Wednesday, February 22, 2012

'New jobs for jobless' pledge a white lie

Business Times - 23 Feb 2012

'New jobs for jobless' pledge a white lie

US firms look for young, energetic and tech-savvy workers, not those middle-aged ones yet to learn how to surf Internet


WE are all familiar with, and occasionally have even uttered one of those common white lies such as 'Thanks so much for that wonderful gift!' or 'You really look great in that dress' or 'Your baby is so cute'. So let me add another one to the list - 'Most of America's unemployed workers will eventually find new jobs'. They won't.

Indeed, this white lie is being articulated by both US President Barack Obama and the leading Republican presidential candidates. While Mr Obama and the Democrats suggest that government-backed program-mes to train unemployed workers would help those who had lost their jobs in the manufacturing industry, Republican presidential candidate Mitt Romney and his supporters argue that an unregulated and untaxed private sector would create those new jobs for the jobless.

But does anyone really believe that men and women between the ages of 45 and 65 who after having worked for 20 years or so in a shrinking manufacturing industry - both as a result of automation and outsourcing and find themselves without a job - will be able to acquire the skills that would help land a job in the growing high-tech sector? These high-skill and high-wage jobs require more than just six weeks of retraining. And let's face it, what private businesses in the new sectors of the economy are looking for are young, energetic and tech-savvy workers - and not middle-aged men and women who have yet to learn how to surf the Internet.

The slight fall in the unemployment numbers does not change this picture in a dramatic way. The American economy is now producing the same amount of goods and services it did in 2007, but doing so with 6.3 million fewer workers. And most of the industries that have been shedding blue-collar workers are construction, transportation, warehousing, waste management and manufacturing.

Overall, the manufacturing sector now employs two million fewer workers than it did just four years ago - though the output of US factories is up about 3 per cent since 2001.

According to the US Bureau of Economic Analysis, industries that are most likely to hire workers these days include agriculture, forestry, fishing and hunting, mining, retail trade, finance and insurance, healthcare, educational services and information technology. But the few expanding areas of the economy, such as education and healthcare, certainly do not need workers with the 'old' industrial skills.

But no one needs to read a long study of the US labour market to figure out that among the growing number of unemployed blue-collar workers in the Midwest and the South, the lucky ones are those who land up in low-paying and non-skilled sales jobs in companies such as Wal-Mart.

And again, those are the lucky ones. Other jobless middle-aged blue-collar workers try to find part-time employment or just stop looking for new jobs, and survive by taking advantage of government unemployment benefits, including food stamps, or subsist for the rest of their lives on the money they can draw from their federal retirement and healthcare insurance programmes.

These permanently unemployed blue-collar workers - and add to them the blue-collar workers who are still employed but scared about their jobs - are concentrated in districts in all states that are in play in the November election. And they tend to exhibit complex and sometimes confused political attitudes.

One assumes that considering their economic problems, these blue-collar workers would be leaning to the political left and support Democratic candidates who call for narrowing the social-economic gap, for strengthening the power of the trade unions, for imposing more regulations on the 'fat cats' in Wall Street and for imposing more taxes on the super rich.

But at the same time, many of these blue-collar workers are also less educated and more traditional in their religious orientation and tend to embrace conservative positions on social-cultural issues such as abortion and gay rights and are less sympathetic to the environmental and anti-gun agendas of the political left. From that perspective, they could be natural allies of the Republican Party.

Indeed, one of the reasons for the expanding electoral base of the Republican Party in recent decades has been the success on the part of the GOP in recruiting cultural conservative blue-collar workers - including many Catholics and Orthodox Christians - in key swing states such as Pennsylvania and Ohio who felt alienated by the growing power of the social-liberal wing - feminists, gay activists, African-Americans and environmentalists - in the Democratic Party.

But in the aftermath of the financial crisis and the ensuing Great Recession, some Democrats were hoping that many of these Reagan Democrats, who were facing growing unemployment and were angry at the bankers responsible for the mess and the business executives who were shipping their jobs abroad, would abandon the pro-free market Republican Party and return to the pro-labour Democratic Party.

Yet many of these blue-collar voters, who saw Mr Obama as a representative of the liberal Democrats they resent so much, ended up supporting the Republicans in 2008. At the same time, Mr Obama refrained for a long time from embracing a populist anti-Wall Street agenda that could have attracted support from unemployed workers who were angry at the 'elites'. Instead, many of them joined the ranks of the Tea Party movement that directed their frustration against Mr Obama and the federal government.

Democrats are now hoping that the rise of the Occupy Wall-Street movement, which has focused more public attention on the issue of social-economic inequality and the decision by Mr Obama to use a more populist rhetoric - for example, calling for increasing the tax rate on the wealthy - could help them win more support among those blue-collar voters in the states that could determine the outcome of the presidential election.

Playing into the hands of the Democrats is the likelihood that the Republicans would choose Mr Romney, a former financial executive and a member of the wealthiest one per cent of Americans (who looks and sounds the part), as their presidential candidate.

Interestingly enough, the emergence of former Pennsylvania senator Rick Santorum as the leading anti-Romney figure among the presidential candidates reflects in part the support that this devoted Catholic and ultra-social-conservative enjoys among blue-collar Republican voters.

In fact, opinion polls suggest that while Mr Romney is winning the votes of wealthy and upper-class Republican primary voters, Mr Santorum's support comes from lower middle-class blue-collar workers who find Mr Santorum appealing not only because of his commitment to traditional values.

Mr Santorum, who was actually raised in a blue-collar family, is also promoting a nationalist economic platform that calls for using tax benefits and other inducement to get US companies to invest in the United States and not in China. And he is arguing that contrary to the conventional wisdom, his blue-collar appeal would make him more electable than Mr Romney the billionaire. And he may well be right.

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