Men Exiting Workforce as Low-Wage Jobs Vanish

A new Council of Economic Advisers study released by the White House on the fall in labor force participation among men of prime working age (25 to 54) should be subtitled, “It’s the Neoliberal Economy, Stupid.”

The report does a useful job in documenting where the level and nature of the decline in male workforce participation, which peaked at 98% in 1954 and is now at 88%, the third lowest among OECD countries. The decline is concentrated among less educated:

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Blacks have been hit harder than other groups:

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And the general outlook for employment has been deteriorating over time. However, bear in mind that this decay somewhat overlaps with the story that less educated groups have been harder hit. US educational attainment has fallen over time.

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The report dismisses the myths that access to Social Security disability or that men are not choosing to work as culprits. More than a third were in poverty. Fewer that 25% of the men not working have a spouse supporting them and that percentage has dropped in the last 50 years. The CEA’s analysis find that Social Security disability explains at most 0.5% of the reduction.

The cause is the state of the job market:

• Participation has fallen particularly steeply for less-educated men at the same time as their wages have dropped relative to more-educated men, consistent with a decline in demand.

o In recent decades, less-educated Americans have suffered a reduction in their wages relative to other groups. From 1975 until 2014, relative wages for those with a high school degree fell from over 80 percent of the amount earned by workers with at least a college degree to less than 60 percent

While doing a fine job dimensioning profile of the groups that have been hit the worst, the authors, after invoking hoary neoliberal defenses, as in these workers are the losers in a globalized market, the paper gives a coded acknowledgment that policies that are hostile to workers have produced the expected result:

This reduction in demand, as reflected in lower wages, could reflect the broader evolution of technology, automation, and globalization in the U.S. economy.

Conventional economic theory posits that more “flexible” labor markets—where it is easier to hire and fire workers—facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD—with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage—the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.

It is remarkably cheeky to see the authors attempt to depict “flexible” labor markets, where workers can be tossed on the trash heap, as beneficial to laborers.

The recommendations are tepid, and the authors assert “A number of policies proposed by the Administration would help to boost prime-age male labor force participation.” In other words, we are to believe the problem is those Republican meanies in Congress, as opposed to Obama not pushing hard for these measures in his first term, when he had the opportunity to pass wide-ranging reforms.

One proposal is the new conventional wisdom of more infrastructure spending to create more jobs for unskilled workers directly, improving community colleges and other training so workers will have skills that line up with hot job markets. The problem with the latter idea is that demand can shift quickly (look at how the oil patch was robust a few years back and is now just starting to get back on its feet). Moreover, employers are extremely prejudiced against both older people and people who’ve been out of the workforce, and the age which is deemed to be “older” has collapsed. Per Wolf Richter (emphasis original):

Now I’ve come across a fascinating piece on MarketWatch, an article on what to do to get into the cross hairs of a recruiter whose algos are combing through millions of profiles on LinkedIn.

No recruiter in his right might is personally clicking through LinkedIn profiles. They’re all scanned by algos by the millions in nanoseconds. And so the trick is structuring your profile to get the algos to pay attention. This isn’t a human-to-human scenario, but a human-to-algo scenario. You’re trying to second-guess an algo that’s going to decide your future….

But apparently the lifespan of a degree has been shortened from 20 or 25 years to just 10 years! Then it rots, and it has to be swept under the rug. The article put it this way (emphasis added):

Older job-seekers….

I mean, I’m already seething.

Older job-seekers need to walk a fine line. Unless you made the cover of “Time” or discovered a solar galaxy, experience has a shelf life on LinkedIn, says Scott Dobroski, career trends analyst at Glassdoor. There’s no need to wax lyrical about a job that’s more than 10 years old, he says. And those who graduated from college a decade ago may want to exclude the date they graduated. “Your college graduation date will age you,” he says, “and although ageism is illegal, it’s happening all the time.” On the other hand, if you’re applying for a job as CEO of a Fortune 500 company and you graduated in 1986, it’s okay to leave the date, Dobroski says.

Note the word “older job seekers” in connection with a college degree from 10 years ago. Those older job seekers are early Millennials!

Yves here. Admittedly, candidates on LinkedIn are more educated than the group this study is most concerned about, but consider the message: even among the educated, the shelf life of a degree has diminished greatly due to ageism. Why would it be less bad among the less well educated?

Similarly, the problem with European-style job training programs is that US employers do not want to hire people with general training, even in a particular skill area. Their strong preference is to hire someone who is doing the exact same job for a similar company, so as to minimize their effort (in theory; in practice, the extra time spent on the search probably offsets the theoretical savings). The cure for that is a much more robust job market, where employers realize they are not going to find the perfect candidate and take someone approximate and give them the training and other guidance they need to become productive.

And finally, the report claims that Obama has been pumping for one of the most needed remedies:

Increasing wages for workers by raising the minimum wage, supporting collective bargaining, and ensuring that workers have a strong voice in the labor market.

Help me.

So I’m at a loss to understand the political purpose of this report. It’s useless as a policy driver given that this is an election year when Obama is a lame duck. Perhaps it is a weak effort at legacy-bolstering by showing that even though the decline in labor force participation among men was marked in the Obama Administration, it started long before he took office. But it still ignores some elephants in the room, like the fact that employers stopped sharing the benefits of productivity gains with workers starting in the mid-1970s and lack of sufficient demand in the economy. What it does reveal is one of the many time-bombs that Obama has left for the next President.


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    1. Benedict@Large

      Economists since the 1970s have been primarily involved with explaining away unemployment; that is, saying it doesn’t exist. This is because their theory of inflation (printing money = inflation) breaks the rules of elementary algebra if unemployment does exist. To normal people (non-economists) confronted with such a situation, the theory would quickly be abandoned as nonsense, but to economists this is not an option, because this theory also says that big government is bad, a truism that in the economics profession needs no explanation.

