Tag Archives: employment

Conspiracy Theories

I’m not much for conspiracy theories.

In my long-ago days in City Hall,   we often encountered folks–sometimes they were neighborhood activists, sometimes representatives of organizations aggrieved about some action–who were absolutely convinced that city officials had cleverly and surreptiously implemented a plan to screw them. What they didn’t understand was that we lacked the cunning and imagination needed to carry out the nefarious plots they attributed to us. As a former co-worker used to say,  incompetence explained so much more than conspiracy.

But just because most accusations of intentional conspiracies tend to come from paranoid folks doesn’t mean that  bad behavior is never intentional.  (As the old saying goes, even paranoids have enemies.)

Which brings me to an unsettling theory advanced by Robert Reich in a recent blog post.

Robert Reich, as most readers know,  was Secretary of Labor in the Clinton Administration. He now teaches at Berkeley. His politics tend to be considerably to the left of mine; that said, however, his is a credible and very respectable voice, and he is not given to conspiracy theories.

Reich writes about persistently high unemployment, and the unwillingness of Congressional Republicans to do anything about it. These are facts. Unemployment remains high, and the House GOP remains stubbornly opposed to even the most reasonable measures to address that problem. The question is, why? Reich dismisses the notion that Republican obstinacy is entirely due to hatred of President Obama (aka the black guy in the White House).

First, high unemployment keeps wages down. Workers who are worried about losing their jobs settle for whatever they can get — which is why hourly earnings keep dropping. The median wage is now 4 percent lower than it was at the start of the recovery. Low wages help boost corporate profits, thereby keeping the regressives’ corporate sponsors happy.

Second, high unemployment fuels the bull market on Wall Street. That’s because the Fed is committed to buying long-term bonds as long as unemployment remains high. This keeps bond yields low and pushes investors into equities — which helps boosts executive pay and Wall Street commissions, thereby keeping regressives’ financial sponsors happy.

Third, high unemployment keeps most Americans economically fearful and financially insecure. This sets them up to believe regressive lies — that their biggest worry should be that “big government” will tax away the little they have and give it to “undeserving” minorities; that they should support low taxes on corporations and wealthy “job creators;” and that new immigrants threaten their jobs.

I suppose this theory doesn’t really amount to a conspiracy, but it does suggest that the GOPs blocking maneuvers are prompted by actual reasons, no matter how much their behavior resembles a two-year-old’s tantrum.

If Reich is correct–and I’m still dubious–members of the House GOP are both smarter and much more despicable than I had previously imagined.

A Bigger Pie

I think it was Mark Twain who said “It isn’t what you don’t know that hurts you–it’s what you know for certain that just ain’t so.”

Political debate these days is awash with “facts” that “just ain’t so.” One of those “facts” is that immigrants take jobs from Americans, and that raising the number of foreign-born people we allow to enter the country legally each year would worsen unemployment. A recent study by the Fiscal Policy Institute tells a very different story.

The Institute looked at incorporation figures and determined that immigrants own 18% of all small businesses in the U.S. In other words, more than one in six small businesses is owned by an immigrant. Those businesses employ an estimated 4.7 million workers, and generate some $776 billion dollars in revenue.

That immigrants gravitate to ownership shouldn’t surprise us. You have to be a risk taker to leave the place of your birth and move to a foreign country. Anti-immigrant attitudes make it more difficult for educated and skilled immigrants to find management and professional positions with American-owned firms. So, disproportionately, immigrants start their own small businesses, and small businesses are far and away the largest generators of employment. Small businesses–not massive corporations–are the real “job creators.”

The notion that immigration slows job growth is rooted in a “zero sum” worldview, the belief that the economy is like a pie. In that view, there is a fixed amount of pie, and if you get a bigger slice, mine will be smaller–if an immigrant gets a job, that’s one job fewer for Americans.

The virtue of capitalism is that it encourages people to bake more pie. And that is precisely what immigrants are doing.

Somehow, I doubt that this evidence will make much difference to those who want to raise the gangplank and keep those “others” out. What we know that “just ain’t so” keeps getting in the way of acting in our own best interests.