Capitalism can’t provide decent-paying jobs

The usual suspects have attacked Bernie Sanders’s proposal for the federal government to guarantee a job paying $15 an hour and health-care benefits to every American worker “who wants or needs one.”

According to Robert J. Samuelson, “The proposal would add to already swollen federal budget deficits. . .Then there’s inflation. The extra spending and higher wages might push prices upward.”

After listing a number of other “unavoidable” problems, Samuelson concludes:

Americans are suckers for great crusades that make the world safe for the pursuit of happiness. In this context, Sanders’s job guarantee seems a masterstroke. The chronically unemployed need jobs; and states and localities have large unmet needs for public and quasi-public services. It’s a bargain made in heaven.

Back here on Earth, the collaboration looks less noble. The object is to appear good and buy political support. Many of the suggested jobs seem best described as make-work. The irony is that, by assigning government tasks likely to fail, the advocates of activist government bring government into disrepute.

And here’s Ed Rogers:

Democrats want to talk about Republicans living in the past, but the new progressives, as they like to call themselves, are in fact a lot like the old socialists. They want free college, free cash, free health care, new mandates for this and that, and so on. The latest progressive policy du jour to be gaining traction among Democratic Party presidential hopefuls is the so-called “job guarantee.”

What they have in common, in addition to the usual red-blooded American red-baiting, is they both cite a liberal critic of the Sanders proposal, Mother Jones blogger Kevin Drum:

even our lefty comrades in social democratic Europe don’t guarantee jobs for everyone. It would cost a fortune; it would massively disrupt the private labor market; it would almost certainly tank productivity; and it’s unlikely in the extreme that the millions of workers in this program could ever be made fully competent at their jobs.

Let’s face it, Drum is right. The proposal would cost a fortune; it would massively disrupt the private labor market; it almost certainly would lower the official level of productivity; and millions of workers would probably never be fully competent at their jobs.

But that’s only because of how bad things are for workers in the United States right now. According to my calculations (illustrated in the chart at the top of the post), a quarter of full-time American workers currently earn less than $15 an hour. We’re talking about something on the order of 32 million people. And that’s not even counting part-time and unemployed workers. Plus all the workers, whether or not they currently have a low-paying job, who have costly or substandard health insurance.

Employing all those people—at $15 an hour, with medical benefits—would cost a fortune. But not employing them at decent wages already costs the United States a fortune, in individual and social costs. Moreover, there’s no doubt that, if people had a good shot at a federally funded job, they’d be more able to refuse the paltry pay and the indecent kinds of jobs private employers are currently offering. And workers on a federal jobs program might not achieve high levels of productivity—but they would be doing jobs, to repair the economic and social infrastructure, most people would benefit from. Finally, such workers might never become fully competent at their jobs. However, they would develop competencies above and beyond what they can manage to acquire when they’re unemployed or underemployed at their current low-paying jobs.

What Drum and others think is a hard-headed, realistic criticism of a job guarantee turns out to be a stinging indictment of American capitalism itself. The fact that there are “50 million people who would be better off with a government-guaranteed job than with the job they have now” calls into question the way the U.S. economy is currently organized.

That’s what’s really insane—sticking with the existing labor market, not the idea of proposing a Federal jobs program.

Protest of the day

Thousands of California nurses, members of National Nurses United, went on strike for 24 hours last Thursday. Then, a quarter of them were locked out for a further four days by the hospital chain Sutter Health and the independent Children’s hospital in Oakland.

One patient died on Saturday, when she was administered a “non-prescribed dosage of medication” at lethal levels by a stand-in nurse.

The dreaded “A” word

In Britain, the United States has come to represent everything bad when it comes to healthcare and higher education.

“American-style” is the specter haunting the coalition government’s plan to privatize the National Health System.

Ask a Briton to describe “American-style” healthcare, and you’ll hear a catalog of horrors that include grossly expensive and unnecessary medical procedures and a privatized system that favors the rich. For a people accustomed to free healthcare for all, regardless of income, the fact that millions of their cousins across the Atlantic have no insurance and can’t afford decent treatment is a farce as well as a tragedy. . .

So frightening is the Yankee example that any British politician who values his job has to explicitly disavow it as a possible outcome. Twice.

