- The American Conservative - http://www.theamericanconservative.com -

Liquidating the Labor Force

Debtpocalypse [1]” looms. Depending on who wins out in Washington, we’re told [1], we will either free fall over the fiscal cliff or take a terrifying slide to the pit at the bottom. Grim as these scenarios might seem, there is something confected about the mise-en-scène, like an un-fun Playland. After all, there is no fiscal cliff [2], or at least there was none–until the two parties built it.

And yet the pit exists. It goes by the name of “austerity.” However, it didn’t just appear in time for the last election season or the lame-duck session of Congress to follow. It was dug more than a generation ago, and has been getting wider and deeper ever since. Millions of people have long made it their home. “Debtpocalypse” is merely the latest installment in a tragic, 40-year-old story of the dispossession of American working people.

Think of it as the archeology of decline, or a tale of two worlds. As a long generation of austerity politics hollowed out the heartland, the quants and traders and financial wizards of Wall Street gobbled up ever more of the nation’s resources. It was another Great Migration–instead of people, though, trillions of dollars were being sucked out of industrial America and turned into “financial instruments” and new, exotic forms of wealth. If blue-collar Americans were the particular victims here, then high finance is what consumed them. Now, it promises to consume the rest of us.

Scenes from the Museum

In the mid-1970s, Hugh Carey, then governor of New York, was already noting the hollowing out of his part of America. New York City, after all, was threatening to go bankrupt. Plenty of other cities and states across what was then known as the “Frost Belt” were in similar shape. Yankeedom, in Carey’s words, was turning into “a great national museum” where tourists could visit “the great railroad stations where the trains used to run.”

As it happened, the tourists weren’t interested. Abandoned railroad stations might be fetching in an eerie sort of way, but the rest of the museum was filled with artifacts of recent ruination that were too depressing to be entertaining. True, a century earlier, during the first Gilded Age, the upper crust used to amuse itself by taking guided tours of the urban demi-monde, thrilling to sites of exotic depravity or ethnic strangeness. They traipsed around “rag-pickers alley” on New York’s Lower East Side or the opium dens of Chinatown, or ghoulishly watched poor children salivate over toys in store window displays they could never hope to touch.

Times have changed. The preference now is to entirely remove the unsightly. Nonetheless, the national museum of industrial homicide has, city by city, decade by decade, grown more grotesque.

Camden, New Jersey, for example, had long been a robust, diversified small industrial city. By the early 1970s, however, its reform mayor Angelo Errichetti was describing it this way: “It looked like the Vietcong had bombed us to get even. The pride of Camden … was now a rat-infested skeleton of yesterday, a visible obscenity of urban decay. The years of neglect, slumlord exploitation, tenant abuse, government bungling, indecisive and short-sighted policy had transformed the city’s housing, business, and industrial stock into a ravaged, rat-infested cancer on a sick, old industrial city.”

That was 40 years ago and yet, today, news stories are still being written [3] about Camden’s never-ending decline into some bottomless abyss.  Consider that a measure of how long it takes to shut down a way of life.

Once upon a time, Youngstown, Ohio, was a typical smokestack city, part of the steel belt running through Pennsylvania and Ohio. As with Camden, things there started turning south in the 1970s. From 1977 to 1987, the city lost 50,000 jobs in steel and related industries. By the late 1980s, the years of Ronald Reagan’s presidency when it was “morning again in America [4],” it was midnight in Youngstown: foreclosures, an epidemic of business bankruptcies, and everywhere collapsing community institutions including churches, unions, families, and the municipal government itself.

Burglaries, robberies, and assaults doubled after the steel plants closed. In two years, child abuse rose by 21%, suicides by 70%. One-eighth of Mahoning County went on welfare. Streets were filled with dead storefronts and the detritus of abandoned homes: scrap metal and wood shingles, shattered glass, stripped-away home siding, canning jars, and rusted swing sets. Each week, 1,500 people visited the Salvation Army’s soup line.

The Wall Street Journal called Youngstown “a necropolis,” noting miles of “silent, empty steel mills” and a pervasive sense of fear and loss. Bruce Springsteen would soon memorialize that loss in “The Ghost of Tom Joad [5].”

If you were unfortunate enough to live in the small industrial city of Mansfield, Ohio, for the last 40 years, you would have witnessed in microcosm the dystopia of destruction unfolding in similar places everywhere. For a century, workshops there had made a kaleidoscope of goods: stoves, tires, steel, machinery, refrigerators, and cars. Then Mansfield’s rust belt started narrowing as one plant after another went shut down: Dominion Electric in 1971, Mansfield Tire and Rubber in 1978, Hoover Plastics in 1980, National Seating in 1985, Tappan Stoves in 1986, a Westinghouse plant and Ohio Brass in 1990, Wickes Lumber in 1997, Crane Plumbing in 2003, Neer Manufacturing in 2007, and Smurfit-Stone Container in 2009. In 2010, General Motors closed its largest, most modern U.S. stamping factory, and thanks to the Great Recession, Con-way Freight, Value City, and Card Camera also shut down.

“Good times” or bad, it didn’t matter. Mansfield shrank relentlessly, becoming the urban equivalent of skin and bones. Its poverty rate is now at 28% [6], its median income $11,000 below the national average of $41,994. What manufacturing remains is non-union and $10 an hour is considered a good wage.

