Economists in this country are faced with a quandary: how can the economy be recovering (which it is) without generating new jobs (which it is not, in any meaningful way)?
What few acknowledge is that this point has been 30 years in the making. The war on jobs started under Ronald Reagan. The call to arms -- "We must increase productivity!" Under the mantra of realizing the full value of assets, companies were bought, broken down into their constituent parts and sold. The ability to provide the same level of goods and services with fewer people was lauded.
And so launched the now familiar story of the 50 year old middle manager who was downsized and never recovered his or her financial security. The first of those people are now collecting social security and consuming less. When consumers consume less, the economy suffers.
Now, it wasn't so bad when the middle class was consuming beyond its means by tapping home equity and easy credit. But it's a new day now. So not only are the displaced middle managers of the 1980s consuming less now, but all consumers (displaced and otherwise) are consuming less now.
Is it possible, then, that a side effect of the 30 year march towards greater productivity (doing more with fewer people and fewer resources) has a side effect -- lower consumer consumption?
If so, then, there may be an argument to made for the value of employment to the economy on a par with productivity. Maybe cutting all of those jobs over the past 30 years resulted in short term gain at the expense of the long-term health of the economy.
It is against this backdrop that a privatization debate is playing out in New Jersey. Apparently, Governor Christie's privatization commission believes the State can save $210 million, about 1% of its budget, by privatizing state workers (I note that said report is deeply flawed, as discussed earlier on this blog). Allowing a toll taker who earns $65,000 a year to be replaced by a part-time employee who makes minimum wage and gets no benefits. A new coalition, the Coalition on Privatization, says that outsourcing functions currently performed by government will endanger the environment and public health, result in higher fees and a decline in the level of service provided to the public.
But the coalition missed the point. The Governor is seeking to create short-term gain for his supporters at the expense of the long term ability of the public to consume goods and services here in New Jersey. But wait, the Governor will explain, the short-term gain will allow small business to create more jobs, more efficient and productive jobs which are better for the economy.
To which I reply, it's been 30 years since the war on employment began, Governor, where are the jobs? Where are the jobs the Bush tax cuts were supposed to generate? Show me the jobs, Mr. Governor, and you can replace my toll taker with Robbie the Robot. But until then, stop adding to unemployment and stop undermining consumption in this state.
Until Republicans begin to understand that short-term gain that adds to unemployment is hurting the economy by squeezing out middle class consumption, our economy will continue to limp along. All of us -- rich, poor and the three people left in between -- are in the same sinking economic boat now.