      So you see, Marco, there is no crappy jobs market because there’s no such thing as unemployment. Ask any economist. They’ll tell you.

    2. Simon

      Here are some nice nuggets from the CEA study on the stay-at-home dad myth:

      “Participation rates have fallen for both parents and nonparents alike, but prime-age males without children saw a larger decline of 9.4 percentage points since 1968 compared to 4.9 percentage points among prime-age males with children. This suggests that men dropping out of the labor force to be stay-at-home fathers is likely not an important factor in the overall decline; moreover, only around a quarter of prime-age men who are not in the labor force are parents (down from around 40 percent in 1968).”


      “Based on [American Time Use Survey] data, there is little evidence that men are staying home to care for children or to do house work.

      Of course, I am preaching to the choir here!

    1. av av

      Blame technology.
      Low skilled workers are easiest to replace.
      Example, you used to have people sweeping and washing floors in shopping centers or subway stations.
      Now you have one person on a sweeper or washer.

      1. Pat

        And how well is that working out? I’m serious. Perhaps they need a couple of more people ALONG with the washers and sweepers. Sorry to use Disney, but part of the reason the parks are pristine is because they have a whole lot of people going along picking up the trash and sweeping up.

        It is not just technology, it is a management that doesn’t understand how much labor they really need and ignore the signs they do not have enough, because then their numbers might be down. And this is even when their numbers are already down.

        1. jsn

          It’s really about how the priorities are set and by whom.

          In a sane society, the issuer of the currency would pay people to do things people like to do or benefit from doing themselves and pay for equipment/robots to do things people don’t like.

          We live a long way from there.

          1. collins

            Friends of mine visited Germany last year, noticed that for curb, pothole repair where in the US you see 2-3 guys and a bunch of equipment, there he would see 8 guys with shovels and little to no equipment.

        2. SpringTexan

          Yes, when I was working at UT-Austin, they cut the janitorial staff so that offices were only vacuumed once a month.

          There is work to do. But not willingness to have people do it.

          1. Steve Gunderson

            Maybe teaching people to pickup after themselves should be a Freshman level course?

      2. inhibi

        It is not as simple as “technology”. I often find that those who say lines like “robots are going to take away all the jobs!” are those without actual degrees in those subjects. Technology simply moves the plane of thought, processing, manufacturing, etc to the next level. The invention of the computer spawned an entire multi-TRILLION dollar industry with millions of jobs. Robotics will be/is the same.

        The reality of what is happening is on the economic/political level. It involves a small number of people, living in a rich, opulent high tower, who for years acted and enacted without the slightest bit of empathy or selflessness. These same people have literally no depth to their thought and are ruled by the very gluttony/ego so valued in todays consumerist society. This type used to live in Rome during Diocletian’s rule, in Egypt during the Hyskos invasion, in the Mayan Empire during the Postclassic period, etc ad infinitum. The overall picture has repeated itself, as an empire is a microcosm of any living organism; it gets old and becomes very susceptible to change, that is, the ruling class become so removed from reality that their decision making begins to deviate further and further from the actuality of the current situation. The Housing Crisis is a prime example. The banks saw fit to literally scam their own customers with no government intervention! Twice! This type of thinking quickly affects the entire nation. People begin to see a futility in living morally and truthfully, and start to wonder if the entire system is a scam.

        Now imagine the modern US economy as a sinking ship. The top level execs, elites, are busy pillaging as much as they can, because they all see that US supremacy isn’t going to last. Manufacturing all moved to China, now Mexico, retail is dead in the water, the US consumer is getting weaker and weaker. Only healthcare is staying afloat, due more to political reasons than anything else.

        The easiest and most common method to increase your salary as a corporate exec is to get rid of overhead: sell off portions of the business, layoffs, etc. They are all doing it regularly with no impunity. US manufacturing is all but GONE. Its all been sold to PE firms that install a puppet as the CEO, who then begins the extraction process of selling off parts of the business, instating capital controls, and layoffs. Now it moved to retail. Eventually, America will be a literal husk. Every place will just have the same options of a few fast food and retail chains. The entire Midwest is already there, hence “Rust Belt”. The only places that will be spared in America will be the bubble of wealth concentrated on the coasts, but even these will begin to whither as wealth starts to move to other, happier countries.

        So in this milieu, put yourself in the place of a average HS educated American. You have two options for your career: work your ass off and make next to nothing, or go to college and graduate a debt-slave, also making next to nothing. However, a third option presents itself, complements of the Welfare State: collect unemployment and have all the free time in the world. Then imagine what you see and hear everyday. Banks illegally foreclosing on homes, executives getting away with fraud in the hundreds of millions, a militarized police, potent pharmaceuticals given away like candy, a plant that causes mild decrease in heart pressure illegalized, politicians lying again and again, the wealthy talking on TV about how “easy” it is to open a business and selling books about it, etc. It all concentrates down to the worst of all emotions: depression, self-loathing, and envy.

        The depression comes from the hopelessness of most American’s situation: poorly educated with no future career, not even a path to take which will ensure a brighter future. The self-loathing comes from the media, as most people get an HOURLY reminder of how shitty they look, how poor they are. Even shows like Shameless don’t touch on the reality of being poor in America. It isn’t a day to day struggle to pay bills. Its a day to day struggle to even feel worth something. To feel part of society.

        Then there’s envy. You feel envious of the wealth, the attractiveness of others you see in the media, which you misplace as being the vast majority of people in America because you see them everyday and everywhere: online, on billboards, in movies, commercials, etc. You begin to feel like SOMETHING should be given to you. The Government, fearing rebellion, realized this during the last Great Depression when they began to expand the Welfare State. Welfare is a form of suppression. It keeps people on the lowest rung just happy enough to forget about rebelling. Big Pharma is a BIG factor in this as well. Ive visited enough towns in the Mid West where everyone is on some pharmaceutical, usually Percocet or valium, yet have no money for a proper house with heating and cooling.

