Today’s economy is paying the price of the peak of the popularity of productivity two decades ago.
It was difficult then to pass by a Borders, B. Dalton or Waldenbooks without seeing windows and shelves full of books touting the blessings of productivity.
Productivity emphasized doing more — or at least the same — with fewer people. It was an idea whose time had come and is reflected in today’s unemployment and underemployment figures: Why have three workers on the payroll when two will do?
Productivity measures output per hour of work. Weak productivity suggests that companies may have to hire because they can’t squeeze more work from their existing employees.
Labor Day is an opportunity to take stock of the ways in which workers are honored and respected, the U.S. bishops noted in this year’s Labor Day statement. Millions of workers, the bishops say, are victims of unemployment, underemployment, unjust wages, wage theft, abuse and exploitation. There are laws on the books to prevent or control the latter four, but unemployment and underemployment remain a problem.
“The only way to reduce the widening gap between the affluent and the poorest people in our nation is by creating quality jobs that provide a just compensation,” the bishops say in a statement.
How? Who pays the price, the taxes and the disincentives for outsourcing?
The current federal minimum wage is $7.25 an hour. If the minimum wage kept pace with inflation, it would be at $10.74 per hour. Many fast-food workers have organized walkouts in major cities to increase their wages to $15 an hour.
If this happens, are consumers’ feelings for justice so strong as to say, “Yes I will pay more for my burger to support the increase”? Or do employers keep their prices the same but reduce the number of employees? Would there be federal wage support along the same line as federal price supports for many agricultural products? And how many legislators would dare to support such action in the midst of an anti-tax environment?
One way to create the quality jobs the bishops envision would be through a major national infrastructure repair similar to the space program. It set a specific goal and a deadline. This could be done with no new taxes if there were to be a massive reallocation of taxes from foreign wars and military misadventures.
“Ethical and moral business leaders know that it is wrong to chase profits and success at the expense of workers’ dignity,” the bishops’ statement said.
For those who continue to chase profits, what about an excess profits tax to lessen the appeal of the chase?
The excess profits tax was designed to raise revenue in wartime by taxing increases in income over normal peacetime profits. Another version, the high-profits principle, is based on income in excess of some statutory rate of return on invested capital.
The rate of increase of profits could be related to rate of employment and to jobs creation.
Few disagree with economic justice and its principles, but few are ready to implement necessary steps to accomplish them. It certainly seems beyond the deadlocked legislative machinery now languishing in the United States.
It is not beyond repair. Complexity can’t be an excuse. The economy is a system created by humans and can be managed and modified by humans, given their will to change.
Kent is the retired editor of archdiocesan newspapers in Omaha and Seattle. He can be contacted at: firstname.lastname@example.org