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Tuesday, June 22, 2004

Running To Stand Still

Great post here from Crooked Timber about what's wrong with this economic recovery as compared to previous ones.

The downside to the flood of articles touting how "productive" American workers have become is the fact that Americans are working more and more, harder and harder, with longer and longer hours, for less money, or at least less in terms of real purchasing power.

It's as if the worker is on a treadmill that's being turned up.

This problem is even worse if the increased price of certain commodities - oil in particular - leads to across-the-board price inflation not accompanied by wage inflation. The price inflation could exert upward pressure on interest rates, which would put the squeeze on many who are already mortgaged to the hilt.

It's not especially strange from an economic standpoint that an employer would attempt to pawn more risk on their employees (in the form of fewer job guarantees, benefits such as pension and health coverage.) What is strange, in my view, is that those who lead the public sector are advocating exacerbating the problem of pushing off more risk on those least able to afford it. They advocate shifting tax burdens towards employees and away from employers and holders of wealth. They push for eroding worker protections and shredding social safety protections.

Though there are not by any means masses starving in the streets, there are almost certainly more people who are one accident, one illness, one bad day from being in truly dire straits.

How will workers exposed to ever more risk respond to all this being dumped into their lap, when it becomes to difficult to ignore? There are a number of possible answers to this quandry, and none of the answers paints an optimistic picture of our nation's future.


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