        So in summary, the extraction of wealth by the upper class, (through “global” trade agreements, stock market manipulation, tax evasion, offshoring, etc) along with lax regulation & prosecution by the political body (they are very much one and the same these days) caused immense physical (monetary) and mental depression/suppression of the masses, which are steadily moving toward Welfare as it becomes the only of options with a glimmer of stability & free time.

  1. FedUpPleb

    So entire industries now eschew people older than 30 in favour of being staffed entirely by 20 somethings. This will surely end well.

    1. Arizona Slim

      I would like to see where all of these highly skilled and motivated 20-somethings are coming from. Because I am not seeing them around here.

      1. NoGig

        They are bring these workers from India where starting IT salaries are $10,000/year. Check early in the morning and late at night and you will see the buses delivering the workers who lived crammed in surrounding apartments. One told me his Indian outsourcers had eight of them living in a two-bedroom apartment with one bathroom — while working 80-100 hours per week. They are threatened with deportation if they complain, and in some cases, their families back home are physically threatened.

        With the defeat of H-1B expansion, Obama has now vastly increased foreign guest workers through executive actions that include:

        — granting automatic work authorization to all H-1B spouses.
        — expanding Bush’s “Optional Practical Training” now allowing stem graduates to work for three years in the US on a student visa. The OPT has no caps, little labor protections, and no salary requirement.
        — lowered qualifying requirements for L-1B visas. L-1b visas allow corporations to import their foreign employee to work in the US at the home nation salaries. And has lead to widespread abuse such as foreign employees being paid $1.73/hour.
        — modified the B-1 visa, used attended training and meetings, to incorporate the “B-1 in lieu of H-1B” which now allows some foreign workers to work in the US on the B-1 visa

        There are now well over a million foreign guest workers in the US and the numbers are growing. Curiously (ha ha!), DHS does not even keep count of the above admissions.

        America, this is not YOUR government.

        1. John

          Wow, didn’t know they expanded the student work permission to three years.
          Used to be one year.
          Essentially if you go to college here you have bought yourself a ticket
          to live in America and take a job from an American.

      2. perpetualWAR

        I was replaced by a 20-something. Actually, at my last job (3 years ago) both the older employees, myself and another employee, were replaced. One employee who had worked there for 15 years and was 60, so TWO years away from retirement, was let go. (I hope he sued the pants off that horrible firm!)

      3. weinerdog43

        Oh, they’re all out beating down the door over in Philadelphia to work as substitute teachers for $75 per day. Just google ‘substitute teacher shortage’ and you’ll see plenty of job opportunities.


    2. inhibi

      Its called “turnover” and companies use it nowadays to suppress wages. Why pay a 30 yr old 85K when you can pay a 20 yr old 50k?

      Most of the work is simple anyways, unless you work in the STEM field. And unfortunately, in the STEM field, the largest industry (software) takes this approach to the next level.

  2. fresno dan

    Incentives matter – if the end all and be all is GDP, you get GDP. TPP is an “industrial” policy, or more accurately a re-distribution policy – yeah – re-distribution – the fact that it is re-distribution from the poorer to the richer is a novel use of the concept, but we should never under estimate the cleverness of Davos man.

    The fact that it is espoused by those who incessantly yammer about how government policy should be “neutral” exposes that these people are just making the rules for their own benefit. The fact that so many laws (“reforms”) must be instituted to advance this agenda just exposes the intellectual dishonesty. Or would they have us believe that the advent of neoliberalism and the increase in inequality is just a happy (sarc) coincidence? The idea that this is some unstoppable force of nature just wants to make me puke.

    If you think that work matters, that participation in society is important, and that a nation is more than airbnb beds for Davos man conference attendees, you can have policies that punish outsourcing, decide that limiting H4B workers increases demand for workers here with commensurate increases in wages. There are a zillion ways the tax code as well as other laws are inimical to US workers. It STARTS with the idea that paying labor more does NOT harm society….

    These policies are not a function of physics or of God’s will – they are made by men at the behest of the few to reward the few. It can be changed if we choose to change it – although I fear we are rapidly reaching a point, and may have already reached it, where we are a defacto plutocracy and any “reform” is mere window dressing.

    1. Linda

      I agree with you wholeheartedly. We are on a straight path to plutocracy and I too fear we have already passed the point of no return. I hear (read) daily the awful word, redistribution; always in the context of taking a small amount away from the rich and powerful to give to those not as fortunate; but never in the context of what is actually happening on a grand scale; the taking from the lower classes and giving it to the upper 1% and above. When will it stop? I don’t know; I do know that unless we continue to try and make the masses actually understand what is happening to them and to get them off their apathetic arses and involved in the political process, thereby voting out of office the scrads of politicians devoted to and enamored of neoliberalism, we will continue down this prophetic road of self destruction. It is our choice. It will be hard. It may, in fact, already be too late. But, we have to try. We have to keep working; working to explain the awful policies of neoliberalism.

      1. templar555510

        Agreed. So what MUST the demand be ? Let the capitalist go after FULL AUTOMATION and balance that with UNIVERSAL BASIC INCOME . Everything to do with money can be defined as a balance sheet so this should be the balance sheet for the 21st Century . The demand should come from all . And it’s coming. I know the Swiss just rejected it , but the fact that they just called a referendum to decide it ( for now ) tells us it’s there in the ether and the Swiss are not alone ; the Dutch, the Finns are all working on this . It’s the genuine great leap forward.

