According to the U.S. Bureau of Labor Statistics (September 2009), there are about 154-million people in the U.S. labor force. Of those, about 139-million (90%) have jobs and are receiving a regular paycheck. About 15-million (10%) are officially listed as unemployed. These are people who do not have jobs, but are actively looking for work, whether receiving unemployment compensation or not.This is the figure often cited as "the unemployment rate." However, there are another 82-million people who are listed as "not in the labor force." These are people who are not receiving unemployment compensation, and would be working if they could find jobs but, for various reasons, are no longer seeking employment opportunities. If these workers were included in the labor force, its numbers would be about 236-million, with 97-million (41%) unemployed. Somewhere between these two figures, lies the real numbers of people who are out of work.
But there's more to the story; these figures do not suggest the number of workers who are now
under-employed, having been forced to take jobs paying much less than the ones lost through lay-offs, down-sizing, or shut-downs. Nor do they reflect the extent of earnings being lost as a result of wage and salary cuts and shorter hours.
Against this backdrop, data from the Bureau of Labor Statistics also shows that the average rate of job creation in the U.S. over the past forty years has been about 2% per year. That would produce about 3-million jobs at today's employment rate. However, each year about one-million young workers enter the labor force, with fewer older workers now retiring each year. At this rate, it would take over seven years — until 2017 — to get all those who are currently unemployed back to work.
But the bad news doesn't end there; private sector job creation over the past ten years has, in fact, been minimal,
Job creation over the past ten years has been minimal, and is presently zero.
and is presently zero. This suggests a cruel reality for the unemployed, and for young people coming into the labor force. Opportunities will be few and far between, with many never being able to find full-time work.
Even for those who do, it will be a buyer's market. With a large surplus of available workers, employers will be able to freely pick and choose, without having to compete with each other for quality people by offering incentives such as better pay and more generous fringe benefits. This is happening already. Job descriptions are stuffed with all sorts of inflated requirements for prospective candidates, often to the point of being ridiculous. Since it is unlikely that anyone could meet all the requirements in such grocery lists, the hidden purpose of this phenomenon seems more likely to be to provide employers with plenty of wiggle room when it comes to evading federal rules regarding discrimination and fair labor practices. But even in the unlikely event that an applicant would be able to bring all of the stated skills, capabilities and qualifications, the starting pay offered is usually in no way commensurate ... often laughingly inappropriate.
Thus, it seems quite evident that if we insist on business as usual, the decline of the American middle class will continue, with increasing numbers finding their future to be a story of hard times such as people in this country haven't seen for a hundred years, eventually winding up as a struggle between the
haves and the
have nots. This is not good for anybody. It is a formula for disaster. Nothing promotes economic growth, cultural development, and peace like a middle class that is healthy, vibrant and growing. Wide rich vs. poor disparities in a nation promotes unrest, discord, destructive violence, and ultimately, revolution.
Hard times and calamity can easily be avoided if we have the courage to face reality and implement some major paradigm shifts.
Changing the Shift ParadigmFirst, the nation needs to shift from an eight-hour workday to a six-hour schedule ... from a forty-hour to a thirty-hour week. Businesses that presently operate around the clock will run four shifts,
The nation needs to shift from an eight-hour workday to a six-hour schedule.
instead of three, increasing their employment by 33%. Businesses that presently run eight-hour days, from nine to five, would then be open from seven to seven, increasing their employment by 100%. All by itself, this puts everyone back to work.
Second, we must shift to a universal health care system. This can be as simple as expanding Medicare to cover everyone. According to the Bureau of Labor Statistics, the average U.S. wage is presently $18.67 per hour, which amounts to about $37,340 per year. For a 24-hour operation to control employment costs while increasing employment by one third, wages would need to be reduced to $14 per hour. However, the average per employee health insurance cost for family coverage is currently $13,000, which amounts to about $6.50 per hour. Retired persons pay about $1,000 a year for Medicare. Assuming a family of four, a $4,000 contribution should be more than adequate, given that medical expenses for younger people, and especially children, are surely much less than those of the elderly. That leaves $9,000 available to wages which, if added back, brings average pay rates back up to $18.50 per hour.
Besides the obvious improvement in the general economy and the quality of our lives, full employment will go a long way towards solving Social Security financing problems and State tax revenue shortages.
Taking Control of Health care CostsThird, health care expenses need to be more sensibly managed.
Over the past several years, wage increases have been diminished as the cost of government-mandated employer-provided health insurance has escalated. The same has been true for Social Security recipients, whose cost-of-living increases have been eaten up by higher assessments for Medicare coverage. No worker is going to embrace a six-hour work day at the expense of a quarter of their regular earnings. And, as shown above, that does not have to be the case. Pay will remain about the same, the difference being made up for by reducing the cost of health care coverage. But in order to permit that, the cost of health care itself must be reduced. Significant reductions are immediately possible through the implementation of a few sensible changes, mostly affecting things that are already widely recognized as wasteful nonsense.
