MORE ON THE PLIGHT OF AMERICAN WORKERS

I have written on the plight of American workers before in what I view as one of my most important posts.*  In this contribution I point out as before: (1) the wages of the American worker must be below the cost of automation, and (2) the wages of the American worker must be below the costs of cheap foreign labor moderated by shipping costs, price of natural gas, etc.  But now also add that many low paying jobs have been or are disappearing.   So there is a three way push against low cost labor in America.

And something we are seeing now is the decrease in number of jobs related to the oil industry because of the oil glut worldwide.  It is not going to be a reduction of employees just in the oil industry (field workers, maintenance workers, etc.), but also a ripple effect of workers in related industries.  U.S. Steel, for example, has announced a large layoff of workers related to production of pipe for the oil industry and there are no doubt others.  These relatively high paying jobs are being replaced by lower paying service jobs in food and drinking and health care servers.  There are some jobs returning to the U.S. that overcome the above obstacles, but at an average wage of 23% less than when they were off-shored.**  Because of this, you can get a month like December with good job growth (preliminary 250,000) but a reduction of a nickel in the hourly wages.**

And it occurs to me that wage jobs that cannot be automated or off-shored are just disappearing, where possible, and to the degree possible handed off to the consumer.  Business phones are no longer answered by a person, but you have to "let your fingers do the walking" through an itemized number of steps until you can finally speak to a person, if lucky, when the itemized list doesn't satisfy.  At work, clerk typists but have all but disappeared and even secretaries serve more than one superior.  The typing (word processing and spreadsheets) is largely turned over to the worker.  Gas station attendants have disappeared except in certain places like Oregon where you are not allowed to pump the gas yourself.  Usually only one person now handles a gas station, and their job is more to handle sales from the convenience store part of the station because most people will pay at the pump by credit card.  Low cost buffets are flourishing, though you can still find low-cost "breakfast anytime" eating places where you are waited on by a person, heavily dependent on tips (they are even called tip workers). Supermarkets have now installed slef-checkout isles that often have lines.

So there is a double push against wage earners.  On the one hand their wages must remain below the cost of automation or the low cost labor of off-shoring moderated by the costs of shipping, natural gas, etc.  Then many low pay jobs are just disappearing where they cannot be automated or off-shored and their duties have been taken over by the consumer.

A bright spot in the recovery from the Great Recession of 2008-2009 has been recovery in construction workers which were the hardest hit in the recession.   As a nation, we missed a splendid opportunity to improve the infrastructure of the country at relatively low cost when there were many unemployed workers in the construction industry available.

There may be relatively short periods where wages of labor can rise to livable levels, such as in "bubble economies," but these periods should be of relatively short duration.

As I have said elsewhere, it looks like the Golden Age of American labor is over.*  I don't see where either political party in America has an answer to this, much as they might pretend they do.

*http://stopcontinentaldrift.blogspot.com/2014/05/plight-of-american-workers.html
** http://www.rpc.senate.gov/policy-papers/december-2014-unemployment-report;
http://blogs.wsj.com/economics/2015/01/09/was-2014-really-the-strongest-year-of-job-growth-since-1999/?mod=djemRTE_h