        1. tegnost

          sorry but basic income guarantee is simply creating demand for the plutocrats, and is exactly why food stamps are in the agriculture budget. This is why the 13,000/yr BIG floated a week or two ago already, at it’s inception, takes 3,000 and puts it towards medical care-oops, i mean insurance- you won’t get care unless you pay extra, don’t kid yourself. And this gravy train will have as many cars attached to it as it can carry, how much will your BIG be in the form of food stamps? rent subsidy? by the time it’s implemented the person at the root of the issue won’t get a thin dime, but the cronies will have a basic income guarantee, the true purpose of this terrible idea, I and others like me want things to do, not a snap card (more likely digital wallet brought generously to you by apple and jp morgan, which of course will charge a fee, and conveniently keep track of where you are at all times) that allows me to buy gmo food (yes, there will be foods that are for the poor and foods for the rich, want organic? what’s your net worth?) The silicon valley parlors where these moronic ideas are hatched are filled with people who are trying to cement their presence in the upper class which is funny on the meritocrat side because many of my tech friends didn’t go to college, they were good at video games and now it’s robots robots robots because that’s their gravy train and the BIG is their lame ass apology, while getting some demand into the economy to pay for their craptastic junk toys.

          1. TheCatSaid

            Great observations about BIG. I never thought of it that way, and you make it very obvious. Thank you.

          2. lightningclap

            ++ I have long been in favor of BIG but you point to the obvious strings that would be attached if formulated by our Valley “disruptors”.

          3. jrs

            then instead provide the basics of life to people, like healthcare and shelter, rather than money? That completely solves that problem doesn’t it?

          4. samhill

            Excellent, my vote post of the week. The best answer is to pay people to actually work, the work would be to pay them to undo the damage of the last 300 years of industrial revolution. We had created a large middle middle class and secure working class destroying the planet, we can create the same wealth cleaning it up. Instill hope on a dying planet, and for the first time in its history give humanity a reason to get up in the morning other than just exploiting each other in a rat race.

          5. Norb

            One way of looking at how a BIG can be manipulated by owners is considering slavery. It seems we are entering a new phase in the never ending capitalist struggle to secure cheep labor. Cheep labor and resources are the driving force of the current system. The logical end result is to have a self-sustaining labor force. One that makes just enough to survive and work- with little room for anything else. That is where we are headed.

            Advancing technology and the desire to shed costs related to slave upkeep can be argued as important factors in slavery’s demise in it’s original social form as one individual owning another as property. Why bother taking on the responsibility for slave upkeep when you can rig the system in ways that require workers to enslave themselves to businesses and the system as a whole. You need the labor power, not the person.

            A BIG will be sold for all the typical humanitarian half-truths, but in reality is a natural development to maintain the capitalist system. The powers that be have demonstrated no interest in maintaining a middle class workforce. Debt bondage and BIG coercion are on the horizon.

            As Goethe observed: None are more hopelessly enslaved than those who falsely believe they are free.

          6. lin1

            Your using an abstract moral excuse to argue against fulfilling a real actual need.Until the revolution comes, BIG is a solution I will support.

  3. Bill Smith

    Why does there have to be a political purpose for the release of the report? I would guess that the end of a presidency works a little like late Friday afternoon when stuff get dumped to the public at their point of lowest interest.

    Raising the minimum wage works at cross purposes. It helps in the short run but in the longer run – other things held constant – it makes automation more likely.

    When the small company I worked for years ago was faced with replacing a piece of equipment, at some point after the minimum wage had been raised, the company replaced it with one that was more automated and took few people to operate. The cost of labor had moved up and cost of capital was lower due the interest rates. The numbers were close enough that it could have gone either way but the feeling was that the cost of labor would continue to go up. Going with the more automated equipment locked in more of our costs.

    1. a different chris

      It’s weird how people can pretend to conflate technology assisting labor with replacing labor with cheaper labor, in order to derail the subject.

      As far as your “point”, they invented the nail and hammer and now we don’t have to drill holes and put pegs in. Fine. Nobody is talking about going technologically backwards, in fact just the opposite. We are talking about the race to the bottom in labor itself. I suspect a bit of looking around can find a lot of places where 1 American + 1 machine is slightly more expensive than 4 third-worlders + shipping + no machine. Sometimes the machines have progressed so fast that work has moved back onshore (and funny that all the moaning about “helping people that live on 2cents/day” isn’t heard when that happens), which is cool but it still is the exception.

      But: how limited is the number of “capitalists” that are going to bother to invest in bringing down the cost of that machine when you can drive the cost of humans down in almost unlimited fashion? — there are actually limits, and we will eventually hit them but it will get a lot uglier if we do it that way.

      1. Cry Shop

        And the whole issue is treating fellow human beings as less deserving, less worthy of employment just because of their nationality.

        There will always be that other half of the working class that can be used to kill the other half when pushed hard enough, any definition will do for separating the class in to us vs them, so that the war can start. Unions blew it when in the 1970s when their leadership sold out, refused to go international with trade agreements, and focused on protecting an indefensible position, indefensible from both an economics view and from an ethics view.

        1. Jay M

          During the cold war the American Labor union movement was thoroughly anti-communist and in bed with the CIA as far coordinating with international labor. See wiki on Jay Lovestone for a bit of the flavor of the times.

      2. Bill Smith

        My point was that we ended up with one less minimum wage job because the cost of labor made it better for the company to buy the more automated piece of equipment.

        That example had nothing to do with off-shoring – though I now work in a company of about two dozen people who has off-shored some work. I am going to guess about the equivalent of two full time jobs.

        I was quite surprised when that decision was made given our small size but it has worked as explained to us when it started.

          1. cnchal

            Looked at that way, the machine buys it’s consumables and raw material used in the process. It would have done that anyway, were Bill’s company to decide to buy a simpler machine and employ one more person, but because of the automation, and as long as sales justify it, the more advanced machine will process more raw material and use more consumables because it has the potential to run 24 hours per day, whereas an employee would be seeing stars after an eight hour shift, due to repetitious boring work.

