[p2p-research] The New Joblessness - NYTimes.com

[Paul D. Fernhout]

From:
   "The Way We Live Now: The New Joblessness"
   http://www.nytimes.com/2009/07/26/magazine/26FOB-WWLN-t.html
"""
The U.S. economy is not only shedding jobs at a record rate; it is shedding 
more jobs than it is supposed to. It’s bad enough that the unemployment rate 
has doubled in only a year and a half and one out of six construction 
workers is out of work. What truly troubles President Obama’s economic 
advisers is that, even adjusting for the recession, the contraction in 
employment seems way too high. As one administration official said, “This 
has been a very steep job loss.” One proof, he added, is that the country is 
deviating from the standard (among economists) jobs predictor known as 
Okun’s Law.  ...  How would Obama, not to mention Congress, respond to 
declining employment and falling wages? The pressure for another stimulus 
(and greater deficits) would be intense. So would that for demagogic 
solutions like trade barriers. Robert Reich, the former labor secretary, 
says most lost jobs are not coming back. The huge question is when — or 
whether — new ones will take their place.
"""

Mentioned here with comments by James Hughes:
   "The ‘Public Option’, Rising Unemployment, Longer Lives"
   http://ieet.org/index.php/IEET/more/3285/
"Why the single payer is a far better bet than a public option. Why the jobs 
may not come back. Why a 35 hour 4 day week is even better than a 40 hour 4 
day week. Why seniors need to be biotechnologically enabled and encouraged 
to work longer."

The key point James Hughes makes is the article fails to mention the effects 
of automation on increasing unemployment.

I'd add the article doesn't mention offshoring either. Or limited demand 
from voluntary simplicity, environmentalist, or demand saturation.

So, if the jobs are not there, then many individuals have to start thinking 
about subsistence living. So, they can take the resources they have, like 
land for a garden, tools to repair or make products they need from free 
scrap materials, education through the internet instead of formal channels, 
and their own social networks and their local community, and so on, and do 
what they can to survive outside of the formal economy.

Still, unlike the last Great Depression in the 1930s, people now have higher 
aspirations for quality of goods beyond what they can make themselves 
easily; that might change with more 3D printing, but we are not there yet. 
People may have less subsistence skills in general than in the 1930s when it 
was common for people to, say, build their own homes. People probably have 
less paid-for land, given widespread use of debt for mortgages. In the 
1930s, many more people had small farms that either they or their relatives 
could grow their own food on, cut wood from, or produce energy on. How many 
people have a relative with a farm when only 2% of the worforce now works in 
agriculture, compared to 50% of the workforce in agriculture back around 
1900? So, in all those ways, people are far less prepared to be cut off from 
an industrial life support system.

One problem from a p2p perspective is that in the USA people often have 
debts like mortgages or costs like taxes that are denominated in US dollars. 
  Dollar costs are connected to the formal economy, even when people have no 
option to participate in it and no basic income from the state.  In some 
ways, this is analogous to, say, what has happened in Iceland, where debts 
might be denominated in foreign currencies, creating a currency crisis that 
can't be solved locally.

There is Welfare for the very poor in the USA,
   http://en.wikipedia.org/wiki/Welfare#United_States
but it is a huge lifestyle shift and only generally available when all other 
*assets* have been exhausted (and usually the money needs to be paid back 
eventually -- my mother used to work as a welfare examiner), and in no way 
can cover a typical US lifestyle.
  http://findarticles.com/p/articles/mi_m1272/is_n2622_v125/ai_19217177/
"The full package of benefits actually provides recipients with incomes 
above the poverty level in every state. The value, relative to a job 
providing the same after-tax income, ranges from $36,400 in Hawaii to 
$11,500 in Mississippi. In eight jurisdictions--Hawaii, Alaska, 
Massachusetts, Connecticut, the District of Columbia, New York, New Jersey, 
and Rhode Island--welfare pays at least the equivalent of a $25,000 a-year 
job. The pretax value of welfare benefits substantially exceeds the amount a 
recipient could earn in an entry-level job in virtually every state. Thus, 
recipients of aid are likely to choose welfare over employment, increasing 
their long-term dependence."

Note -- those amounts are inflated in the sense that they include access to 
health care and access to education (taken for granted in other 
industrialized countries), which may be a big chunk of the assumed value of 
benefits. So, that is not a total amount of spending cash in the pocket.

Compare even that inflated US$25K with about double that for the median 
income of families, most in that range who live paycheck to paycheck:
   http://en.wikipedia.org/wiki/Household_income_in_the_United_States
"In 2007, the median annual household income rose 1.3% to $50,233.00 
according to the Census Bureau."

But, in any case, under the best situation given a jobless recovery, and 
ignoring predicted rises in unemployment, about fifteen million people (and 
their families, so perhaps as much as sixty million people, or a fifth of 
the US population?) are, at best, over the next year or so about to undergo 
a massive unplanned and undesired lifestyle shift into a welfare program not 
designed to handle this.
   http://en.wikipedia.org/wiki/American_welfare_state
"Currently total social welfare expenditure constitutes roughly 35% of GDP, 
with purely public expenditure constituting 21%, publicly supported but 
privately provided welfare services constituting 10% of GDP and purely 
privately services constituting 4% of GDP."

Note that 35% of the US$14.4 trillion USA GDP is about five trillion dollars 
a year, and with a US population of about 300 million people, is about 
US$16700 a year per person, or about US$67000 per year for a family of four, 
or plenty for a basic income for *everyone* in the USA at today's prices. 
So, it would be straighnforward then to implement universal health care as 
well as disband public schools (since parents would have enough money to buy 
education for kids through the market). And a basic income would mean most 
of the workers in welfare eligibility could retire (there might be a few to 
prevent fraud by one person claiming multiple payments). So, the current 
system and the suffering it creates is entirely ideologically driven, and 
actually spends more than is needed to get worse outcomes.

--Paul Fernhout
http://www.pdfernhout.net/