Posted by Bob Lord
It seems I"m bumping into more commentary on inequality lately, but I honestly have no idea whether that's because people are waking up or because my browsing pattern is putting more and more of that commentary in front of me. I fear it's the latter.
In any case, Jared Bernstein put in his two cents last week a NY Times column, Where Have All the Jobs Gone? The piece is an interesting example of fear-driven commentary. Bernstein succinctly draws the connection between inequality and jobs:
Third, a growing number of economists believe that our very high levels of inequality are not just whacking the incomes of the “have-nots” but are slowing job growth as well. Part of this works through the demand channel: with so much spending power in the hands of so few, consumer demand is becoming bifurcated. Walmart will do well on one end, Neiman Marcus on the other, with too little in between. Another part works through misallocation: too much economic activity devoted to “innovative” finance and too little to sectors more germane to middle-class jobs and incomes.
He recognizes the impact of recent productivity gains on jobs:
One explanation may be that capital investment has become, to put it politely, more “labor saving.” Yes, this process has been going on forever, but robotics and other ways of automating tasks may be accelerating it.
How do we address this problem? Bernstein urges various job creation measures. But reading his conclusion, I get the feeling that he knows the true solution, but just doesn't want to be marginalized by advocating it:
Like many European countries, we could ask less of our people in terms of work, and hold them harmless by broadly redistributing our productivity gains. But I don’t see that in our future. What I do see is a growing disconnection between growth and jobs. Setting a path to full employment is the best way to alter that dark vision.
Bernstein is a smart guy, really smart. He has to know that we can't address inequality without redistibuting our productivity gains. If the productivity gains are not redistributed, the massive income and wealth gains at the top also will not be redistributed. And that may be part of why Bernstein sees a growing disconnection between growth and jobs. So, what is he advocating? Essentially, he's urging that we accept the inequality, but somehow create enough jobs so the masses don't starve (or rise up). He knows better, but advocating redistribution would mean death for a mainstream guy like Bernstein. No more space in the NY Times op-ed page if he goes there.
It's unfortunate. Bernstein could be a great advocate for economic justice, if he'd just shed his fear of being marginalized. And Bernstein's fear of being marginalized pales in comparison to the fear Reps and Senators have of losing the next election.