    2. Felix_47

      Good point. Also consider litigation costs which to most employers in Ca at least is a huge financial and management burder. A couple of worker’s comp sore backs or knees combined with chiropractor, “pain management doctors,” surgeons, secondary psychic stress etc. makes a lot of employers including me realize that every employee is a ticking liability time bomb just waiting to call that 1-800-hurt at work number. No business can hire Americans in this legal environment unless they are very well paid well beyond their value so they have no option but to do the job. In fact, in my business litigation/medical/disability costs are far more significant than hourly wages. We just can’t take the risk and we outsource everything and hire as few as possible and I am not alone.. We do everything possible to avoid hiring low level workers and when we do we want young recent immigrants who are not “Americanized” and lawyer prone. Even then we get burned more often than not with claims for age related conditions. Then it is simply 1-800-Lastimado en Trabajo and you can see the ads all over the busses in TJ before they come over….ads for Ca worker’s comp attorneys!!!! Lawyers, since they control the democratic party are a huge part of our unemployment problem. No employer can take the worker’s comp risk of an older employee. If they feel back ache or knee ache or neck ache on the job…it is “aggravated” and the employer is often out hundreds of thousands….thanks to the lawyers who write the laws. Don’t count on this lawyer in chief or the next one to do anything about it. Age discrimination and automation and outsourcing are survival tactics for most of the businesses I work with, including my own.

        1. JohnnySacks

          Yes indeed, there’s a reason big business doesn’t want medicare for all – it would result in the ultimate ‘flexible workforce’. Workers immediately bailing out of every shit show employment situation they manage to fall into at the drop of the hat with no COBRA or insurance dead zones. But on the other side of the coin, it would ramp up the Uber jitney economy of on-demand disposable workers lined up holding signs displaying their skill sets for a day’s pay at the highway on-ramps at 6:30 AM (or, as the neo-liberal mindset would frame it – the entrepreneurs).

      1. armchair

        Damn it, we could unleash potent forces if we just got rid of the lawyers. When a person’s knee gets torn up on the job, give em’ a couple grand, an aspirin and tell them to get over it. That’s all you need to do.

        Think about this. If the states weren’t so desperate for money, they wouldn’t have to run the system on the cheap. If health costs were lowered, then the system wouldn’t be so expensive. A worker’s comp agency has to balance its objectives between not bankrupting the state and not screwing over hurt people. A hurt worker without an advocate is a sitting duck. One way to make lawyers go away is to abolish worker’s rights. Alternatively the worker’s comp system would be cheaper if health costs were cheaper, and realistic settlements without the assistance of a lawyer might be possible if states had more revenue to pay bills.

        1. JTMcPhee

          History of Work Comp as I remember it — speaking of how “the company” counts its beans: Johns Manville had a problem with people getting slowly sicker on the job (handling asbestos) starting late in the 1800s paid doctors to do studies that proved the asbestos-asbestosis-mesothelioma connection, and gave some rates of worsening of the diseases and hence points at which workers could no longer work. The researchers and doctors were paid for and threatened into silence on the findings, and required to ignore their Hippocratic obligations. Workers had to go to company doctors, who would nurse them along until they were fired for inability.

          At first, the court system’s tort law provided the persistent with some compensation and support commensurate with the harm. Many cases settled, but all contained non-disclosure mousetraps (tell anyone and you lose everything.) And of course the “experts” who testified for both sides were sworn to secrecy too, for money or from fear. But Manville and other corporate creatures got inspired, starting around the 1890s I think, to pitch and successfully write (lobby) into law that “workers comp” system that persists — places an administratively determined value on the “injury,” percent of disability, and the rest, bars tort litigation for WC-“covered” injuries. Even with all that, a lawyer is often needed because the fokking corporate swine do everything in their considerable power and corrupting reach to avoid even paying out the pittance WC provides, especially long-term treatments and care for the many horrific injuries. Once again, the hope is that the injured worker will GO DIE. And yes, there are cheaters, but gee, how surprising that the profits from fokking over the workers so far outweigh the little bits that a few people scam from the other side. Many of the patients I tried to help when I worked as a nurse were WC, and the treatment they got from the insurers, and the “employee advocates” and “nurse case managers” and defense lawyers acting on screw-the-worker policies of long standing, was amazingly cruel.

          “Bankrupting the state?” WC is paid, far as I know, at least in FL, out of an insurance pool that is funded by employers. Subject to the same kinds of actuarial calculations that any other large-pool insurance game undertakes in underwriting. And yes, universal health care (not Obamacare) would, if it could be managed without the full usual apparently inescapable corruption by neoliberal interests and thinking, reduce EVERYONE’s costs. And states are “desperate for money” largely because the Chamber of Commerce and other neoliberal fokkers like the Kochs have strangled the public general-welfare income stream and diverted most of what is left to various kinds of “white man’s welfare” and corporate gifts.

          Here in FL, “worker’s rights” are already largely abolished, and the mopping up continues. Just so’s you know. There are still lawyers who will (for a cut of the limited amounts that WC will pay out if they finally prevail, to the worker’s and family’s detriment, “take cases.” What I learned in law school, first week in Contracts and Torts and Constitutional Law, is that “There are no rights without effective remedies.” What remedies do workers have?

          And for those who want to shoot at the VA, on “inefficiency” grounds and the other neoliberal overt and covert assaults, VA disability is a Workers Comp program too. Max payout for a GI who is 100% permanently and totally disabled is around $30,000 a year. There is no component as with other kinds of insurance structures for enhanced damages for “bad faith” on the part of the government and the privatized functions that make up the disability administration. “Thank you for your service, Sucker!!” And that “award” usually only comes after a decade or more of fighting with a well documented opposition from the people who administer the “system” and requires persistence, luck, and occasionally benefits (not so much any more) from intervention by the injured GI’s elected representative…

        2. animalogic

          All this talk of workplace injury, lawyers and workers comp misses the obvious point that some of these workplaces must be UNSAFE. (It’s always the other workplace that’s unsafe–“our” worker comp payouts are always rorts).
          The answer to all worker comp issues is the same: universal mandatory insurance run by the state and work that minimises physical/psychological injury.
          Naturally it won’t occur as its a cost to business….

