Tuesday, August 13, 2013

American Economy is Not "Left to its own devices"

Citing recent employment statistics, Harold Meyerson claimed in the Washington Post that the American Economy is Eroding American Jobs. He cites the large number of part-time and temporary jobs embedded to the stats, as well as a decline of weekly hours worked. He acknowledges that the ObamaCare mandate on employers to insure all full-time workers—those working 30 hours or more a week—is partly to blame: "There is, to be sure, much anecdotal evidence that some employers are cutting workers’ hours to avoid the mandate."

But Meyerson claims that the job picture has allegedly been deteriorating for half a century, saying "the decline of working hours and the rise of low-wage work reflect structural changes in the U.S. economy." (Meyerson doesn't explain how our general standard of living could have grown so much during the same period.) 

There are many aspects to the job picture, and Meyerson's snapshot analysis of the current situation ignores certain phenomenon. For example, entry-level, "temp," and part-time jobs are often the first to emerge in an economy recovering from a severe decline, because businesses lack the confidence to hire full time. Also, the large number of job-seekers tends to temporarily suppress wages and salaries, based on the law of supply and demand. That usually reverses as the economy expands, and Meyerson seems to acknowledge as much: "There’s no doubt that if the economy were at full employment, workers’ hours would be longer and their wages higher."

But Meyerson doesn't want to wait for the cycle to mature, or acknowledge the government's integral role in creating the recent Great Recession. His motive becomes clear in his concluding paragraph:

Left to its own devices, the American economy is eroding the American job. Hours decline, dragging take-home pay down with them. The identity of the boss becomes mystified, much to the boss’s advantage. A government commitment to full employment, backed up by the public investment required to create it, would bolster not just the quantity but also the quality of our jobs. Republicans are dead set against that, however, and most Democrats appear to have abandoned the fight. So much for the American job.

Meyerson doesn't say where the government will get the money for all of this "public investment" will come from, considering the sorry state of the economy. Nor does he explain how the "government commitment to full employment" will work any better than the $12 trillion of deficit spending rolled up over the last dozen years.

I left these brief comments:

Where does Meyerson see an American economy "left to its own devices"; i.e., a free market economy? America has a mixed economy, with government and political interference heavily and increasingly embedded in Americans' economic affairs. ObamaCare's job-discouraging mandate is just one piece of the job puzzle. With the proliferation of constantly expanding labor laws, is it any wonder that companies avoid hiring full-time workers whenever possible? No single law, regulation, tax, or government policy is the culprit. The total burden is.

Beyond the economics, there is the moral. Meyerson's argument amounts to: I don't like the choices my fellow Americans are making, so I'm going to impose mine by government fiat. I'm going to confiscate still more private wealth for government to "invest" as it, rather than those who earned it, sees fit—or whatever other boondoggles some "government commitment to full employment" can cook up. This is the meddling mentality that led to, caused, and exacerbated the Great Recession. By what right?

It's no surprise that the growing array of problems in the American economy coincide with a regulatory welfare state that has reached its most expansive ever. The two phenomena are linked. If statists are going to complain about the economy, let them at least be honest about the economy they are complaining about; an economy of their own making.

Related Reading:

The Stock Market Record, Income Stagnation, and the Welfare State

The Myth of a Stagnant Middle Class by Donald Boudreaux and Mark J. Perry

"Shared Prosperity" Another Name for Failed Policies

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