January 15, 2018

January 15, 2018

The New York Times recently reported that more and more employers are considering hiring people with criminal records, as unemployment falls and labor markets tighten.

As Keynes and the Keynesians have long argued, all the compensatory programs in the world are no substitute for full employment. We can support “ban the box” and other efforts to prevent discrimination against formerly incarcerated people who’ve paid their debt to society, but they just don’t work well when unemployment is high and employers have their choice of applicants.

But there is one big flaw in the happy story of low unemployment. It is doing very little to change the deeper patterns of lousy jobs and career paths.

Tight job markets have begun to raise wages modestly. Walmart recently announced with great fanfare that it is increasing its base wage to $11 an hour. That sounds swell, but it adds up to just $22,000 a year. Care to try living on that?

At the very least, we need a $15 minimum wage and tight regulation against the needless or fraudulent use of gig and contract work.

 Once upon a time, 4.1 percent unemployment—the current rate—equaled significant worker bargaining power. But that was in the context of stable payroll employment, career ladders, powerful unions, and a strong industrial base.

Today, the norm is increasingly contingent work, which deprives workers of the bargaining power that would ordinarily flow from tight job markets. Add that to the high cost of housing, and you can understand why the deep economic distress, that produced Bernie Sanders on the Democratic side and Donald Trump on the Republican side, is still there.

On Martin Luther King Day, let us never forget that Dr. King was assassinated while he was in Memphis, in solidarity with striking sanitation workers. He understood better than anyone that justice and jobs went together.

New circumstances demand new forms of struggle. A low unemployment rate is essential, but it isn’t what it used to be.

Happy MLK Day.