Wednesday, July 21, 2004

USATODAY.com - Bush: Re-election will ensure U.S. safety

Safety from what?

Even counting 9/11 Americans are statistically less likely to be hit in a terrorist attack than they are to be struck by lightening. No one is buying lightening rods or obsessing about thunder storms.

Walmart is the country's largest employer, with over a million workers getting on the average a little over $8 an hour and no benefits. Americans have a much better chance of working at Walmart than of being bombed, and an even better chance of not working at all. One in five surveyed say that there is a good chance that some member of their household will be unemployed within the year.

But Americans aren't worried: they load up on consumer debt and take second mortgages on their homes--the only retirement plan most have--to pay off their credit cards. Americans are surely the least risk-averse people on earth: they can't count on either children to support them in old age or on state sponsored social safety nets. But they tremble at the remote possibility of crime and terrorism, and fall for candidates who promise more cops, more jails and more military while cutting away the last scraps of social safety nets left over from the New Deal and the Great Society.

Let's get real Democrats and run campaign ads that address the issues:

Show a TV ad--the Wheel of Fortune. Show the prizes--from the shiny, new SUV to the complete Ginzu knife set, valued at $29.95. Now spin the wheel. Here's your prize, a room in a residence hotel where you can spend your Golden Years living on cat food. Or Seven-Eleven. Buy your lottery ticket at the counter and scratch off the silver stuff to see your prize. You have won...UNEMPLOYMENT! Relax and enjoy it--you have x weeks of pin money benefits and then you're on your own. Don't get sick now because your benefits went with your job.

37 comments:

Anonymous said...

Here's a good article about this topic, with some proposals for a fix:

Perhaps the most promising idea for creating such a system is a simple proposal I call "universal insurance"--a kind of umbrella insurance policy protecting families against catastrophic drops in income or budget-wrecking expenses. Premiums would be a small share of total income and payouts would be based on the decline of disposable income from its previous base, with the share of income replaced higher for lower-income families.

H. E. said...

Thanks--good article. I'm all for universal insurance as far as it goes. The problem is that the Wheel of Fortune gets spun much earlier in the game--when the veil of ignorance is lifted and people discover how smart they are, what they look like, whether they're male or female, black or white, etc.

Unfortunately we aren't voting from the Original Position: most voters don't worry about counterfactuals, the really bad lots that they could have drawn, or believe that state intervention can change the consequences of the lots they did draw. So they will certainly buy into state-sponsored insurance schemes to see to it that middle-class people don't fall into poverty but they won't buy programs to give poor people a real opportunity to achieve middle-class status. They're disturbed at the prospect of white males doing boring, dead-end minimum wage jobs in the service sector because of the loss of good blue collar jobs in manufacturing but aren't in the least worried about women doing boring, deadend minimum wage jobs.

The only spins of the wheel of fortune that matter for them are the ones that occur after the veil is lifted. Is this rational? Dumb luck is dumb luck whenever it occurs. Being born female costs more than catastrophic illness, and being born into the urban underclass costs even more than that.

BTW is there any good empirical evidence to suggest that insecurity encourages risk-taking, in particular, the kind of risk taking that's good for the economy? There's an old, old essay by John Kenneth Galbraith, something like "Why the Poor are Like That" arguing that the poor adopt conservative strategies that lock them into poverty because they can't afford to assume risk.

Anonymous said...

I really know next to nothing about economics. But isn't the argument that free and open markets allow the Type A personalities in business to function freely, and to build enterprises as they choose and wish? The theory is trickle-down, as far as I can tell; what's good for General Motors is good for America, etc. (I don't think General Motors exists anymore, though, does it? So that didn't seem to work out too well.) But now, there's the theory (I think mentioned in the article) of "creative destruction"; this is particularly related to technology: that industries destroy their predecessors by the use of newly-discovered technology, and they in turn will be destroyed by whatever newer technologies come along. Each time this happens, other new industries (supposedly) spring up in support.

The insecurity for everybody else is a result of this, isn't it? That's the way I've always understood it, at any rate. It's clear that capitalism is very good at producing new things, but it also seems that there might be a point of diminishing returns. I mean, if a "less intense" mouthwash is really the best we can do (it's not, of course, but you know what I mean), maybe it's time to recognize the limitations.

I think what happens, though, is that people do try to better themselves - they go back to school, get more training, work harder. Aren't the Community Colleges
booming these days? I think it's true that there's a higher percentage of "adults" (over 25, maybe?) in college classrooms these days than ever before in history.

Or, people try to come up with new ideas. Some start businesses of their own, which does involve risk, but can be very rewarding. I'm not sure these things are driven, necessarily, by "insecurity" per se; it's more about wanting to be your own boss.

H. E. said...

Does it work--empirically? I know this is the theory--but there's that demon of market failure. No frictionless planes here on earth.

Most small businesses fail within the first year. We don't start with the same sack of bargaining chips and no one on Main Street can compete with Walmart.

