“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.” — Abraham Lincoln
Today, Wall Street breathed a collective sigh of relief. The July employment numbers came out, and they exceeded expectations. Instead of generating 85,000 new jobs, businesses managed to fill 117,000 new positions. The added jobs brought the ‘official’ unemployment rate down to 9.1 percent and signaled that we might yet avoid a second economic contraction. The economy has stabilized, and that’s something. But we still have a long way to go. (It takes 120,000 net new jobs each month, experts say, just to keep up with our ever-growing workforce.)
So, three years and nine months into this economic morass, we’re still stuck in neutral. What, if anything, you may ask, will it finally take to get us back in gear, zipping down the road to recovery? In my opinion, it will take two things: honesty from our public officials and a single brief, but decisive, piece of workplace reform legislation.
First, our elected officials need to level with us about the true nature of the economic mess we’re in. They could start by acknowledging that the ‘Great Recession‘ is, in actuality, a depression. (Since our difficulties began, back in December of 2007, the U.S. Gross Domestic Product has shrunk by more than 10 percent — a key determiner of a depression. Second, our real unemployment rate is approximately 22 percent — or 2.5 times the ‘officially’ acknowledged rate of 9.1 percent. The government’s severe under reporting stems from its insistence on using an inaccurate unemployment measure, known as U3. U3’s formula accurately estimates unemployment rates in mild recessions, but it does a poor job during longer, deeper economic contractions, such as this one.
Once the government acknowledges the true depth and breadth of our economic problems, the need for decisive political action will become clear. With one in five Americans either unemployed or seriously under-employed and the rest worried that a shaky recovery could fall apart and put their own jobs at risk, it’s no wonder that consumer confidence has remained so low, for so long. Consumers will not start spending again and lifting us out of this depression until we put them back to work in secure, stable, good-paying jobs.
One sad irony of major economic downturns like this one is that businesses learn, out of necessity, to operate far leaner at the outset, when the deepest economic contractions occur. Afterwards, when the major danger has passed, many of them no longer feel compelled to expand their payrolls. It happened during the Great Depression and it’s happening now. Only today, we have computers and powerful software apps multiplying the employment dampening effects of our productivity gains. We also have tax code capital-depreciation incentives acting as accelerants.
The combination of a constricted economy and sharp productivity gains has produced a severe oversupply of workers. The solution — and it’s an elegant one — is to limit the amount of time anyone can work, by adopting a 4-day, 32-hour work week for all Americans — hourly and salaried workers alike. An employer who asks anyone to work longer hours would need to pay double-time. And the law should have teeth: stiff fines and even prison terms for employers who violate it. We also should roll it out in stages over a period of months.
Numerous researchers already have shown that a 32-hour work week actually increases worker productivity. And the additional day of leisure time would allow people to pursue extra career training, spend more quality time with their families or get back into the habit of spending money as economy-stimulating consumers.
Before you dismiss the idea of a shorter work week out of hand, consider this: The five-day, 40-hour work week has only been with us since the end of World War II. During the first half of the 20th century most Americans worked 8 hours a day, six days a week. In the 19th century workdays of 10, 14 even 16 hours were common. Shorter work weeks have been recognized, repeatedly, as a civilizing benefit of heightened workplace productivity.
Both Herbert Hoover and Franklin Roosevelt tried to institute 30-hour work weeks to promote employment during the Great Depression, but their independent efforts failed to pass Congress. But with democrats and republicans now firmly committed to reducing the national debt, this might be the ideal time for them to pass such a measure.
America’s cash-rich businesses can clearly afford it. After all, aren’t they collectively sitting on an estimated $2.5 trillion dollars in cash? This is probably the best investment they could make in restoring the national economy and growing their domestic markets.
All we need to do now is get our elected officials to champion this simple measure and demonstrate their willingness to serve the people, advance economic recovery and secure prosperity for all Americans. Are you with me?
- Hiding A Depression: How The US Government Does It (lonerangersilver.wordpress.com)
- Will Obama get another shot? (thedrealist.wordpress.com)
- Record exports temper slowdown fears (markdking.wordpress.com)
- Biden: China’s U.S. Assets Are Safe Despite Downgrade (huffingtonpost.com)
- S&P Slashes US Growth Forecast, Says Current Crisis Is Worse Than 2008 As US At “Risk Of Default”, Ridicules “Transitory” (zerohedge.com)
- David Woolner: FDR Tackled a Jobs Crisis by Putting Americans to Work — Not Handing Out Pink Slips (huffingtonpost.com)
- Is This A Second Great Depression – Or Could It Become Something Worse? (gunnyg.wordpress.com)
- Obama, FDR, and the right way to tackle a jobs crisis (salon.com)
- Separated at Birth (lewrockwell.com)
- Government focused on deficit reduction: Flaherty (canada.com)