Midway through this industrial autoda, a journalist watching the Campbell Works of Youngstown Sheet and Tube go dark, mused that “the dead steel mills stand as pathetic mausoleums to the decline of American industrial might that was once the envy of the world.” This dismal record is particularly impressive because it encompasses the “boom times” presided over by Presidents Reagan and Clinton.

The “Pit” Deepens

In 1988, in the iciest part of the Frost Belt, a Wall Street Journal reporter noted, “There are two Americas now, and they grow further apart each day.” He was referring to Eastport, Maine. Although the deepest port on the East Coast, it hosted few ships, abandoned sardine factories lined its shore, and its bars were filled with the under- and unemployed. The reporter pointed out that he had seen similar scenes from a collapsing rural economy “coast to coast, border to border”: shuttered saw mills, abandoned mines, closed schools, rutted roads, ghost airports.

Closing up, shutting down, going out of business: last one to leave please turn out the lights!

Such was the case in cities and towns around the country. Essential public services–garbage collection, policing, fire protection, schools, street maintenance, health-care–were atrophying. So were the people who lived in those places. High blood pressure, cardiac and digestive problems, and mortality rates were generally rising, as was doubt, self-blame, guilt, anxiety, and depression. The drying up of social supports, even among those who once had been friends and workmates, haunted the inhabitants of these places as much as the industrial skeletons around them.

[7]In the 1980s, when Jack Welch, soon to be known as“Neutron Jack” [8] for his ruthlessness, became CEO of General Electric, he set out to raise the company’s stock price by gutting the workforce. It only took him six years, but imagine what it was like in Schenectady, New York, which lost 22,000 jobs; Louisville, Kentucky, where 13,000 fewer people made appliances; Evendale, Ohio, where 12,000 no longer made lights and light fixtures; Pittsfield, Massachusetts, where 8,000 plastics makers lost their jobs; and Erie, Pennsylvania, where 6,000 locomotive workers got green slips.

Life as it had been lived in GE’s or other one-company towns ground to a halt. Two travelling observers, Dale Maharidge and Michael Williamson, making their way [9] through the wasteland of middle America in 1984 spoke of “medieval cities of rusting iron” and a largely invisible landscape filling up with an army of transients, moving from place to place at any hint of work. They were camped out under bridges, riding freight cars, living in makeshift tents in fetid swamps, often armed, trusting no one, selling their blood, eating out of dumpsters.

Nor was the calamity limited to the northern Rust Belt. The South and Southwest did not prove immune from this wasting disease either. Empty textile mills, often originally runaways from the North, dotted the Carolinas, Georgia, and elsewhere. Half the jobs lost due to plant closings or relocations occurred in the Sunbelt.

In 2008, in the sunbelt town of Colorado Springs, Colorado, one-third of the city’s street lights were extinguished, police helicopters were sold, watering and fertilizing in the parks was eliminated from the budget, and surrounding suburbs closed down the public bus system. During the recent Great Recession one-industry towns like Dalton [10], Georgia (“the carpet capital of the world”), or Blakely, Georgia (“the peanut capital of the world”), or Elkhart, Indiana [11] (“the RV capital of the world”) were closing libraries, firing police chiefs, and taking other desperate measures to survive.

And no one can forget Detroit. Once, it had been a world-class city, the country’s fourth largest, full of architectural gems. In the 1950s, Detroit had a population with the highest median income and highest rate of home ownership in urban America. Now, the “motor city” haunts the national imagination as a ghost town [12]. Home to two million a quarter-century ago, its decrepit hulk is now “home” to 900,000. Between 2000 and 2010 alone, the population hemorrhaged by 25%, nearly a quarter of a million people, almost as many as live in post-Katrina New Orleans. There and in other core industrial centers like Baltimore, “death zones” have emerged where whole neighborhoods verge on medical collapse.

One-third of Detroit, an area the size of San Francisco, is now little more than empty houses, empty factories, and fields gone feral. A whole industry of demolition, waste-disposal, and scrap-metal companies arose to tear down what once had been. With a jobless rate of 29%, some of its citizens are so poor they can’t pay for funerals, so bodies pile up at mortuaries. Plans are even afoot to let the grasslands and forests take over, or to give the city to private enterprise.

Even the public zoo has been privatized. With staff and animals reduced to the barest of minimums and living wages endangered by its new owner, an associate curator working with elephants and rhinos went in search of another job. He found it with the city–chasing down feral dogs whose population had skyrocketed as the cityscape returned to wilderness. History had, it seemed, abandoned dogs along with their human compatriots.

Looking Backward

But could this just be the familiar story of capitalism’s penchant for “creative destruction”? The usual tale of old ways disappearing, sometimes painfully, as part of the story of progress as new wonders appear in their place?

Imagine for a moment the time traveler from Looking Backward [13], Edward Bellamy’s best-selling utopian novel of 1888 waking up in present-day America. Instead of the prosperous land filled with technological wonders and egalitarian harmony Bellamy envisioned, his protagonist would find an unnervingly familiar world of decaying cities, people growing ever poorer and sicker, bridges and roads crumpling, sweatshops a commonplace, the largest prison population on the planet, workers afraid to stand up to their bosses, schools failing, debts growing more onerous, and inequalities starker than ever.

