery began, than anywhere else.
Now, some jobs always get “rationalized” away, thanks to technological or organizational improvements—an area where, it’s not jingoistic to say, the US has led its European counterparts. But that “productivity gap” has narrowed considerably, and in any case, there certainly was no dramatic tech or efficiency breakthrough between 2008 and 2010 (quite—Twitter/Facebook/FarmVille—the opposite).
What about offshoring? That’s certainly a factor. But increasingly, US workers are also falling prey to what we’ll call offloading: cutting jobs and dumping the work onto the remaining staff. Consider a recent Wall Street Journal story about “superjobs,” a nifty euphemism for employees doing more than one job’s worth of work—more than half of all workers surveyed said their jobs had expanded, usually without a raise or bonus.
In all the chatter about our “jobless recovery,” how often does someone explain the simple feat by which this is actually accomplished? US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.
This is nothing short of a sea change. As University of California-Berkeley economist Brad DeLong notes, until not long ago, “businesses would hold on to workers in downturns even when there wasn’t enough for them to do—would put them to work painting the factory—because businesses did not want to see their skilled, experienced workers drift away and then have to go through the expense and loss of training new ones. That era is over. These days firms take advantage of downturns in demand to rationalize operations and increase labor productivity, pleading business necessity to their workers.”
How does corporate America have the gall? You pretty much know the answer, but for official confirmation let’s turn to Erica Groshen, a vice president at the Federal Reserve Bank of New York: It’s easier here than in, say, the UK or Germany “for employers to avoid adding permanent jobs,” she told the AP recently. “They’re less constrained by traditional human-resources practices [translation: decency] or union contracts.” In plainer English, here’s Rutgers political scientist Carl Van Horn: “Everything is tilted in favor of the employers…The employee has no leverage. If your boss says, ‘I want you to come in the next two Saturdays,’ what are you going to say—no?”
And lest CNBC hornswoggle you, this is not just a product of the recession. Throughout the past decade, salaries stagnated and workloads grew, but Wall Street’s bubble allowed us to drown our sorrows in credit. (Sure, I’m working crazy hours and our pension fund is history, but check out my granite countertop!) Then came the crash, and the speedup…speeded up.