“We will not be selling off the NHS, we will not be moving towards an insurance scheme, we will not introduce an American-style private system,” Prime Minister David Cameron emphatically told a group of healthcare workers in a nationally televised address last week.

In case they didn’t hear it the first time, Cameron repeated the dreaded “A”-word in a list of five guarantees he offered the British people at the end of his speech.

“If you’re worried that we’re going to sell off the NHS or create some American-style private system, we will not do that,” he said. “In this country we have the most wonderful, precious institution and also precious idea that whenever you’re ill … you can walk into a hospital or a surgery and get treated for free, no questions asked, no cash asked. It is the idea at the heart of the NHS, and it will stay. I will never put that at risk.”

“American-style” also haunts the reform of Britain’s system of higher education.

To make up for lost state funding, many public universities, including Oxford and Cambridge, have decided to take advantage of a new law allowing them to charge students a maximum of $14,750 in annual tuition, nearly triple the current price tag. Shelling out huge sums for college may be part of the American way, but Britons don’t like it.

Last week, well-known philosopher A.C. Grayling caused a stir by announcing the creation of a private university, featuring top British and U.S. academics, that will charge nearly $30,000 a year.

That’s what the United States has come to represent: providing quality healthcare and higher education for a select few and forcing everyone else to fend for themselves based on private health insurance, student debt, and for-profit universities.

Healthcare and higher education, in the dreaded word, American-style.

Update

Here’s a link to Terry Eagleton’s response to Grayling’s private university.

Freedom from state intervention for him means freedom to charge students sky high fees. If this catches on, the current crisis in universities will escalate into educational apartheid of the kind that we already have at secondary school level. There will be a number of private unis where students are assigned fags and expect to stroll into the Foreign Office with a third-class degree, and a lot of other places which cannot afford to paint the walls. Just when the real Oxford and Cambridge have been dragging themselves inch by inch into the modern democratic world, an ultra-Oxbridge is being proposed which will probably have an even lower intake of working class students than Cambridge did when I was there in the 1960s. Grayling’s scheme is odious.

Cartoon of the day

Proletarianization and politics

 

Historically, the proletarianization of different social groups—craft workers, peasants, small business people, and so on—has led to a move to the Left in their politics. The latest group to be forced to have the freedom to sell their labor power, and to undergo a change in their politics, are medical doctors.

According to the New York Times,

Doctors were once overwhelmingly male and usually owned their own practices. They generally favored lower taxes and regularly fought lawyers to restrict patient lawsuits. Ronald Reagan came to national political prominence in part by railing against “socialized medicine” on doctors’ behalf.

But doctors are changing. They are abandoning their own practices and taking salaried jobs in hospitals, particularly in the North, but increasingly in the South as well. Half of all younger doctors are women, and that share is likely to grow.

There are no national surveys that track doctors’ political leanings, but as more doctors move from business owner to shift worker, their historic alliance with the Republican Party is weakening from Maine as well as South Dakota, Arizona and Oregon, according to doctors’ advocates in those and other states.

Maybe now, as doctors find their new left-wing proletarian voice—and join other, already proletarianized healthcare workers—we’ll see growing support for a real solution to the healthcare crisis in the United States.

United states of inequality: fact #11

The Stanford Center for the Study of Poverty and Inequality has collected 20 facts about inequality in the United States that “everyone should know.”

The eleventh one, illustrated above, refers to health insurance inequalities (measured in terms of the percentage of uninsured children by poverty status, age, and race and Hispanic origin):

In 2007, 8.1 million American children under 18 years old were without health insurance. Children in poverty and Hispanic children were more likely to be uninsured.

Unfinished business

I still have some pieces of unfinished business. . .

Like the latest report [pdf] from the National Alliance to End Homelessness, which looks at changes in homelessness nationwide from 2008 to 2009. The findings—for example, that homelessness rose (in 31 states and the District of Columbia) after years of declining rates and numbers of homeless people—are certainly not surprising but they confirm the harsh toll exacted by high unemployment and cuts in social services during the Second Great Depression.

And the fact that, according to University of California-Irvine biology professor Diane K. O’Dowd and research professors at Harvard University, Yale University, the Massachusetts Institute of Technology, and elsewhere, “reward systems at universities heavily favor science, math and engineering research at the expense of teaching.” This is one of the unfortunate trends, and not just in the sciences, of the new corporate university.

