Chart of the day

According to the Center for Economic and Policy Research,

The United States is the only advanced economy in the world that does not guarantee its workers paid vacation. European countries establish legal rights to at least 20 days of paid vacation per year, with legal requirements of 25 and even 30 or more days in some countries. Australia and New Zealand both require employers to grant at least 20 vacation days per year; Canada and Japan mandate at least 10 paid days off. The gap between paid time off in the United States and the rest of the world is even larger if we include legally mandated paid holidays, where the United States offers none, but most of the rest of the world’s rich countries offer at least six paid holidays per year.

In the absence of government standards, almost one in four Americans has no paid vacation (23 percent) and no paid holidays (23 percent). According to government survey data, the average worker in the private sector in the United States receives only about ten days of paid vacation and about six paid holidays per year: less than the minimum legal standard set in the rest of world’s rich economies excluding Japan (which guarantees only 10 paid vacation days and requires no paid holidays).

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

 

Chart of the day

According to the National Employment Law Project [pdf], if Congress fails to renew the Emergency Unemployment Compensation program before the year’s end,

2.1 million workers will see their benefits cease immediately after December 29, 2012, and over 930,000 more will be unable to collect any sort of federal benefits in the first quarter of 2013, including 400,000 in January alone. And assuming the economy continues to produce jobs at the current rate of growth, by the end of 2013, up to 5.7 million claimants who exhaust state benefits without finding work will face sustained unemployment without any federally funded jobless benefits

Nostalgia for the Twinkie economy

The Twinkie Manifesto, like Twinkies themselves, cuts two different ways.

Twinkies taste good but they’re not particularly good for you. (And, of course, they’ll continue to exist, when some other corporation buys the brand from Hostess.)

Likewise, focusing on the differences between the economy now and in the 1950s shows that things can be different. But it also represents a nostalgia for a supposed Golden Age of American capitalism, aka the Twinkie economy, instead of looking forward.

Do we really want to return to a time when, yes, marginal tax rates were high and workers’ wages were rising but when, at the same time, employers fought against unions tooth and nail, when U.S. corporations were riding high only because every other advanced economy had been destroyed but were in the process of being rebuilt, when the jobs in manufacturing were mind-numbing and dangerous, when those in the top 1 percent had the means and incentives to undo all the regulations imposed on them under the New Deal?

In my view, it’s a problem that comes with our focus (and I consider myself as culpable as anyone else on this charge) that comes with dividing postwar capitalism into two periods: the “good capitalism” (roughly 1950 to 1976) of rising wages and decreasing inequality and the “bad capitalism” (roughly 1976 to the present) of stagnant wages and rising inequality.

One option, represented in the Twinkie Manifesto, is to return to the period of “good capitalism.” The other option is to move beyond capitalism and to create the kind of economy in which workers actually have a role in deciding how the economy is structured.

And that may be the ultimate lesson of the Twinkie economy: deciding either to accept Hostess’s raw deal and continue working with declining wages and benefits or to go on strike knowing that ultimately jobs would be eliminated is no choice at all.

Cartoon of the day

Special mention

 

Restructuring work

What is the future of work in the United States?

Daniel Little is right when he argues that companies are restructuring work—exporting jobs, lowering wages, and so on—to increase profits. And his conclusion couldn’t be more pessimistic:

This line of thought seems to have disjunctive consequences, neither of which is promising for the future of the American middle class: either companies will restructure their activities to incorporate a higher mix of high-skill workers in substantially smaller numbers; or they will continue to expand activities around a low-skill model while exercising substantial downward pressure on wages.  And this implies that employment growth will be slow, or else there will be more robust jobs growth in low-pay jobs leading to a falling standard of living for the majority of workers.

The only problem with Little’s analysis is that he places all the initiative on employers. In previous generations, workers didn’t get paid more because of their level of knowledge and skill. They managed to increase their pay because they organized into unions and forced employers to engage in collective bargaining for higher wages and benefits.

The solution, therefore, is not to return manufacturing jobs to the United States. Let’s produce services and import manufactured goods. Fine. But let’s make sure service-sector workers are organized. And, in addition, run the enterprises where they work. Those are the only ways to create “good” jobs.

Protest of the day

More than 2 million factory workers went on a one-day strike across Indonesia today to demand better benefits and to protest the hiring of contract workers.

The workers want an increase in the minimum wage, health insurance and social security for all employees, and a revision of government policies that allow companies to hire temporary workers without benefits.

Chart of the day

Here are some of the conclusions from the report by the Congressional Budget Office comparing the compensation of federal and private-sector employees:

• Overall, the federal government paid 2 percent more in total wages than it would have if average wages had been comparable with those in the private sector.
• On average, the benefits earned by federal civilian employees cost 48 percent more than the benefits earned by private-sector employees.
• Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector.

Good! Now raise the wages and benefits of all private-sector workers to match those of federal workers.

The report also notes two other items of interest:

1. Federal government employment has been shrinking as a percentage of total employment in the United States.

In 1980, when about 79 million people worked in the private sector and 13 million worked for state or local governments, federal employees made up 2.3 percent of the workforce. By 2010, private-sector employment had reached 111 million and employment by state and local governments had reached 20 million. As a result, federal civilian employees accounted for 1.7 percent of the workforce in 2010.

2. The difference in benefits between federal and private-sector workers is a result of worsening benefits in the private sector not overly generous federal benefits.

The federal government provides retirement benefits to its workers through both a defined-benefit plan and a defined-contribution plan, whereas many large private-sector employers have replaced defined-benefit plans with defined-contribution plans. The federal government also provides subsidized health insurance to qualified retirees, an arrangement that has become uncommon in the private sector.

OK, that should set the record straight.

Shared sacrifice—American style

There’s a great deal of talk about shared sacrifice in the calls for budget-cutting and fiscal austerity. But shared sacrifice—American style means lower salaries for workers, lower benefits for children, the poor, and the elderly, and lower taxes for wealthy individuals and corporations.

As Paul Krguman explains, the philosophy now dominating Washington discussion is

a philosophy that says the poor must accept big cuts in Medicaid and food stamps; the middle class must accept big cuts in Medicare (actually a dismantling of the whole program); and corporations and the rich must accept big cuts in the taxes they have to pay. Shared sacrifice!

Nancy Folbre, for her part, demonstrates that balancing the budget is not rocket science:

Increased taxes on the rich could balance the budget and end the showdown over how many billions to slash from social spending.

But, right now, we’re moving in exactly the opposite direction.

That’s the nasty, brutish country we’ve become: one in which the vast majority are being squeezed in order to provide for a tiny minority at the top, under the illusion that we’re all in this together.