A recent grim statistic suggests just how Bellamy’s utopian hopes have given way to an increasingly dystopian reality. For the first time [14] in American history, the life expectancy of white people, men and women, has actually dropped. Life spans for the least educated, in particular, have fallen by about four years since 1990. The steepest decline: white women lacking a high school diploma. They, on average, lost five years of life, while white men lacking a diploma lost three years.

Unprecedented for the United States, these numbers come close to the catastrophic decline Russian men experienced in the desperate years following the collapse of the Soviet Union. Similarly, between 1985 and 2010, American women fell from 14th to 41st place in the United Nation’s ranking of international life expectancy. (Among developed countries, American women now rank last.) Whatever combination of factors produced this social statistic, it may be the rawest measure of a society in the throes of economic anorexia.

One other marker of this eerie story of a developed nation undergoing underdevelopment and a striking reproach to a cherished national faith: for the first time since the Great Depression, the social mobility of Americans is moving in reverse [15]. In every decade from the 1970s on, fewer people have been able to move up the income ladder than in the previous 10 years. Now Americans in their thirties earn 12% less on average than their parents’ generation at the same age. Danes, Norwegians, Finns, Canadians, Swedes, Germans, and the French now all enjoy higher rates of upward mobility than Americans. Remarkably, 42% of American men raised in the bottom one-fifth income cohort remain there for life, as compared to 25% in Denmark and 30% in notoriously class-stratified Great Britain.

Eating Our Own

Laments about “the vanishing middle class” have become commonplace, and little wonder. Except for those in the top 10% of the income pyramid, everyone is on the down escalator [16]. The United States now has the highest percentage [17] of low-wage workers–those who earn less than two-thirds of the median wage–of any developed nation. George Carlin once mordantly quipped, “It’s called the American Dream because you have to be asleep to believe it.” Now, that joke has become our waking reality.

During the “long nineteenth century,” wealth and poverty existed side by side. So they do again. In the first instance, when industrial capitalism was being born, it came of age by ingesting what was valuable embedded in pre-capitalist forms of life and labor, including land, animals, human muscle power, tools and talents, know-how, and the ways of organizing and distributing what got produced. Wealth accumulated in the new economy by extinguishing wealth in the older ones.

“Progress” was the result of this economic metabolism. Whatever its stark human and ecological costs, its achievements were also highly visible. America’s capacity to sustain a larger and larger population at rising levels of material well-being, education, and health was its global boast for a century and half.

Shocking statistics about life expectancy and social mobility suggest that those days are over. Wealth, great piles of it, is still being generated, and sometimes displayed so ostentatiously that no one could miss it. Technological marvels still amaze. Prosperity exists, though for an ever-shrinking cast of characters. But a new economic metabolism is visibly at work.

For the last 40 years, prosperity, wealth, and “progress” have rested, at least in part, on a grotesque process of auto-cannibalism–it has also been called “dis-accumulation” by David Harvey–of a society that is devouring its own.

Traditional forms of primitive accumulation still exist abroad. Hundreds of millions of former peasants, fisherman, craftspeople, scavengers, herdsmen, tradesmen, ranchers, and peddlers provide the labor power and cheap products that buoy the bottom lines of global manufacturing and retail corporations, as well as banks and agribusinesses. But here in “the homeland,” the very profitability and prosperity of privileged sectors of the economy, especially the bloated financial arena, continue to depend on slicing, dicing, and stripping away what was built up over generations.

Once again a new world has been born. This time, it depends on liquidating the assets of the old one or shipping them abroad to reward speculation in “fictitious capital.” Rates of U.S. investment in new plants, technology, and research and development began declining during the 1970s, a fall-off that only accelerated in the gilded 1980s. Manufacturing, which accounted for nearly 30% of the economy after the Second World War, had dropped [18] to just over 10% by 2011. Since the turn of the millennium alone, 3.5 million more manufacturing jobs have vanished and 42,000 manufacturing plants were shuttered.

Nor are we simply witnessing the passing away of relics of the nineteenth century. Today, only one [19] American company is among the top ten in the solar power industry and the U.S. accounts for a mere 5.6% of world production of photovoltaic cells. Only GE is among the top ten companies in wind energy. In 2007, a mere 8% of all new semi-conductor plants under construction globally were located in the U.S.  Of the 1.2 billion cell phones sold in 2009, none were made in the U.S. The share of semi-conductors, steel, cars, and machine tools made in America has declined precipitously just in the last decade. Much high-end engineering design and R&D work has been offshored. Now, there are more people dealing cards in casinos than running lathes, and almost three times as many security guards as machinists.

The FIRE Next Time

Meanwhile, for more than a quarter of a century the fastest growing part of the economy has been the finance, insurance, and real estate (FIRE) sector. Between 1980 and 2005, profits in the financial sector increased by 800% [20], more than three times the growth in non-financial sectors.