• Misdiagnosis and treatment error is a significant burden on the present system. While it is obvious to any practical person that perfection can never be achieved, and while exact figures are difficult to come by, it would appear that the error rates are presently upwards of 40%. In spite of all the technological advances, this rate hasn't change much over the past 100-years. Health care presently costs the U.S. about $2.5-trillion per year. Reducing the error rate by half would potentially save a fifth of that — $500-billion — while at the same time actually improving the quality of care.
• Medical care during the final few months at the end of life presently accounts for about a tenth — $250-billion — of total U.S. health care expenditures, $110-billion of which is paid for by Medicare. Much of this cost arises from extraordinary treatment efforts on patients known to be terminally ill. Much of it is understandable, since when the decision is left up to them, it's difficult for anyone to decide the fate of older family members, and it's easy to put off the inevitable decision by hoping for a miracle. In other cases, it often appears that hospitals are quite willing to turn terminally ill patients into "cash cows," knowingly providing expensive treatments they know to be unnecessary or useless. Extra-ordinary efforts to prolong life often only prolong misery for patients who would not have approved such choices, but are no longer capable of speaking for themselves. Much of this misery and expense can be saved by developing a common practice of counseling and decision-making before the end-of-life crises' present themselves, much as people now commonly make arrangements for the settlement of their estates and other affairs.
• Elective surgical treatments, such as coronary bypass and joint replacement operations have long been known to be favored revenue generators for hospitals, with prices varying widely between different hospitals. Hospitals now host upwards of 500,000 coronary bypass operations per year, with an average price of $75,000. That's $37.5-billion worth of procedures which many consider unnecessary, and useless so far as prolonging life is concerned. Joint replacement procedures vary, but presently average about $45,000. According to American Academy of Orthopedic Surgeons, hospitals are doing over 700,000 knee and hip replacements each year. That comes to another $32-billion, and again, the advisability of such procedures is often arguable. According to the same source, surgeons perform about 23,000 shoulder replacements. In his book
The Healing of America, author T. R. Reid compared various approaches for dealing with an old shoulder injury by visiting other countries. In the United States, he found orthopedists most apt to recommend joint-replacement surgery, costing tens of thousands of dollars. In France and Germany, doctors were more apt to advise a regime of physical therapy, while in Britain, his complaint was summarily dismissed. In India, he was finally treated very effectively and inexpensively with herbs, massage, and meditation. With the numbers and prices of these dubious procedures drastically escalating — the present total $100-billion cost expected to soar beyond $500-billion within the next 20-years — it's obviously time for a serious value analysis.
• Malpractice litigation, in itself, may not be a highly significant cost item, with insurance costing the medical industry about $10-billion per year, and awards amounting to another $5.8-billion, according to the University of Michigan. What isn't accounted for however, are two other factors ... doctors and hospitals practicing defensive medicine by requiring extensive and usually unnecessary consultations and lab tests ... and their reluctance to recognize and admit error, and promptly engage in remedial procedures and treatments. The cost of these realities can never be known, but it is obviously not insignificant. It can be greatly reduced simply by requiring courts to limit awards to reasonably expected remedial costs, and by limiting attorney fees to fair amounts according to a published schedule.
The Courage to Adapt to New RealitiesIt should be clear that we are presently on the cusp of some major paradigm shifts. At the dawn of the twentieth century our American culture changed from agrarian to industrial. Now, a century later, we find ourselves at a similar moment, where what has worked well for the past few generations is clearly no longer serving us well. Insisting on business as usual and waving the flag is either lazy thinking, or succumbing to the fear of change. Worse yet, many of those whom we have entrusted with the
America is presently on the cusp of some major paradigm shifts.
responsibilities of leadership have fallen victim to the insidious lure of corruption that has become institutionalized in our political system, and are concerned first with protecting the interests of the those who are filling campaign coffers and supporting their regal lifestyles.
It always takes time for people to embrace new ideas and adapt to big changes. Government can lead by phasing in the six-hour workday in the military, for civilian government workers, and in newly created work programs similar to the WPA and CCC programs of the 1930's. There is plenty of work to do in America; eliminating the maintenance backlog in our national parks, cleaning up urban blight, serving as mentors and teaching assistants in school classrooms, and more. Temporary public works programs will provide immediate employment for idle hands, boost self-esteem, and teach skills that individuals can ultimately take into the private workplace, while also creating a body of experience with the six-hour workday paradigm.
Our choices are clear. We can muster the courage needed to try new ideas and work towards their successful implementation, or we can continue to accept defeat at the hands of lethargy, wishful thinking, fear and special-interest politics.
The time is ripe for some newly creative and uncommonly courageous leadership in America. Perhaps some of those presently serving will find themselves able to rise to this occasion. Otherwise our fortunes will depend solely upon the Grace of God.
Labels: Culture, Politics