      2. reslez

        Heaven forbid employers pay for the body parts they use up and destroy in their workers.

        I agree with Anon, universal health care would resolve a lot of these issues. When the cost is spread out employers whine less when their workers are hurt.

  4. allan

    Yet despite having among the most flexible labor markets in the OECD—with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage—the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.

    Francois Hollande to the white courtesy phone.

  5. Larry

    This song was made in 1983…and the same crap that Run-DMC mention in the lyrics still exists today:

    Unemployment at a record highs
    People coming, people going, people born to die
    Don’t ask me, because I don’t know why
    But it’s like that, and that’s the way it is
    People in the world tryin to make ends meet
    You try to ride car, train, bus, or feet
    I said you got to work hard, you want to compete
    It’s like that, and that’s the way it is
    Money is the key to end all your woes
    Your ups, your downs, your highs and your lows
    Won’t you tell me the last time that love bought you clothes?
    It’s like that, and that’s the way it is
    Bills rise higher every day
    We receive much lower pay
    I’d rather stay young, go out and play
    It’s like that, and that’s the way it is
    Wars going on across the sea
    Street soldiers killing the elderly
    Whatever happened to unity?
    It’s like that, and that’s the way it is

    1. tony

      I like old Ice-T.

      The thing about being a man near the bottom in a country with low social mobility means it is extremely hard to get girls. Jordan B Peterson said in The Age of Unequals discussion that the primary motivation for men to become criminals is because it is the only way to have a chance at attractive women. That has been my personal experience with crime too.

  6. Enquiring Mind

    Ageism takes many forms, some more subtle than others. When your friendly local HR department makes a few tweaks to benefits, the newer employees don’t notice, but the wizened veterans take notice. They see the handwriting earlier, and brace themselves for the next steps.

    The HR folks are acting rationally in their supply-side worldview as they look out for shareholders first and consider employees well down the list, if not at the bottom. That treatment of personnel represents a policy of a very high effective discount rate on human capital in the aggregate. When parsed out, there are a few nuances that make the picture clearer. When the top handful get outsized payouts, they are incentivized to reinforce that high human capital discount rate, to the detriment of those down range.

    The graphics showed an acceleration in the ominous trends in the early and mid 1990s. That coincided with the great outsourcing, re-engineeing, re-euphemising of jobs and the economy. In that era, Fortune magazine published a series of articles about the changing nature of the social contract at work.

    One takeaway reflected the new bargain: companies needed to provide interesting work to retain employees, and the latter had to continue to make themselves employable. Those veteran employees referenced above discerned that there wasn’t a bargain but a mandate to become more efficient, all presented with the window dressing of so-called interesting work.

    A more honest presentation would have said work that meets the interest or discount rate, as part of the increasing financialization of the world. The decline in trust also accelerated during that period, whether in companies or the media. We continue to reap the results of that widespread mistrust and discontent during the current election cycle.

  7. Winston

    a different Chris , please listen (see below) and read what Clayton Christensen has been saying. Big companies are mostly brands now. Have offshored main parts of company. Last stage in that development is decline of company, as in case of steel. IBM is presently also classic case as on road to failure as well for same reason. It started at IBM with Gerstner.

    Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy

    Christensen at Gartner Symposium:

    Gartner Symposium ITExpo

    Oh and state/local gopvts favor large companies over small companies!

    Why IBM Is In Decline
    No end in sight for IBM decline as shares near six-year low
    Shortchanging Small Business: How Big Businesses Dominate State Economic Development Incentives

  8. Denis Drew

    In a labor market that contains for the sake of argument 50% rich country workers (e.g., American raised) and 50% poor country workers (anywhere else raised) — must be something like Chicago which is 40% white, 40% black, 20% Hispanic …
    … where pay is set by what I call “subsistence-plus”; meaning set STARTING at the absolute minimum pay workers will tolerate (e.g., $800/wk for American born taxi drivers, me; $400 for foreign born) and then PLUS some more for each additional level of skill (bottom for McDonald’s, more for better English in Starbucks, more for college English and more competent organizing in Whole foods?) …
    instead of pay set by the highest price the consumer is willing to pay — by collective bargaining or a minimum wage …
    … a huge dropout of low skilled, rich country workers will occur as low skilled work pays much below what rich country workers look at as “minimum subsistence” (the labor market will not clear). E.g., American born taxi drivers (me again) and the Crips and the Bloods. How else explain that 100,000 out of my guesstimate 200,000 Chicago, gang-age males are in street gangs?

    To make the psychological point about “minimum subsistence”, today’s rich county labor would gladly work for half of today’s poor country minimum — if it were 100 years ago and that’s the best a much less productive economy could pay. It’s psychological, but a lot of psychological if DNA immutable.

    Now here’s the wind-up — that should implant permanently the unquestionable need for collective bargaining in all labor transactions: A what I call subsistence-plus labor market with 100% rich country workers will have lower pay levels than a collective bargaining labor market with 50% rich/50% poor country workers.

    That’s the whole law and the profits about the need to make union busting a felony (starting in progressive states) as far as I’m concerned.

    PS. This is not an endorsement of Donald Trump’s anti-immigration bender — that would kick down the pillars that our whole civilization is built on (sorry Native Americans) — that could mean 250 million Americans by 2050 instead of the anticipated 500 million. This IS an endorsement or rebuilding high labor union density — the missing balance-of-power pillars of our civilization. (Don’t forget centralized bargaining — the “compleat” balance-of-power pillar of a unionized labor market.

    1. Charger01

      David Simon covered this in “The Wire” and “Show me a Hero”, you have entire sections of the population that are forced to leave or participate in crime as a viable form of employment. We have a surplus population now- and going forward that are not supporter by their labor or any other resource other than transfer payments.
      Please pause a moment and consider that concept. We have a paucity of credible jobs that people can cobble together a living, let alone increase their opportunities going forward.

