Wednesday’s story about the Hydronic Lift, the Italian company that closed its doors while workers were on vacation, forces us to ask the following question: whose uncertainty are we talking about?
In recent years, neoclassical economists and right-wing politicians have focused exclusive attention on employers’ uncertainty in the face of changes in taxes and government regulations. Their idea is, the economic recovery is being held back by the high degree of uncertainty on the part of the nation’s “job-creators.”*
But what about workers’ uncertainty? In Italy, they don’t know if, when they go on vacation, their jobs will be available when they return. In the United States, workers don’t know if their incentive pay will be reduced or, more generally, if benefits will be cut, their wages reduced, their jobs eliminated, or their hours cut back.
Workers’ uncertainty is, of course, nothing new. It begins the moment their ability to work becomes a commodity. As Eric Hobsbawm wrote, during the Age of Capital (p. 258),
If any single factor dominated the lives of nineteenth-century workers it was insecurity. They did not know at the beginning of the week how much they would bring home at the end. They did not know how long their present work would last or, if they lost it, when they would get another job or under what conditions. They did not know when accident or sickness would hit them, and though they knew that some time in middle age—perhaps in the forties for un-skilled laborers, perhaps in the fifties for the more skilled—they would become incapable of doing a full measure of adult physical labour, they did not know what would happen to them between then and death. Theirs was not the insecurity of peasants, at the mercy of periodic—and to be honest, often more murderous—catastrophes such as drought and famine, but capable of predicting with some accuracy how a poor man or woman would spend most days of their lives from birth to graveyard. It was a more profound unpredictability, in spite of the fact that probably a good proportion of workers were employed for long periods of their lives for a single employer. There was no certainty of work even for the most skilled: during the slump of 1857-58 the number of workers in the Berlin engineering industry fell by almost a third. There was nothing that corresponds to modern social security, except charity and relief from actual destitution, and sometimes little of either.
And now, of course, those economists and politicians who are most concerned about employers’ uncertainty want to dismantle the same “modern social security” that has mitigated at least some of the “profound unpredictability” faced by those who are forced to have the freedom to sell their ability to work.
*What they’ve done, of course, is take a fundamentally Keynesian proposition—that investors cannot know what is going to happen in the future, and therefore make rational calculations about expected profitability, which makes investment demand unstable—and transform it into the idea that the government is to blame for the Second Great Depression.
As if on cue, one reader [th: db] directed me to a blog post about the current depression in Harlan County.
While many working Americans enjoyed a paid day off from work Monday, Labor Day meant nothing to many residents in Eastern Kentucky, where the coal industry is shrinking. Harlan County had the state’s highest unemployment rate in July, 17.2 percent. The national average was 7.4 percent. In Harlan County, where 29,000 people live, 1,906 were out of work and actively seeking employment, but there are hundreds more who are unemployed but have exhausted their jobless benefits, says an editorial in the Harlan Daily Enterprise.
“As a result, it is well documented that our entire community — whether you are working in mining, health care, education, private business or any other occupation — is suffering,” the editorial says. “It goes without saying that many are frustrated. Miners who have worked long, hard years have no prospects for jobs at this time. Many of these same miners have, or will soon, exhaust their unemployment compensation benefits. We shudder when thinking of what is next for them and their families. The support industries are seeing the same scenario.”