As we honor the American Worker on this Labor Day 2011, those of us who work for a living in these United States of America are increasingly uneasy about the direction of our country. For good reason. Stagnant incomes and economic instability have continued to be a fact of life as the nation works its way through what has been the slowest economic recovery since the Great Depression. Millions of Americans are unemployed — record numbers for longer and longer periods of time — and many millions more are working for far less income than they used to. Meanwhile, our elected officials in Washington, DC appear unwilling or unable to help Americans get back to work.
The hard truth is that businesses are not hiring more workers because they don’t need them, or in some industries because they can’t find workers with the skills they need. The wealthiest 1 percent of Americans today control about 40 percent of the assets in our country, and have increasingly become wealthy without investing in people or producing anything. Wealth in the US during the last decade has been created largely through investment in financial assets, not in people or in productive assets.
The issue of the role of government is central here both in economic and political terms. Neither of our political parties have been proposing comprehensive solutions. They can’t even agree on the nature of the problem.
Tea Party Republicans are making the argument that the threat of marginally higher taxes or changes in regulation is what’s keeping businesses from hiring. The reality is that businesses have had to deal with the uncertainty of tax and regulatory policy for generations. President Clinton put limits on spending and raised marginal tax rates and 22 million American jobs were created. The link between marginal tax rates and job creation is iffy at best.
The question of regulation is trickier because sometimes federal, state, or local regulation of economic activity can have an impact on business decision-making. The answer is not however that less regulation is always better. Most Americans agree that we need clean air and clean water. We need orderly financial markets. We need to keep Americans safe as they travel by land, sea, and air, and safe from products that harm our health. The answer then is not unregulated markets but instead, thoughtfully and carefully regulated markets. This question of regulation is way too complex to be decided based upon simple-minded political ideology.
The greatest impediment to putting Americans back to work is the lack of demand for goods and services. The near collapse of world financial markets, and ongoing turmoil in those markets, has significantly curtailed demand in the US. We literally saw trillions of dollars in assets disappear as the bubble burst in US home prices, and the financial house of cards built upon supposedly safe “mortgage-backed securities” collapsed. The financial collapse crippled the flow of capital and credit to businesses and individuals, reduced incomes as millions of workers got laid off, and millions more lost buying power as home prices and financial markets experienced steep declines.
The American workforce collectively faces a multifaceted problem. We have too many workers unemployed, underemployed, and experiencing profound economic insecurity. Too many workers are facing foreclosure and tens of millions of homeowners throughout the US have lost equity in their homes. Mortgages that are underwater make it difficult for the unemployed and underemployed to move to where the jobs are. Too many American children are dropping out of high school and not enough of us are going to college and graduate school, especially for advanced study in subjects such as Math, Science and Engineering. Too many Americans are simply becoming expendable in the new global economic order. And it’s a problem that affects all of us.
So as we ponder America’s future on this Labor Day, how do we make sense of the state of the American worker? Is the future really that bleak? The answer is no — unless we believe it is so. We need to increase demand for American made goods, and services provided by American workers. To be more competitive, we need to invest in educating our workforce, and we need to rebuild our energy and transportation infrastructures. And we need to find creative ways to stabilize home prices.
As Americans, we need to come to our senses and stop listening to those who would have us find scapegoats for what ails us. We need to hold those who would be our leaders to a higher standard. It’s time to find specific solutions to the very real issues we confront as a nation. We need to begin rewarding hard work and responsibility again, and stop rewarding greed. We need to reflect on what we can do as a nation to rebuild an America that we can proudly leave to our children and to the generations that follow. We need on this Labor Day to begin again the work of rebuilding our country together, as Americans.