It was Paul Tsongas who kept the jobs issue alive in the presidential campaign. As he slowly fades from sight, some believe the issue will fade too. That`s because the long-awaited economic recovery is said to be here. Shopping activity certainly attests to this. Production is up as well, and the work week for those on the job is lengthening.
You can sense a growing feeling of relaxation at the White House. The belief is spreading that as the recovery takes hold, jobs will be coming back, and George Bush will find it easier to fend off his challengers.
But I do not think the jobs problem is of short-term duration, even if the sales and production numbers look better. Something fundamental is happening out there that will make it a pressing concern for some years to come.
Call it productivity, efficiency, restructuring, whatever you will, but it has penetrated deeply into the psyche of American business, and there it will stay.
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Stephen Roach, an economist for Morgan Stanley in New York, has spent much of the last few months studying what he calls a productivity-led recovery that`s now under way.
As he puts it: ”The pace of economic activity will quicken-but it will be fueled by the combination of enhanced productivity and more subdued employment gains. As a result, the unemployment rate will remain stubbornly high. Call it `jobless prosperity.` ”
Businesses have been forced into this strategy by circumstance. Banking and finance and the airline industry, employers of large numbers of white-collar workers, have seen their regulatory umbrellas removed, and now face the cold, steady rain of competition. They have been the leaders of today`s job restructuring.
The protective cover provided by the military-industrial complex is being pulled back too, as defense contractors learn that they must compete on commercial terms. The good old days of fat contracts and fat payrolls cannot be sustained in today`s climate.
In a global arena, firms discover that anything that smacks of higher costs is subject to evaluation, and that includes unproductive jobs, health insurance and other fringe benefits that, while adding to costs, helped millions of Americans enjoy a higher standard of living.
If Roach`s vision is correct, then this bodes ill for millions of Americans who have been ill-trained or are at the lower end of the income scale. Their jobs are at stake.
But it also bodes ill for American society and democracy. Economic efficiency dictated by the forces of the marketplace is threatening many jobs without the balancing prospect that more jobs will be created in other sectors to take up the slack.
First, this heightens the issue of income distribution. There will be more have-nots to worry about and-it is presumed-to be supported by working taxpayers. At the same time, those who continue working will enjoy the fruits of higher productivity in their firms. The gap between rich and poor will grow, Roach said.
”The victims will become more vocal,” he said-if that`s not the case already. As they bring their concerns into the political arena, it will sharpen the political debate.
The kind of recovery shaping up will only divide the U.S. population more. Many wage-earners believe the government is wasteful, remote and ineffective and resent the fact that they may be taxed even more to help fund jobless programs and close the gap between rich and poor.
Those at the bottom end of the scale cannot buy the pro-business line that investment, tax incentives for research and development, and lower capital-gains taxes for new firms will do much good. They believe that such an agenda will only cause them to be more disadvantaged in the future. They favor a more activist government role in the economy.
Capitalism may appear to be in the ascendancy here and around the world, but, Roach says, as many workers see it driving out inefficiency to their personal and financial detriment, they may come to the conclusion that ”it hurts too much” and choose to modify it.
The problem is that it takes the economic gains of efficiency several years to percolate through society and eliminate the inequities between rich and poor. Americans aren`t that patient.
A smart campaigner should focus on how to hasten this process of economic revival by overhauling the tax and educational systems, tilting them toward job creation and training. The country is ready for some big changes, if only it can find the right messenger and the right message.
The jobs issue is here to stay.