9. JOBS! J O B S !! J O B S !!!

It’s not the deficits, stupid!   It’s Jobs! Jobs! Jobs!

Nobody seems to be getting the universal message: Globalized capitalism is not going to create the millions of jobs that are now needed for the world’s young. The Economist, in its April 27th cover titled “Generation Jobless” declared that “there are few worse things that society can do to its young than to leave them in limbo.”

But the Economist fails to come to grips with the problem. In its inadequate leader, the  editors suggest reigniting growth, deregulating labor markets, and improving education and training. What their mantra doesn’t even consider is the structural failure of the market economy in an era of revolutionary transformation of the means of communications (the internet) and production (automation and robotics). As to re-igniting growth, this may be artificially plausible in the short term, but in the long term the driving force of the rapidly increasing populations which dominated  20th century economies can never be repeated.

The globalized market is today dominated by corporations. These are focused on creating profits not jobs. The corporate managers calculate that automation is more profitable than workers. So overall, they hire less and fire more in the name of “efficiency.” The ultimate result is that world-wide corporate profits are rising but more than 300 million young people are without employment.

Corporations have been undergoing what economists call “creative destruction. Much of this is at the expense of the younger generation.” “Downsizing” and “out-sourcing” for the sake of greater efficiency does not produce new jobs. Drastic cut-backs in training programs have been the case in both the US and the UK. Companies have come to regard that filling jobs is just like buying spare parts — management expects them to fit and are not concerned about any long-term warranty.

The rich who control the corporations are wary of change, much as the French nobility was at the time of the French Revolution of 1789. The politicians are nervous too because they know their tenure will be limited if they cannot “re-ignite” their national economies.  And the economists are divided: is the answer to the mounting global debts austerity or even more debts? There is consequently little chance for real reform.

Blighting the lives of so many young jobless certainly spells future disasters: mass violence, terrorism, the end of democracy, military dictatorships, or blood-stained anarchy. The pathetic lack of a rational program by those staging the impressive sit-ins on Wall Street and at St. Paul’s last year showed how those with a desire for reform were unable to present clear alternatives.

I tried to present a few clear steps which ought to be taken. My radical proposal focused on the urgent need to legally transform ALL corporations into cooperatives. Such an overhaul would mean that the workers would own the shop rather than the shareholders. The time has come to end the economic domination of corporations whose subversion of democracy has been well-documented. Yes, as cooperatives their operations would be less efficient, competitive, or focused on profits. However, the members would be more concerned with jobs, training, the impact on the environment and the long-term prospects. Morality could once again play a role in economic life. I presented this in great detail in Dollars or Democracy (2003), citing Mondragon in Spain, the John Lewis Partnership in the UK, and UPS in the US as partial role-models.

A vast re-ordering of our economic perspective should follow:  An acceptance of the importance and benefits of state management, for example. Privatization of national companies, like British Rail, British Telecom, British Airways and now its likely takeover of the UK Post Office, has resulted in profit for the very few but has not created significantly more jobs for the nation.

Of course reforms which tend to expand government expenditures, are bitterly opposed by those on the extreme right, such as the Tea Party backers in the US and the right wing of the Tory party in the UK, because they inevitably expand the role of government and reduce the power of the private sector. Here the choice, as far as unemployment among the young is concerned, becomes a highly political one. Few corporations will either hire or train youths just out of school.1 So who is going to create these millions jobs but the state?

In my blog on Mentoring in February I suggested that governments around the world introduce Mentorships for young people as a way to give them a positive start in life. Many readers have replied to me that this is a positive step they endorse — but the media have not taken it up. (The BBC apparently considered it but without follow-up until now.) Altering the unpaid, charity aspects of mentoring into an officially recognized wage earning profession could swiftly take the stigma of unemployment from millions of young people and give them highly useful social roles early in life. Creating meaningful new jobs must become a universally accepted social responsibility. We owe that to the next generation.

1″A more entrepreneurial British economy may have worsened the problem. The share of private sector employees at big firms (with 250 or more workers) fell from 50% to 40% over the past decade.”  “Generation jobless,” The Economist, April 27, 2013, p. 60

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5 thoughts on “9. JOBS! J O B S !! J O B S !!!

  1. Michael E Porter and Mark R Kramer write interestingly in the Harvard Business Review about the concept of shared value and how companies remain trapped in an outdated approach to value creation that has emerged over the past few decades, continuing to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success.

    They would be interested to hear your views.

    http://hbr.org/2011/01/the-big-idea-creating-shared-value

  2. Must anarchy ensue to jolt shareholders into seeing the wider benefits of cooperatives? How can a change of this tenet of capitalistic democracy be implemented?
    A recent research from the University of Michigan (in the latest American Economic Review) found that as income levels increased, so did happiness levels of the respondents (all people earning above $500,000 per year described themselves as very happy, and only 35% of those earning $10,000 and less claimed to be). More money is considered more freedom. What would have to change to alter this correlation?

    • Randy
      So good to hear from you ( belatedly on my part!) I have not written texts on paying for youth employment schemes like mentoring.
      However, forms of “quantitative Easing” QE – for the young would be an easy and most welcome way to proceed. Perhaps a miniscule
      tax on tweeting could be another!

      Cheers

      Yorick

  3. Pingback: 50. Techno-driven change | Yorick's Blog

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