In those years, new creations of financial ingenuity, rare or never seen before, bred like rabbits. In the early 1990s, for example, there were a couple of hundred hedge funds; by 2007, 10,000 of them. A whole new species of mortgage broker roamed the land, supplanting old-style savings and loan or regional banks. Fifty thousand mortgage brokerages employed 400,000 brokers [21], more than the whole U.S. textile industry. A hedge fund manager put it bluntly [22], “The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around.”

For too long, these two phenomena–the eviscerating of industry and the supersizing of high finance–have been treated as if they had nothing much to do with each other, but were simply occurring coincidentally.

Here, instead, is the fable we’ve been offered: Sad as it might be for some workers, towns, cities, and regions, the end of industry is the unfortunate, yet necessary, prelude to a happier future pioneered by “financial engineers.” Equipped with the mathematical and technological know-how that can turn money into more money (while bypassing the messiness of producing anything), they are our new wizards of prosperity!

Unfortunately, this uplifting tale rests on a categorical misapprehension. The ascendancy of high finance didn’t just replace an industrial heartland in the process of being gutted; it initiated that gutting and then lived off it, particularly during its formative decades. The FIRE sector, that is, not only supplanted industry, but grew at its expense–and at the expense of the high wages it used to pay and the capital that used to flow into it.

Think back to the days of junk bonds, leveraged buy-outs, megamergers and acquisitions, and asset stripping in the 1980s and 1990s. (Think, in fact, of Bain Capital.) What was getting bought and stripped and closed up supported windfall profits in high-interest-paying junk bonds. The stupendous fees and commissions that went to those “engineering” such transactions were being picked from the carcass of a century and a half of American productive capacity. The hollowing out of the United States was well under way long before anyone dreamed up the “fiscal cliff.”

For some long time now, our political economy has been driven by investment banks, hedge funds, private equity firms, real estate developers, insurance goliaths, and a whole menagerie of ancillary enterprises that service them. But high times in FIRE land have depended on the downward mobility of working people and the poor, cut adrift from more secure industrial havens and increasingly from the lifelines of public support. They have been living instead in the “pit of austerity.” Soon many more of us will join them.

Steve Fraser is a historian, writer, and editor-at-large for New Labor Forum, and co-founder of the American Empire Project [23]He is, most recently, the author of Wall Street: America’s Dream Palace [24]He teaches at Columbia University. Follow TomDispatch on Twitter [25]. Copyright 2012 Steve Fraser

25 Comments (Open | Close)

25 Comments To "Liquidating the Labor Force"

#1 Comment By Fran Macadam On December 3, 2012 @ 1:13 pm

The financiers of America are eating up all of the rest of us.
They are the bane (“Bain”) of our society – if it can even be called a society, anymore.

#2 Comment By Roland Kayser On December 3, 2012 @ 3:05 pm

Just one more tax cut for the rich and we’ll be able to reverse all this.

#3 Comment By Adam On December 3, 2012 @ 4:15 pm

Why make something when you can simply take it? Why deal in simplicity when complexity is the key towards evermore rent? If Republicans ever want to get back in the game in regards to national politics, discussions on government’s role as protector, and I’m not just talking about Defense, need to occur. If they ever want to represent working America again, hard truths in regards to continued support of the “investor” class need to be aired. Just as the majority are not “job creators” in the sense that we mostly work for others, we also have less and less in common with this “investor class”. While we are not in this narrow definition “job creators”, the lack of disposable income certainly contributes to the lack of jobs being created. Until this balance is addressed, the new structural weakness in employment will continue its downward trend.

#4 Comment By Thomas Sm On December 3, 2012 @ 4:40 pm

Nationalise the Fed. Nationalise the biggest banks and loan money out for productive purposes.

Stop idolising the free market be it in its modern form, which is patently ridiculous, or in its mythologised Jeffersonian-Jacksonian form, which was actually a condemnation of financial capitalism, not its endorsement. Since financial capitalism not only exists, but is entirely dominant, it must be brought in line. That is what a conservative State would do.

#5 Comment By M_Young On December 3, 2012 @ 4:55 pm

Where it not for mass immigration and the Mexicanization of the Southwest and California, workers and new high school grads would be able to migrate from the Rust and Frost belts to greener and warmer pastures and get jobs in construction, the service industries, etc. Instead, native-born Americans are fleeing California in hundreds of thousands.

Any piece on economic distress of the American working class that fails to mention immigration is a gross distortion.

#6 Comment By M_Young On December 3, 2012 @ 4:55 pm

“Where it” –> were it

#7 Comment By Dakarian On December 4, 2012 @ 3:58 am

Well…this article is a good way to push someone more Left than any article I can find on the Liberal side.

The sad thing is that this isn’t new to me, at least anything after the 80s.. it’s the same information I’ve been gathering all put out into a neat essay with additional information to show that this is a 40 year old rather than 30 issue.

And the Liberal side of me screams and wails “THIS is the America you wanted us to be?! If not then what do you want to do about it? Remove welfare to complete the cycle? More miltiary? Our Union are gutted compared to what they once were, the only pieces left the rotten husks that are as corrupt as the companies they were created to fight. Welfare was cut. Taxes were cut. Free trade and freedom for companies were offered. And THIS is what we get?”