  9. nothing but the truth

    when everyone is trying to game the system no one has the right to cry morality.

    i have some small businesses that i am selling off. Too many overhead, insurance and legal costs. The line of business is becoming a slave to govt mandated costs and regulations. Customers more interested in injury lawsuits. IQ and attitude of younger employees noticeably poor.

    not looking good.

  10. Sandwichman


    “Conventional economic theory posits that more ‘flexible’ labor markets—where it is easier to hire and fire workers—facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD—with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage—the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.”

    I have been following this so-called “conventional economic theory” closely for nearly 20 years now and can attest that it is not a theory but a hollow assertion. Empirical “evidence” for this assertion is based on “strong priors”: models containing assumptions that generate outcomes consistent with the assertions. GIGO!

    At the core of the flexible labour markets dogma is obeisance to the great god NAIRU, which Jamie Galbraith exposed in all its Emperor’s New Clothes nakedness 20 long years ago: “Time to Ditch the NAIRU”

    “The concept of a natural rate of unemployment, or non-accelerating inflation rate of unemployment (NAIRU), remains controversial after twenty-five years. This essay presents a brief for no-confidence, in four parts. First, the theoretical case for the natural rate is not compelling. Second, the evidence for a vertical Phillips curve and the associated accelerationist hypothesis that lowering unemployment past the NAIRU leads to unacceptable acceleration of inflation is weak. Third, economists have failed to reach professional consensus on estimating the NAIRU. Fourth, adherence to the concept as a guide to policy has major social costs but negligible benefits.”

    In “Unemployment: Macroeconomic Performance and the Labour Market” Richard Layard, Stephen Nickell and Richard Jackman grafted the dubious NAIRU concept onto the anachronistic lump-of-labor fallacy claim to create the hybrid chimera “LUMP-OF-OUTPUT FALLACY” in which central banks enforcing NAIRU anti-inflation policy would ensure that you couldn’t redistribute working time. You can’t make this stuff up. But Layard, Nickell and Jackman did. Nonsense on stilts.

    “To many people, shorter working hours and early retirement appear to be common-sense solutions for unemployment. But they are not, because they are not based on any coherent theory of what determines unemployment. The only theory behind them is the lump-of-output theory: output is a given. In this section we have shown that output is unlikely to remain constant.”

    This is simply not true. Shorter working hours is based on the same theory as the theory of full employment fiscal policy. Keynes’s theory. But don’t take my word for it. In an April 1945 letter to T.S. Eliot, Keynes wrote:

    “The full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well by consuming more or working less. Personally I regard the investment policy as first aid. In U.S. it almost certainly will not do the trick. Less work is the ultimate solution.”

    Galbraith’s “Time to Ditch NAIRU” has 293 citations on Google Scholar. Layard et al’s “Unemployment” has 5824. Economists flock to dogma like flies to shit.

  11. Ishmael

    Some strong starting points without requiring additional govt interference:

    Shut down both legal and illegal immigration. When you can not employ the ones who are here why let more in.

    Inforce the borders and deport people who are here illegally.

    Get rid of anchor babies

    Put tariffs on imports and I mean substantial tariffs. Worrying about Smoot Hawley is a canard. At that time the US was the biggest exporter now we are the biggest importer. I would also have a sliding scale depending upon labor rights. Some would scream we need to worry about the poor in these countries. How about worrying about the poor in this country. It has reached the point that you need to look around at your family and friends and say what would you do so that these people prosper. If you are not willing to say practically anything legally then you will probably not prosper.

    Cut back govt at all levels. This is a major misallocation of resources. This is especially true of the military industrial security area. Come up with new health care laws. Focus resources to generate more doctors in the US and less people with unproductive degrees.

    Close down overseas bases. Stop wars.

    1. Ishmael

      One other thing, if you look at a lot of the jobs that men use to take and make a good living it was construction, plumbing, gardening, janitorial, cooks and etc. All of these jobs have been filled by illegal aliens who live 25 to a house, pay no taxes, get free health care and suppress wages.

      I know, I am a racist!

      1. tony

        Assuming there are enough natural resources, it is quite possible to arrange an economy in a way that benefits the population of the recipient country. Think about it. The immigrants are healthy, hardworking adults. So you get their labour without investing in twenty years of raising them and then taking on the burden of those who are unhealthy or anti-social.

        The US is an immigrant country with a weak safety net so an intelligent policy could easily benefit both parties.

      2. hunkerdown

        With respect, if your givens were in the least interesting or useful to the greater good, rather than articles of faith (which is just a polite term for self-delusion that benefits the power structure) designed to benefit your imaginary friends, satisfy your need to dominate and abuse others, and give your poor lonely misery some company, you might have something worth a detailed, thoughtful response. As it is, I think you need to explain yourself a bit better.

        1. Ishmael

          Seems very clear to me. You must have a low IQ if you need someone to explain it to you.

          Illegal aliens generally do not pay taxes because they get paid with cash! Sorry, if they have to pay such taxes like sales tax that everyone else needs to pay.

          1. hunkerdown

            “Stupid” is typical American conformist speak for “would offend my bosses”.

            You had two points that sounded reasonable: “Shut down both legal and illegal immigration. When you can not employ the ones who are here why let more in.” Because markets. Those who own a government that was designed to be bought want to drive down the price and increase the availability (“flexibility”) of all labor, of course. Plenty of Americans would be happy to work off the books for a less demeaning wage under less demeaning conditions and less demeaning people. (As if Social Security isn’t going to be looted by the oligarchs by the time I’m of age to retire) They wouldn’t risk death and torture to come here if EMPLOYERS weren’t withdrawing the benefits of employment from those already here and offering those benefits to others. While stopping the influx would be a fine idea, until you get control over those who are paying them to come here — making EMPLOYERS into felons for any support of immigration violations would be a far, far more effective use of enforcement power than beating down brown people at arm’s length to satisfy your cultural conceits — supply and demand works both ways.

