As the overall economic picture in the United States continues to brighten, the job market remains a contentious issue. Yes, the headline official unemployment rate has fallen sharply in recent months to just over 8 percent. But most Americans, judging from polls, remain pessimistic about jobs and see a challenging landscape of high unemployment and stagnant wages. The fall elections promise to hinge on whether people believe that the employment picture is bright or dark. The entire issue, however, remains trapped in a broken framework, harkening back to a past that was never quite so good and is not going to return.
Policymakers and politicians, however, continue to promise, assuring the American people that the future will be a replay of that past of high, safe, and secure employment. Said Chairman of the Federal Reserve Ben Bernanke in his testimony to Congress mid-week: “Notwithstanding the better recent data, the job market remains far from normal: the unemployment rate remains elevated, long-term unemployment is still near record levels, and the number of persons working part-time for economic reasons is very high.” There is nothing inaccurate per se in these words, and to his credit, Bernanke did not gloss over the very real structural problems despite recent improvements. He does, however, see the current situation as not normal. And there’s the rub: it is normal. A new normal, a hard normal, and one that we collectively are strenuously trying to deny.
That new normal is one of deep divides in the American labor landscape. The world of men doing physical labor as a primary occupation is passing away, being replaced by high levels of robotics and ever more services ranging from technology to nursing to entertainment. Conservative commentators like Charles Murray have started to focus on that, as have economists such as Joseph Stiglitz and Eric Brynjolfsson, who has been arguing that the current transformation of the American job market is as dramatic as the changes that occurred when farming became more mechanized and displaced millions leading up to the Great Depression.
But these are marginal, elite voices. In politics and in culture, the discussion is basically who is to blame for the high unemployment for recent years—government, regulators, Wall Street, housing speculators—and what can be done to right the economic ship so that once again, wages and jobs are plentiful. President Obama on the stump in Michigan this week celebrated that “the American auto industry is back.” That was a direct jibe at the Republicans and Mitt Romney for decrying the auto bailout. And it is true that GM as well as Chrysler (not to mention Ford, which did not go through bankruptcy) are once again profitable. But they are not engines of job creation. In fact, their recovery is partly due to shedding workers and pension costs. There are more than a half million fewer auto industry workers than there were at the beginning of the millennium. Those trends are similar throughout manufacturing.
Every month, a new jobs report from the Bureau of Labor Statistics demonstrates the relentless trend of fewer and fewer heavy labor jobs and more and more self-employment and service jobs. It also demonstrates that tens of millions of people have a job but don’t earn enough to stay above the official—and rather low—poverty line. And every quarter, corporate earnings show just how potent ever-evolving and emerging industries such as technology and high-end retail and global industrial companies are and how much those who generate the ideas and execute those strategies get paid.
Meanwhile, the election campaign proceeds as though Washington is the axis around which the job market revolves. Mitt Romney campaigns on a promise of “more jobs, less debt, and smaller government,” presumably in the belief that government policies and Obama’s stimulus of 2009 destroyed jobs or prevented hiring. The Democrats in turn take credit for a reviving economy and a declining unemployment rate, conveniently soft-pedaling just how poorly paid many of those jobs are.
It has long been said that Americans deal forthrightly though contentiously with race, sex, and social issues. But aside from brief protest movements, we remain stubbornly immune from honest discussions about class, about economic divides, and about how there can be forces beyond the easy control of any one nation, one country, and one government. The morphing employment landscape is a force greater than Washington and more long-term than the past four years of financial crisis and weak recovery. We have evidence of that, powerful evidence, in multiple reports every month from government and from industry, yet we cast those aside because admitting those realities would force longer-term thinking and an acceptance that the remembered America of the mid-20th century is gone forever.
The new normal for employment is a vast and thriving class of knowledge and service workers, who are unlikely to be at any one job for more than a decade, if that. It is one of tens of millions of women with some college education staffing the health-care industry or professions ranging from doctors to lawyers. It is one of tens of millions of men young and middle-aged with needed skills in construction and labor that command low and stagnant wages. And it is one of a few million connected to global expansion making massive amounts of money in relative terms. How government policies aid all of those elements and balance conflicting needs, not to mention different parts of the country with very different employment patterns, will matter greatly, but none of it will be effective until we say goodbye to Bernanke’s fabled normal and start to grapple with the world as it is rather than the world as we wish it to be.