My Conservative side doesn’t have an answer. That’s why I’m here. Unlike that thing above, I don’t want blame anymore. I don’t care who did it or why or how. I just want to know how to fix it.. really fix it and how exactly will what’s proposed WILL fix it.

Because otherwise, I’ll want to start gutting everything that’s been done in the past 40 years, and something tells me I will be hitting a lot more Republican creations than Liberal ones if I stop at before 1970.

#8 Comment By Dakarian On December 4, 2012 @ 4:08 am

“Where it not for mass immigration and the Mexicanization of the Southwest and California, workers and new high school grads would be able to migrate from the Rust and Frost belts to greener and warmer pastures and get jobs in construction, the service industries, etc. Instead, native-born Americans are fleeing California in hundreds of thousands.

Any piece on economic distress of the American working class that fails to mention immigration is a gross distortion”

You mean the same construction industry that’s worked itself so silly during the housing boom that they have years worth of inventory? Even without immigration, that’s a dead end.

Service industries!? We have have been filled with Walmart and phone desk jobs for the past few decades. Those aren’t middle class jobs. Those are jobs you get while still being poor enough to receive government help. You think that they would replace the manufacturing sector?

Illegal immigration has some of those jobs because they are the only ones who accept the conditions needed to withstand the pay they give out. Shall we dump the immigrants out, stoop down to living similar to they did and call that the New American Dream?

Immigrants didn’t take middle class jobs. They didn’t destroy the industries the public relied upon to grow out of poverty. Immigration issues are important, but let’s stop using them as the scapegoat for the dying middle class, shall we?

#9 Comment By libertarian jerry On December 4, 2012 @ 4:26 am

When you have a nation where 2/3 of the population either lives off of or is employed by government on one level or another and the only answer is more government, something is wrong. The situation in America would not exist if the State was not involved heavily in the Economy. Only the State can enjoin monopolies and crony capitalism. American does not have nor is anywhere near a free market. With that said,in my experience there are plenty of well paying middle class jobs throughout the country for trained applicants. Many of these jobs go begging. At the same time,between taxes and regulations industries are being forced to pull back and even shut down. In the end, it seems that the above article is almost a word by word description of what happens in the novel Atlas Shrugged by Ayn Rand. Well, maybe there is a John Galt and maybe he is having his revenge.

#10 Comment By Franco On December 4, 2012 @ 4:55 am

This a thoughtful article. One of the good and bad things about capitalism is there are more than one kind. What we have in America is a kind of internal colonialism where we give people rights but often not responsibility or resources.
Even an evil anti semite like Henry Ford the original paid his workers a living wage because he enough enlightened self interest to see the need for middle class. We have class warfare in reverse; class canibalism.

#11 Comment By John On December 4, 2012 @ 5:12 am

Excellent description and analysis. It is right on for those of us who grew up in communities where people walked to work at the local plant that paid a good living wage, and where executives living in the big houses and driving the latest vehicles still had their children in the Boy Scouts, the Littled League, were subject to the draft and served honorably, and who themselves were on the local school board. These were communities where residents prospered together. They are gone now; never to return. The sad part is the people like Romney and Ryan can get even one vote, let alone even make a half credible run for the presidency. But that is the other skill of the upper one percent–convincing the Middle Class that Social Security, Medicare, and food stamps are the problem, not financialization. But like the old South where whites ran bare footed and hungry while refusing to vote for programs that would help them because those programs would also help poor blacks, the Red States continue to vote Republican because of the successful divide and conquer strategy of the elites.

#12 Comment By Barry On December 4, 2012 @ 9:55 am

libertarian jerry: “The situation in America would not exist if the State was not involved heavily in the Economy. Only the State can enjoin monopolies and crony capitalism. American does not have nor is anywhere near a free market.”

Please note that mass imiseration was quite common before the New Deal, and only started up again as the New Deal was dismantled.

” With that said,in my experience there are plenty of well paying middle class jobs throughout the country for trained applicants. Many of these jobs go begging.”

No, there are not. Time and time again, whenever these alleged jobs are discussed, it turns out that (a) they actually pay sh*t or (b) they require all applicants to have extensive and specific training *and* experience, to the point where almost nobody can ever qualify. The rare exceptions are just that – rare, and not something millions of workers can get.

#13 Comment By M_Young On December 4, 2012 @ 10:07 am

“You mean the same construction industry that’s worked itself so silly during the housing boom that they have years worth of inventory? Even without immigration, that’s a dead end.”

Construction has traditionally been a decent job for guys who weren’t ‘book smart’ but who were good with their hands. Even until the early 1990s you could see ‘live better, work union’ bumperstickers on the work trucks headed to construction sites in Southern California, most driven by ‘Anglos’. Wages were decent. Construction was at a reasonable pace. And fact is the industry will recover — but those jobs won’t be going to actual Americans, Mexican ethnic networking will keep us out.

Even the maintenance type jobs — termite damage repair, painting, plumbing — have been swamped by immigrants. Plumbers and painting contractors still make pretty good money in the Southwest, at least compared to the alternatives — it would be nice if those jobs were filled by Americans, but all too often they aren’t, and not because they are jobs ‘Americans won’t do’.