As for Community Colleges, how is someone who cashiers at Walmart and spends the rest of their time working at a second job or taking care of kids going to take advantage of these opportunities to better themselves? Even if they do manage, what do they get? A career as a medical receptionist or car-body repair worker. This is all very well, but unless you're a genius or a super-person, you just aren't going to get qualifications in a serious technical or professional occupation unless you have the leisure to go to school without doing full-time work at the same time. And as things stand, you can't do this unless either your parents or a cooperative spouse put you through.

Anonymous said...

But you need auto mechanics and receptionists. Those are good jobs, in fact; some of the techies I know are thinking about going to plumbers' or electricians' schools. Those jobs are safe, pretty much forever, but all technology jobs eventually wipe themselves out. That's the actual goal, in fact.

Did you see this article about Costco vs. Walmart (i.e., Blue vs. Red)? Again, I'm a total idiot when it comes to economics, but I don't object to Walmart, either - those seem to me to be better jobs than a lot of the old manufacturing ones were - as long as it unionizes. Wouldn't that fix most of the problems? Wouldn't it raise wages and benefits?

I do know, BTW, and believe it or not, that travel and tourism is soon going to be the largest industry on earth. I wonder, actually, as goods get cheaper and cheaper because of automation, if the basics won't eventually be virtually free for everyone, and all industries will be of the "charm" variety, like tourism.

H. E. said...

But you need auto mechanics and receptionists. Those are good jobs,

I wouldn't mind being a mechanic--though I would mind being a receptionist. My point though is that for all we imagine ourselves a classless society with endless opportunity it's extremely difficult to jump off your class track. The opportunities community colleges provide are limited.

I don't object to Walmart, either - those seem to me to be better jobs than a lot of the old manufacturing ones were - as long as it unionizes.Seems unlikely with a 44% per year turnover rate (in the article you linked)

Wouldn't that fix most of the problems? Wouldn't it raise wages and benefits?Unions traditionally didn't fix discrimination against women--in fact 100 years ago they promoted "protective legislation" and the "family wage" for men. Many weren't so hot about protecting foreign born and minority group members either. The strategy is the same: boost wages by restricting the labor supply. Moreover I think also about 50 years ago most unions in the US made a tactical decision to trade off shorter working hours and better working conditions for higher wages and benefits. We don't even figure in the character of the work people do in determining whether problems are fixed.

all industries will be of the "charm" variety, like tourism.You're probably right: waiter/waitress is one of the fastest growing occupations--and can't be outsourced. But depressing! For many people these jobs are perfectly awful--you don't make anything, fix anything or organize anything and there's nothing to show at the end of the day.

Anonymous said...

I tried to find some studies of the type you were looking for, but haven't, yet. I did find one article, 5 years old, on small business failure rates, with some references to other sources.

And here's an interesting abstract on the same topic.

H. E. said...

Thanks! It's not only hard to know what counts as failure--it's hard to know what counts as a business, particularly now that half the population seems to be set up on eBay. It's the high tech version of a swop meet--all these people virtually squatting on the ground with stacks of old clothes, used books, rusting tools and crocheted afghans.

Anonymous said...

The Ebay phenomenon is really amazing. I'm always really shocked to realize that Ebay has been the big winner from the dot-com craze. But somehow also cheered up, too - I really like it that people are out there selling their old junk online. It's this really interesting mix of the ancient and the brand-new. Human nature apparently really doesn't change much.

Hey, what about this for the future? Things will keep getting cheaper and cheaper because of technology, as they seem to be doing daily, so that eventually almost nobody will work in manufacturing at all. BUT, since the basics - food, clothing, etc. - will be very cheap, individuals will again become, sort of, skilled artisans and tradespeople. They can make specialty items by hand, for instance: if the jeans you get at WalMart cost five bucks apiece, an individual can start making special "hand-crafted" jeans for sale at higher prices.

Same with everything else - home furnishings, etc. It will be almost like the old days, except that individuals will make luxury, instead of basic, goods - but luxury that everyone will be able to buy. Robots will mine, farm, and create the basics. Old crafts and trades will become valuable again, and everybody will be able to afford these specialty items. Everybody can have all the basics, PLUS a few really nice items.

This is my new theory, anyway. Because I don't think anybody can stop WalMart, so I had to come with something. So you'll have the waitresses and waiters, too, but also this. What do you think?

H. E. said...

But where are folks going to get the money to buy that stuff however cheap it is--or the time to make those artsy craftsy luxury goods to sell on eBay? It's nice that people won't be laboring in those Satanic mills any more, but they will be spending their time working at Walmart and flipping burgers--at minimum wage to keep the stuff cheap. Or else unemployed.

As far as hand-crafted luxury goods, who will have the money to buy them? Making them is time-consuming and unless they're very expensive, the wage rate for producers is even lower than minimum wage. Crocheted lace doilies sell for a dollar or two at Michaels. I crochet doilies--if I sold them I'd be getting less than $1 an hour for my efforts. So who will have the money to buy this stuff? People who make $8/hour at Walmart and spend their evenings crocheting doilies at $1/hour?

If you'd like to see how your system works, check out any third world country--like Kenya where I stayed a couple of years ago. Consumer goods are cheap (though not for locals who are dirt poor) and there's plenty of eBay style private enterprise on the ground including crafts. One of the most popular is the art of bashing old hubcaps into cooking pots.

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