Let me start this post with a caveat: I am not an economist. I don’t play one on TV. At most, I’m a reasonably well-informed consumer of economic news.
That news, however, is troubling. Following the various indicators could give you whiplash–housing may be recovering, but unemployment claims are up. No, unemployment claims are down, job creation’s up, but retail is down. No, retail is up this month, but…Well, you get the point. If the economy were a car, it would be stuck in low gear.
There are as many theories about what ails the American economy as there are pundits and candidates for office. It’s too much government spending or not enough stimulus or the meltdown in the EU or GOP efforts to win the Presidency by delaying the recovery. And all of these analyses clearly point to contributing factors.
But what if what we are seeing is the start of a long-predicted “structural change” brought about by technology? What if Europe calms down and we get past November only to discover that employment still doesn’t return to previous levels? And since I’m playing “what if” here, what if instead of the toxic political finger-pointing and infantile blaming that characterizes our current politics, we had a serious discussion about the appropriate response to that structural change?
Persistent high unemployment would present a huge challenge to social stability and economic health. Fewer people with money to spend would depress markets; more people needing social welfare support would stress the federal budget and make it more difficult to reduce the deficit. The existence of a persistent underclass would generate resentments and social unrest at a level that would dwarf today’s Occupy movement.
It seems to me–again, an admitted economic amateur–that such a scenario would require government to become an employer of last resort. Surely, hiring people to mow parks, clean streets, assist in classrooms and do similar jobs would be preferable to welfare, both for those being employed and society at large. The tasks being performed would improve the quality of life in our cities and towns, and productive employment would provide people with both self-respect and money to spend in the market.
Right now, of course, the rhetoric is all about heading in the opposite direction: laying off even badly needed government workers and pooh-poohing their value. If we are seeing the start of structural change, it’s going to be awfully hard to turn that tanker around.