And gardening and landscaping can be pretty lucrative — a least judging by the trucks some of the lawn guys drive. The going rate is $12 for weekly lawn service, which (judging from my typical case, I mow my own) is about 20 minutes worth of work. Even allowing a drive time between customers, it seems likely $20-25 is easily reachable. Likewise, being a municipal groundskeepers could, potentially, be a decent job, if the positions weren’t all ‘privatized’ out to illegal-immigrant hiring contractors. Here Republicans and Democrats are equally to blame, Republicans want to lower government spending, so they ‘outsource’, and then complain about illegals, Democrats want a ‘living wage’ and union employees, but then undermine that by encouraging illegal and mass legal immigration.

Even in manufacturing, there is a huge immigrant presence here in California. And even middle class jobs, like writing code, have been H1-B’ed.

This is not ‘scapegoating’. It is merely pointing out that our immigration policy, and it has been acknowledged since the beginning that the US has the right to determine who gets to immigrate and how many, is hurting the working class. It has actually reversed the traditional flow of Americans into California. Just the other day I was talking with two ‘late boomers’ who came to California in the early 1980s, one said “back then, if you wanted a job, you came to California, now you go to Fargo”. Not a lot of immigrants in Fargo — yet.

#14 Comment By Dakarian On December 4, 2012 @ 10:58 am

@Libertarian

“With that said,in my experience there are plenty of well paying middle class jobs throughout the country for trained applicants. Many of these jobs go begging. ”

I read up on those.. they tend to fall into three categories

1. The wrong location compared to workforce needs. Note that the housing crash created a situation where americans are unable to move to find jobs like they did before. Thus you’ll see companies in need of workers in a different location from workers who need a company, and neither can find each other.

2. Education. Some of the high demand fields require particularly strong skill sets, mostly in math and science. Our college system is among the best in the world. Our K-12 system, which has been experiencing cuts and unfunded proposals for a few decades now, is one of the worst. Thus, we have higher education capable of training individuals for those new jobs, but no one with the basic skills to be able to handle the training. Note that it’s our K-12 education that was setup to be locally run rather than federally run until recently and never was capable of handling these new demands in the first place. As far as ‘recent federal running’ NCLB is about as good an example of how a good government handles education as our ER system a good example of capitalism.

3. Pay not matching requirements. This isn’t in the majority of areas, but tends to show up in fields that used automation to replace the regular workforce. Said automation tends to require new workers who not only know the original trade but also how to operate and maintain a high tech computer and robotic system to do it. Then said company wants that double set of skills for $10/hr. Then they wonder why they can’t find good workers.

(yes, this is a thing. No, they aren’t considering raising pay)

That’s not considering the concept that when many say “There’s good jobs not being taken” they speak like the person I talked about above: referring to low wage work that offers little growth and no job security.

As for Atlas Shrugged, if there is a JG, it’s China. I would say it’s Ironic but I’m pretty sure I’d be using it wrong, so I’ll say…interesting.

#15 Comment By brians On December 4, 2012 @ 11:08 am

“the Red States continue to vote Republican because of the successful divide and conquer strategy of the elites.”

Couldn’t possibly be that democrats are overtly hostile to historical Christian orthodoxy, and the rights of Christians to live according to their faith. I’d love nothing more than to vote for a socially conservative Democrat, but Democrats make it impossible for a Christian to vote for them in good conscience. Looks like 3rd party limbo for the forseeable future.

#16 Comment By Adam On December 4, 2012 @ 12:11 pm

“The situation in America would not exist if the State was not involved heavily in the Economy. Only the State can enjoin monopolies and crony capitalism. American does not have nor is anywhere near a free market.”

This is a valid point, although, I don’t believe in the ideal of a true Free Market, simply because if there is any sort of governance at all, monetary influence will distort it in favor of the monied. That said, governance can be used to tip the scales the other way when the balance has gone too far in the interest of either Capital or Labor. This should be part of the agreement to being governed, otherwise, true self interest would suggest you’re better off taking what you can, and to hell with everyone else.

I believe we are at a point where we need to realign government in the interests of Labor. The pendulum has swung too far the other way, for too long. Whether it is in the form of rent seeking, financialization, immigration, protectionism, monopolies, regulatory moat building, taxation, education, etc, there are vast ways to strip mine the general population for the benefit up the upper percentile. I’m not looking for some pipe dream called fairness, but there’s got to be an acknowledgement of the favors bestowed on a small percentage, at the expense of society as a whole.

#17 Comment By Tom G. On December 4, 2012 @ 1:16 pm

Born in 1968 in Western New York. My whole life has been spent watching this slow decay.

[26]

There are no simple answers.

#18 Comment By M_Young On December 4, 2012 @ 1:28 pm

“Then said company wants that double set of skills for $10/hr. Then they wonder why they can’t find good workers.

(yes, this is a thing. No, they aren’t considering raising pay)”

Why should they when they can organize a lobby and pressure Congress to grant more H1-Bs for [coders, engineers, nurses, teachers, lawyers]

(Forgot, lawyers make the rules.)