Then there’s Tyler Cowen’s unfortunate initial dismissal of Michel Foucault’s work (“Most of his books have not held up very well as history, even if he succeeded in drawing people’s attention to some neglected factors.  On top of that, his theoretical framework is incoherent.”), although in a subsequent post he does admit that reading Foucault “is one useful path out of extreme positions of methodological individualism.” Most economists have remained mostly ignorant of Foucault’s writings (not knowing enough to even be dismissive). But I can recommend two useful references: one general, Gary Gutting’s Foucault: A Very Short Introduction (Oxford University Press, 2005); and one specifically for economics, Jack Amariglio’s “The Body, Economic Discourse, and Power: An Economist’s Introduction to Foucault,” History of Political Economy 20 (1988): 583-613.

And Maxine Udall’s unfortunate defense of the “science of economics,” as a critique of David Brooks’s idea of economics as art, in which she conflates economics with the concepts and mathematical models of neoclassical economics. Even on those grounds, she mistakenly assumes (in discussing the economics of health), she assumes that resources are being efficiently allocated to health care—thus putting the economy on its production possibilities frontier and creating a false tradeoff between taking “resources away from health advantaged people in order to give them to health disadvantaged people.” She should know both that are non-neoclassical theories of the economics of health and that current the health care system in the United States is far below its potential.

Finally, there’s George Demartino’s superb summary of the state of discussion within the American Economic Association about conflict of interest and disclosure.

Economists are creative people who love to solve pressing social problems. If we haven’t yet solved the problem of conflict of interest in economics, perhaps it’s not because the problem is so darn difficult. Perhaps it’s because we’ve never really tried.

Done! Now, back to building that bridge. . .

United states of missing health insurance

Percent without Health Insurance Coverage
Universe: Civilian Noninstitutionalized Population
Data Set: 2009 American Community Survey 1-Year Estimates
Survey: American Community Survey, Puerto Rico Community Survey
United States by State

Picking workers’ pockets

Unemployment ruins the health of people who have lost their jobs, or worry about losing their jobs. Now, it’s costing those who have not yet lost their jobs more to keep their health insurance. That’s because corporations are requiring workers to pay a larger percentage of their health plan coverage.

According to a new study by the Kaiser Family Foundation, in 2010 covered workers contributed a greater share of the total premium. This represents a radical change from the previous decade, when workers’ share remained roughly the same. (This itself is not such a rosy scenario, since health care premiums increased some 114 percent over the decade, thus requiring workers to fork over more and more money to maintain coverage for themselves and their families.)

In addition, workers face both increases in deductibles and cutbacks in health plan coverage.

The authors of the Kaiser study understand well the role of unemployment in causing the current corporate take-backs:

Tracking whether and how worker out-of-pocket costs continue to grow will be an important focus for the survey over the next few years. The slow economic recovery and continuing high unemployment suggests [sic] that this trend of increasing out-of-pocket costs will persist, as workers have little clout to demand better benefits or lower costs in the current labor environment.

While corporate profits continue to rise, as wages remain stagnant, corporations are also deciding to distribute a smaller share of those profits to cover their workers’ health. Workers’ pockets are being picked twice, while they work and when they try to keep their health.

Capitalism kills

Capitalism kills. Literally.

According to a new study published in the British Medical Journal (as reported in the Guardian), in 2007, for every 100 people under 65 dying in the best-off areas of England, Scotland, and Wales, 199 were dying in the poorest. Among under-75s, for every 100 people dying in the best-off areas, 188 were dying in the poorest.

This is another area where the parallels between the inequality in the years leading up to the Great Depression and the situation prior to 2008 are stark:

The last time in the long economic record that inequalities were almost as high was in the lead up to the economic crash of 1929 and the economic depression of the 1930s.

And the situation is probably going to get even worse:

“The economic crash of 2008 might precede even greater inequalities in mortality between areas in Britain,” they said.

While rates of rising inequalities may have been slowed “some underlying factors, such as unemployment, have been rising rapidly over the course of those two years [2008 and 2009]. Furthermore, in absolute numbers, unemployment has increased fastest in the poorest areas.”

Unequal death rates are a result both of the inequality that preceded the current crises of capitalism and of the unequal impact of those crises.

Premature death is another consequence of capitalist inequality.