Beneath the Surface

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Arne L. Kalleberg. Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s to 2000s (New York: Russell Sage Foundation, 2011)

Sociologist Arne Kalleberg analyzes job trends over the past four decades to document a growing divergence in job quality. Of course, jobs have always varied in pay, benefits, autonomy, job satisfaction, and other characteristics. What Kalleberg confirms is just how polarized employment has become, with more jobs that are distinctly good or bad and fewer in between. His findings support those of other analysts who observe a shrinking of the middle class (see, for example, “The Lost Decade of the Middle Class“).

In contrast to what has been happening recently, the several decades preceding the 1970s were a period of middle-class expansion. American manufacturing, construction and transportation industries were booming, and they provided many blue-collar jobs that required only modest skills but offered good wages and a fair amount of security. That was the era of the social contract between business and labor, in which “workers received fairly secure and well-paid jobs in exchange for labor peace and productivity.” That contract was supported by recently-enacted labor laws that guaranteed collective-bargaining rights and regulated hours and working conditions. Many descendants of turn-of-the-century immigrants became stable breadwinners and homeowners, and then raised the next generation to advance even farther.

How did the country go from an expanding middle class, with mass participation in the benefits of economic growth, to a situation of increasing polarization of employment and income? Kalleberg provides a comprehensive framework for thinking about the problem, including these elements:

• The social and economic forces that have transformed the economy: Globalization has increased the competitive pressures on companies and their workers, challenging them to be more flexible. Information and communication technologies facilitate this flexibility, replacing some forms of labor and enhancing others. Elimination or offshoring of manufacturing jobs shifts the center of job creation to the service sector.
• The composition of the labor force: As education and skills become more essential for good jobs, the large disparities in educational attainment within the U.S. population help divide workers into good and bad jobs. Groups with historical disadvantages in education, such as non-whites and immigrants from poorer countries, are vulnerable to being channeled into the worst jobs, a pattern reinforced by discrimination. The large numbers of women who are now in the labor force are disadvantaged less by education than by their traditional role as mothers, since the U.S. lags behind other countries in providing time off for parenting, illness or even vacations; and part-time jobs are often particularly poor in wages and benefits.
• Mediating institutions: Employment trends are not just automatic responses to global economic forces or labor market conditions, but are shaped by other social institutions. Government decisions to deregulate industries and weaken labor law enforcement have given American companies more freedom to restructure in ways that destroy good jobs. Advocates of corporate flexibility have advocated a “neoliberal” free-market ideology that favors competitive, rugged-individualist solutions over cooperative, social solutions. The decline in American unions, which has been worse than in many European countries, has created the world’s largest gap between the number of workers who want a union and the number who can have one. New institutions in the expanding and increasingly deregulated financial sector, such as private equity firms specializing in corporate takeovers and restructuring, increase the pressure on companies to pursue short-term profits by cutting labor costs.
• Work organization: Companies struggling to compete in the global marketplace can go about it in more than one way. Most American firms have relied heavily on “low-road” strategies that focus on cutting labor costs. But some have adopted “high-road” strategies that invest in quality labor to produce quality products. Some firms do both, with a core of skilled workers and a periphery of workers with lower skills, pay and security.

Perhaps the most important take-away from Kalleberg’s book is that organizations and societies have choices. Global competition, the information revolution and the service economy are here to stay. But we don’t have to reconcile ourselves to a continued proliferation of low-wage jobs. We have plenty of work to do, work that could utilize skilled workers getting good wages justified by the value of what they produce. Creating better jobs is partly a matter of upgrading skills, but it’s also a matter of organizing work in a way that best utilizes those skills, and of giving workers a voice in that organization. Each of these reinforces the others.

Consider what Kalleberg has to say about personal service jobs:

Personal services such as home health care are typically provided by the private sector in the United States; they are very expensive if they are performed by highly qualified people. Consumers are not able and often unwilling to pay for the true value of these services (especially once they have gotten used to not doing so). How we remunerate these kinds of personal service jobs is a social choice, however; we do not have to let private markets make these decisions. Personal and other services can be delivered at many different levels of quality. If we want higher-quality services, we will need to upgrade these jobs and hire workers with greater skills to do them. Personal service jobs tend to be low-skill in the United States because we have defined them that way, paying them low wages and recruiting people with relatively few qualifications to do them. If we insisted on higher standards of quality for, say, child care, then we could require those jobs to be more highly skilled and pay qualified people more. Other countries have upgraded the quality of these kinds of personal service jobs by putting them in the public sector and supporting them publicly through taxation (as in Sweden, for example). Since many of these personal service jobs are paid by public funds one way or another, their levels of compensation are ultimately social and political decisions, requiring only the will to upgrade them.

Of course, some people may prefer to live in a low-tax, cheap-product society, even if that means tolerating a lot of low wages and poor-quality services. But that’s a debate we can have. Kalleberg’s point is that we have a choice. We don’t have to accept the present state of affairs as an unavoidable outcome of inexorable economic laws. A society with more good jobs and high-quality services is theoretically possible, although it may take more effort and creativity to achieve.

(Continued)

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In an interview on Fox News yesterday, Governor Romney tried to get his campaign back on message following his widely-deplored attack on 47% of Americans. “I do believe that we should have enough jobs and enough take-home pay such that  people have the privilege of higher incomes that allow them to be paying taxes. I think people would like to be paying taxes.”

At first glance, this is consistent with the main message of Romney’s campaign, that he wants to create good jobs for the 23 million Americans who are unemployed or underemployed. Wanting to create jobs and wanting people to become taxpaying citizens less dependent on government are, of course, entirely compatible goals.

But here’s the rub. If Romney’s top priority were really job creation, wouldn’t he be actively courting the voters who will most benefit from the new jobs? Wouldn’t he expect a lot of votes from, say, part-time cleaning women who currently earn too little to pay income tax? Instead he writes off the most needy part of the electorate, assuming they prefer to be dependent and take no responsibility for their lives. Unemployed and low-wage workers make up the biggest chunk of the 47% who pay no federal income taxes. (The next biggest chunk is the elderly, but Romney has exempted them from his criticism of non-taxpayers.)  If he really believes that most low-income people want to earn enough to pay more taxes, which is what he now says, how can he square that with his description of them as freeloaders? And by the way, earned-income tax credits were a bipartisan reform to give poor people more incentive to take low-wage jobs. Now we condemn those who did so for not paying the taxes from which they were exempted. Wasn’t it Romney who said that people shouldn’t pay one more dollar in taxes than they legally have to? Or does that only apply to rich folks?

Romney’s disdain for the very Americans he claims to want to help leads me to suspect that his jobs message is more of a slogan than a plan. That would explain why he refuses to provide any details about it.

What then does he want to accomplish, and for whom? Well, primarily, to cut federal income taxes for the 53% of the population who pay them. He hopes, of course, and maybe believes, that more money in the hands of upper-income Americans will be used to create jobs, but that’s a much less direct way of going about it than, say, spending money on infrastructure. Bigger tax cuts also have the potential to deprive government of revenue, forcing more layoffs of public employees and cuts to the social programs on which the poorer 47% depend. But that doesn’t matter if Romney doesn’t concern himself with that 47%, as he admitted.

To me, then, the “47%” statement was a lot more than an “ineligant” (Romney) or “inarticulate” (Ryan) way of making a reasonable policy point. I think it’s exactly what it appears to be, a revelation that Romney wants to be President only of the 53% of Americans with which he identifies.