#19 Comment By Sean Scallon On December 4, 2012 @ 3:22 pm

“If you were unfortunate enough to live in the small industrial city of Mansfield, Ohio, for the last 40 years, you would have witnessed in microcosm the dystopia of destruction unfolding in similar places everywhere. For a century, workshops there had made a kaleidoscope of goods: stoves, tires, steel, machinery, refrigerators, and cars. Then Mansfield’s rust belt started narrowing as one plant after another went shut down: Dominion Electric in 1971, Mansfield Tire and Rubber in 1978, Hoover Plastics in 1980, National Seating in 1985, Tappan Stoves in 1986, a Westinghouse plant and Ohio Brass in 1990, Wickes Lumber in 1997, Crane Plumbing in 2003, Neer Manufacturing in 2007, and Smurfit-Stone Container in 2009. In 2010, General Motors closed its largest, most modern U.S. stamping factory, and thanks to the Great Recession, Con-way Freight, Value City, and Card Camera also shut down.Good times or bad, it didn’t matter. Mansfield shrank relentlessly, becoming the urban equivalent of skin and bones. Its poverty rate is now at 28%, its median income $11,000 below the national average of $41,994. What manufacturing remains is non-union and $10 an hour is considered a good wage….

“….Think back to the days of junk bonds, leveraged buy-outs, megamergers and acquisitions, and asset stripping in the 1980s and 1990s. (Think, in fact, of Bain Capital.) What was getting bought and stripped and closed up supported windfall profits in high-interest-paying junk bonds. The stupendous fees and commissions that went to those “engineering” such transactions were being picked from the carcass of a century and a half of American productive capacity. The hollowing out of the United States was well under way long before anyone dreamed up the “fiscal cliff.”

If anyone is still wondering, here’s why Mitt Romney lost Ohio and the election.

#20 Comment By cka2nd On December 4, 2012 @ 5:22 pm

And now the exact same arguments that were used against the steelworkers and meatpackers in the 1980’s are being used against civil servants, not that public employees were completely exempt from the downward pressures of the last few decades, as many of us have lived through successive periods of layoffs, wage freezes, hiring freezes and retirement incentives.

Libertarian Jerry’s response is typical for libertarians, abstract and lacking in concrete evidence (at least he spared us the condescending microeconomic example that his co-thinkers usually spin in order to explain how the macroeconomy is supposed to work). Too bad Mr. Fraser didn’t include a paragraph or two about all of the tax breaks, regulatory “relief” and union givebacks that many of these companies got over the years.

I would just offer a warning and an alternative to M_Young’s call for responding to immigration with law enforcement and further restrictions:

The warning is the War on Drugs. Just like the Drug War has driven the creation of a whole alternative economy AND cost us an arm and a leg, the attempt to solve the “liquidation of the labor force” (still not sure I really like that phrase) by using law enforcement to lock up and deport illegal immigrants has been a costly failure.

The alternative: Working Class Solidarity, using means both legal (repealing NAFTA and other trade deals, tax breaks for off-shoring and Taft-Hartley) and not (secondary boycotts, sit-down strikes, occupations and, in most cases, public-sector strikes). The ruling class must be brought to heel.

Oh, and Adam, the Democrats are as beholden to the ruling class as the GOP. They may rely on other sectors (Hollywood and High Tech) of the Big Bourgeoisie than the Republicans, but they are more than happy to compete for the largess of the Wall Street parasites, too.

#21 Comment By cdugga On December 4, 2012 @ 7:35 pm

Here is the fable, where lies the moral? The market is not free, not free enough, or the unregulated free market created the movement of money out of American companies creating product into world markets where creating companies that create things rushes to the lowest common denominator of labor costs and regulatory costs. Creative destruction is a mantra for the past, where resources appeared infinite. We have to be so much smarter now. Resources are not infinite, and most people are not genius entrepreneurs or vested wealth. Allowing financial markets to create tons of derivatives far above any actual tangible value, even to the point of allowing even more of other derivatives to hedge those pseudo values by orders of magnitude, was an inexcusable foray into the unregulated free market’s darkside. Creative destruction needs to be scrapped for creative preservation of resources with creative innovation and investments in the newer frontiers of new energy and manufacturing technology, not in representative paper bs. The moral to the story has to be a form of protectionism for our majority, that invests and encourages the transcendence to new ways of powering our creative energy rather than a global free for all race to the bottom of cheap labor, environmental destruction and quid pro quo manufactured real estate bubbles. We know that. What is stopping progress? Politics? Whose? Conserve what?; the old way of doing business putting more wealth into the fewest number of pockets and saying they will now tinkle down more to the majority. Or should we be redistributing the wealth from big oil and the military industrial complex through increased taxes and expand the collusion between massive vested interests and the government sponsored by them. But we’d need another war to justify the costs of multi-million dollar machines shooting 100 thousand dollar missiles at bad guys with AK47s, and frankly, not enough of our unclean masses are dying in those wars anymore, and instead many of our finest and most patriotic are the ones sacrificed in those pseudo calls for freedom and liberty. Civil war would do it, and the admittedly lame secessionist politics has already started, but it could be bumped up by certain people even though they were unsuccessful at the national level, they still hold the power of the angry working class white male locally. Right? The right again. Yeah buddy, don’t cave Boner, we needs lots more creative destruction.

