"For corporate America, the Great Recession is over. For the American work force, it's not."
That's how David Leonhardt of the New York Times puts it, as he grapples with a quandary that we'veraised several times lately: The economy is growing again, and corporate profits are off the charts. So why is job growth still so slow? And how have other countries managed to keep unemployment lower than ours, even with slower economic growth?
Some observers lately have blamed the problem on structural factors -- there's a mismatch, they say, between the types of jobs available in a given location, and the types of skills that workers have. That's a problem that only long-term retraining efforts can likely fix.
But Leonhardt, a respected economics columnist for the Times, appears to disagree. One "obvious" explanation for slow job growth, he argues, is a shift in power away from workers and toward management. Leonhardt writes:
Relative to the situation in most other countries — or in this country for most of the last century — American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up.
"For all their shortcomings," Leonhardt writes, "unions remain many workers' best hope for some bargaining power."
As a result of this shift in power, Leonhardt contends, the pain from the current downturn isn't being shared equally. Workers who have a job have actually seen their wages rise faster than inflation since 2007. But unemployment remains at 9.4 percent, and long-term joblessness is becoming a chronic problem. In Germany and Canada, Leonhardt notes, some companies and workers have agreed to job-sharing programs, in which everyone's hours are cut, thereby averting layoffs. Sen. Jack Reed, a Rhode Island Democrat, is pushing a bill that would encourage similar programs here, but its prospects are uncertain.
Leonhardt doesn't mention it, but a decline in workers' bargaining power may also be making it easier for companies to replace American workers with lower-paid foreign ones, and with machines. That's the argument made recently by Harold Meyerson of the Washington Post. In Germany and other countries, Meyerson wrote, advocates for labor and the public are better represented on corporate boards, giving them more sway to push ideas such as the jobs-sharing program.
Leonhardt also warns that the Washington-based effort to cut government spending -- the top priority of ascendant house Republicans -- could make things even worse by hampering economic growth. "The risk this year is that they will start reducing the budget deficit immediately by cutting federal programs," he writes, "rather than having the cuts take effect in future years."
And in what appears to be a shot at those who point to structural forces, Leonhardt concludes that there's no reason to treat the jobs slump as a problem without solutions. "For starters," he writes, "it would be worth figuring out what other countries are doing right."
American Federation of State, County and Municipal Employees