Saturday, July 7, 2012

The Unhired And The Vanquished

In the wake of the latest in a series of anemic monthly employment figures, which the government announced yesterday, a Bloomberg story explaining why employers are not hiring says that although businesses are selling things and making profits, business owners are not confident enough in the future to hire people and instead are requiring current employers to work longer hours. The average work week in the US increased last month. Near the end, the story contains this sentence:


The increase in the average workweek would be equivalent to a 325,000 gain in payrolls, according to estimates by economists at Nomura Securities International Inc. headed by Lewis Alexander.


It's tempting to interpret this information in terms of what those unhired workers would mean in political or economic terms. If 325,000 (instead of what was reported, 80,000) people had been hired, the unemployment rate would have dropped dramatically. Instead of falling off as they did, the stock markets would have skyrocketed because the economy would be sure to rapidly improve. Barak Obama's poll numbers would have risen and Mitt Romney's would have fallen. The news media would have been full of talk about all of this for several days. (The effect of those extra hours in creating more profit for owners while our share stays the same or declines would not, of course, be part of the news.)

Mother Jones magazine
But fluctuations in the work week are a routine part of Capitalism. Any time unemployment figures are released, you could calculate the number of "unhired workers" and speculate about what would have happened had those workers been hired. (In the US, although the work week fluctuates, the historical trend is up. See chart.)

One reason people fixate on the actual number of the hired and unemployed is that hiring is actually affected by business confidence. Business people have emotions and those have real effects on our lives.

But remember, too, that before Neoliberalism was adopted as the global economic model, Liberals, Democrats, union leaders and Progressives used to talk about having as a goal "full employment," which would mean that labor was scarce and wages would increase. I haven't heard the phrase "full employment" in a long time. The official unemployment remained at 8.2 percent yesterday. Now, an unemployment rate of five or six percent would be thought of as low, but in better times, those would have been high figures.

A high unemployment rate depresses wages. When many people are applying for each job, the employer can offer a lower wage. Employed workers are more compliant when the unemployment rate is high. They will more readily accept longer hours and cuts to their pay and benefits.

When workers are disempowered, business owners are empowered. Power, or more accurately, the sense of power, is a function of the emotions, which themselves are functions of conscious thought processes and unconscious impulses.

It's the unconscious that most motivates us. Our unconscious impulses derive partly from psychological processes, and some are manifestations of instinctual urges, like the survival instinct, which manifests itself, unconsciously, at various times and in various people, in different ways, and sometimes as either domination or submission.

We may see people starving or hear stories about hardship and suffering. These inputs can eventually filter down into our unconscious and affect our behavior, but they will affect it depending on the means we have at our disposal. Our personalty plays a part, but that too is affected by our material conditions, just as the means we have at our disposal are. In any event our behavior is dictated by a need to resolve emotional conflict, to avoid inner turmoil, to achieve satisfaction. This can be achieved by various means, but it always involves doing something to lessen our fears.

When the unemployment rate is low, workers feel more satisfied, because they know their jobs are more secure and they have more power. When the unemployment rate is high, business owners feel more satisfied.

One doesn't have to attribute any particular values, good or bad, to behavior to understand how unfettered, free market Capitalism works. It's simply human nature playing itself out, in the absence of the kind of controls we gladly put in place to control our behavior in other cases.

Hire more people? Why should I? I feel pretty good right now.



(note: The chart is from Overworked America: 12 charts that will make your blood boil, a Mother Jones article that discusses increases in the American work week. For a fuller discussion about the American work week including the effects of large numbers of women entering the work force see this Wikipedia Organized Labor series article, which contains the interesting factoid that if our work hours had decreased in proportion to how much our productivity has increased, we should be working 12 hours a week right now.)


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