            And “Put tariffs on imports and I mean substantial tariffs” is in the right spirit, but fails to acknowledge, with the usual hostility to self-awareness and past actions that defines the USAmerican “mind”, that other nations have just as much right to respond any way they feel like, and the “trade agreements” the USA has signed grant them contractual grounds (pacta sunt servandum, remember?) to respond disproportionately with their own tariffs, penalties against the USG, and other demerits in the international sphere which are not constrained by your triumphalism in any way. Those means would not be as effective as simply repudiating every multilateral “trade”-related agreement the USA has ever signed and not, quite literally, pawning the USA for a mess of bourgeois pottage.

            It’s ridiculous that you should be depending on the US government to evaluate human rights conditions, when human authorities are never bound by evidence unless they want to be. Malaysia’s admission into the TPP, and the politically-driven mulligan they received on their human rights conditions, shows the utter folly of letting ambitious bourgeois careerists hide behind corporate veils of any sort.

            If you only believe that people who pay taxes should have rights, you support the very definition of plutocracy, and that makes you a disease vector.

      3. ProNewerDeal

        “illegal aliens…pay no taxes, get free health care”

        You have it back-a*ward. Undocumented workers pay taxes (FICA, SS, etc deductions), that they will not receive when they reach old/SS age, even if they are in the US at that future time. There is no “free health care” for undocumented workers, not eligible for Medicaid or ACA. Emergency room service does not qualify as health care.

        Even US citizens have to go through a bureaucratic nightmare to get & maintain Medicaid or ACA, which is CRAPPY INSURANCE, not ACTUAL HEALTH CARE. At the point of needing actual health care, USians are often denied the service or the insurance refuses to pay after the service is done & face another bureaucratic nightmare in fighting the payment refusal. Undocumented workers lack access to even this crapified level of “health coverage”.

        I do agree that increasing supply (H1-B for STEM pros, undocumented for HS-degreed workers) lowers wages. Also, restricting supply (AMA restricting physician graduates such that US physicians per capita lower than OECD levels) increases wages. Econ101 supply & demand, perhaps neoliberal economists need “retraining” & should enroll in Econ101 at the local community college.

        If there was an actual desire to limit undocumented immigration, the solution is large fines on Illegal Employers. How about $100K per undocumented worker found. In addition, end the Drug War, which causes violence & refugees, especially in Mexico & Central America. Revoke or at least amend NAFTA to un-decimate the MEX agricultural industry.

        1. Ishmael

          Generally I have no problem with large fines for companies which employ illegal aliens.

      4. marym

        People who work “off the books” don’t pay income taxes regardless of their immigration status. They do pay many other types of taxes, often regressive – sales tax, excise tax, property tax (or their landlord’s property tax.

    2. DarkMatters

      1. “When you can not employ the ones who are here why let more in.”
      Cui bono? Because EMPLOYERS love it, from large corporations to my neighbors who hire low-paid gardeners. Maybe this class-ifies me, but that would have considered to be an extravagance when I was growing up. I wonder how many people who complain about illegal immigrants actually rely on their services?

      2. “Inforce the borders and deport people who are here illegally. Get rid of anchor babies”
      Bit late for that. I do agree we really have made a mess that needs attention and an intelligent cleanup. Even so, do you think we could competently amend the Constitution at this point, which is what it would take? Practically, I do think that better border security coupled with (really) improved labor conditions, both here and in Mexico (Imagine! An international labor effort!) could improve things. But TTIP and TTP are pushing the other way.

      3. “Put tariffs on imports and I mean substantial tariffs.”
      I like the idea, but only sovereign nations can do this, and we’re not. We’re subject to international courts. In this case, specifically, expect corporate lawsuits against the USA, arguing that the US should compensate corporations for loss of profits caused by said tariffs. These will be arbitrated by Investor-State Dispute Resolution panels, courtesy of said TTIP and TTP, where the no-appeal panels are staffed by international trade lawyers, who otherwise work for international corporations. Yes, by all means, worry about the poor in this country, but don’t leave out anyone else.

      4. “Cut back government at all levels.”
      Down with traffic lights! (This statement of yours hooked me into writing this entire reply). Strict libertarians strike me as being more than a little Pollyann-ish. The only historical example that comes close are now called the dark ages. In those idyllic times, a bunch of French Norman good-ol’ boys could hie themselves over to Italy and wreak havoc, I mean make their fortune. Governments are necessary to contain dispute resolution, and so require power superior to all other factions, but, for the sake of equal justice, should be accountable in some way to all. I could go on, but “no government” advocacy in our times leaves a power vacuum just at a time when corporations and financiers are doing their best to take over. As the Federalists argued, we do need a strong government, to ensure that the will of the people can be vigorously asserted. Not to say that it’s working out so great right now, but it would be nice if we could in some way place competent people at the helm to right the ship. Speaking of Pollyanna….

  12. RD

    All labor reform policies put forth by Republicans and their policy activation arm(Dems) have been to make life easier and richer for CEO’s, not to help workers. So now economists are surprised by the results? What a useful profession they are.

  13. run75441


    You already have him on your thread. The 40 hour work week was established under Roosevelt. If you wish to reverse or stave off the declining Participation Rate, then decrease the required number of hours work to 32. We have agreed before that Labor is the lowest cost when compared to Overhead or Materials. In the end, the difference in cost would be made up by higher productivity.

    Sandwichman is a proponent of this and I agree with his analysis.

  14. Alan B.

    I was hired in 1953 as the 13th staff announcer at an Oklahoma City TV station because, although it was december, they knew that they would be airing live commercials for 13 competing air conditioner brands, and they needed the 13th body to avoid a conflict. The owner, although reactionary to the marrow, did not believe in staff reduction in times of profit decline. For that reason it was, with good behavior, a lifetime job. Everyone prospered. The employer prospers to this day as owner of several metro newspapers and broadcast outlets and, until 2012, the Grand Ole Opry. Oh for the old days!

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