#22 Comment By Mark in LA On December 4, 2012 @ 8:49 pm

@Dakarian

You must not know much about the H-1B controversies when you post this:

2. Education. Some of the high demand fields require particularly strong skill sets, mostly in math and science. Our college system is among the best in the world. Our K-12 system, which has been experiencing cuts and unfunded proposals for a few decades now, is one of the worst. Thus, we have higher education capable of training individuals for those new jobs, but no one with the basic skills to be able to handle the training. Note that it’s our K-12 education that was setup to be locally run rather than federally run until recently and never was capable of handling these new demands in the first place. As far as ‘recent federal running’ NCLB is about as good an example of how a good government handles education as our ER system a good example of capitalism.

Do some real research. Companies follow procedures to actively employ foreigners before any American in spite of the law. These people are not being hired because Americans are too dumb to do the job. They post requirements that only somebody like Gauss or Einstein could have for a simple programming job then hire somebody from Pakistan they claim is highly talented. Nobody from the government ever checks up on this.

@Libertarian

Nobody stopped Rockefeller from practically controlling the entire oil market. A completely free market means it is free for people to form cartels as they would love to do. It allows market corners and monopolies. I know, “this can’t happen in a real free market”. Why because somebody wrote a book and said so? Yes, nobody can corner the hand made shoe market where it only costs a few dollars to enter. However, when it costs billions to build a semiconductor fab, there are a lot of barriers to entrance making monopolies a very real possibility.

When Japanese companies wanted to enter the semiconductor market they needed MITI to backstop their losses and force their way into the market. The result of that was massive losses for US semiconductor companies to the point that Japan almost owned the memory market and almost drove Intel out of business before the microprocessor became the main moneymaker.

@cka2nd

Comparing the war on drugs to illegal immigration is ridiculous. The way to get rid of illegals is to go after the businesses. Fine them to the point of bankruptcy and they will fire the illegals themselves. That can be a function of ICE.

For gardeners, every police department of significant size has a code enforcement division. Make gardeners register with the police. If they don’t and the code people are on patrol and see them they can inquire about their status. If illegal, they get deported. The idea that it can’t be done is nonsense. They are here illegally, we don’t have to give them any better treatment than Mexico would give us for being there illegally.

#23 Comment By Mark Jamison On December 5, 2012 @ 9:42 am

@Jerry
The idea that there is some natural phenomenon known as “the market” that exists apart from the man made construct known as “the state” is a fictional utopian idea with no basis in fact or reality.
Markets are social constructs that exist and function because of the presence of a state. Markets don’t exist without the rule of law, guarantees of private property, the presence of enforceable contracts and numerous other elements which are supplied by that other social construct, the state. How the bounds of the market are defined, how the elements that make markets possible are applied determines whether markets work well, whether they are broadly or narrowly effective, and to a large extent how they create and distribute wealth.
Your comment is foundationally nonsensical as is the fiction of Rand.
Today’s arguments about big government versus small government are completely misdirectional. Both sides of the political spectrum want big government, it’s more a matter of who that big government favors. Republicans like strong patent protections (heavy regulation) while also favoring light industrial and financial regulation thereby putting the weight and the force of the government behind monopolies.
There is no mythical land of freedom from everything. There is no time in human history when man roamed the earth as independent individuals free of all restraint. Man has always sought out or created social constructs to define relationships, he is a social animal. Modern markets and the modern state are a reflection of that, nothing more or less.

#24 Comment By Christian Ohnimus On December 6, 2012 @ 1:22 pm

“Equipped with the mathematical and technological know-how that can turn money into more money (while bypassing the messiness of producing anything), they are our new wizards of prosperity!”

And this, in a sentence, sums up the Federal Reserve. To put an end to this “auto-cannibalism” requires that we terminate our central banking system that manipulates our money, promising to give us more and more money without having to go through the hassle of actually producing anything, and enables the FIRE industry to do the same.

Money equals wealth is the central fallacy of the Federal Reserve system and thus has been the fallacy of our centrally planned economy (at least when it comes to monetary policy) since 1913, almost one hundred years, and has persisted to a lesser degree since the early 1800s.

Manipulation of our money supply based on the whims of a few individuals has not given us a more stable, prosperous economy, it cannot. Contrary to generating more wealth such manipulation serves only to promote the misallocation of resources, causing and increasingly aggravating the cyclic boom and bust cycle and thereby actually making us all poorer.

The solution is to end the Fed and decentralize banking power back to the market, which is to say free individuals and families working in their own self-interests. By doing so we can expect a stabilized economy marked by the efficient allocation of scarce resources, absent of massive, cyclic errors perpetuated by manipulation from a central source.

Problems would still persist in our economy, of course, but ending the Federal Reserve is the single best step that can be taken in order to ensure a healthier economy in the future.

#25 Comment By Andrew On December 14, 2012 @ 1:26 am

Blah. So what. It’s just what post WW2 hegemony did to the manufacturing industry in the UK. With capitalism comes only loyalty to profit. Not a flag or an ideal of the nation. You feed the livestock just enough to stop them starving or biting you and when the soil turns to dust and seam runs dry you move on.

Locust economics. Consider a yeast culture in a petridish of agar, sugar and water and welcome to the finite entropy of planet earth. Which is why some are desperately trying to build an ark to lift off from our collective microbial doom.