LAST WEEK I addressed the dilemma of job outsourcing. I promised some remedies in this column.
In truth, the outsourcing of American jobs is one relatively small facet of the larger problem -- the steady erosion of jobs that pay middle-class wages. A global economy makes this challenge more difficult because it puts many American workers into direct competition with foreigners who are happy to work for less.
Most of the solution to the outsourcing problem, however, is domestic. In recent decades, institutions that once produced a more equal society have been dismantled or weakened. These included government regulation of wages and working conditions, of industry practices, of a worker's right to choose a union (or not), as well as various social investments that once contributed good jobs. If we can rebuild these, the loss of some jobs overseas will continue to be a problem, but a manageable one.
The majority of jobs in the economy today are in the service sector, and many of these need to be close to the customer. A job in a hotel, a nursing home, a restaurant, a university, or a public school cannot easily be outsourced overseas.
So the first remedy is to make these good jobs. We can do this with higher minimum wages, local living wage ordinances, by enforcing the right of workers to join unions, and structuring these jobs to encourage and reward higher skills and career paths.
Enforcement of the Wagner Act, which allows American workers a free choice to vote in a union, has become a joke. Employers find it cheaper to fire pro-union workers, hire fancy law firms to conduct union-busting campaigns, and pay the very infrequent fine.
One happy exception speaks volumes -- the successful struggle by the Hotel Employees and Restaurant Employees to turn Las Vegas into a union town. Today, the most humble workers in Vegas's hotels -- those who clean the rooms -- are paid middle-class salaries with health benefits and have career opportunities. They are becoming homeowners and starting to live the American dream. The higher labor costs are a drop in the casino bucket.
After all, no inherent economic logic required semi-skilled factory workers to earn middle-class wages. What made the difference was strong unions and federal enforcement of the right to organize. Blue-collar service jobs could pay decently, too.
Second, we need more human service jobs that pay professional salaries by addressing unmet social needs. At many hospitals, nursing staffs are spread thin. Residents in nursing homes are cared for mainly by inadequately trained people earning barely above minimum wage with very high turnover rates. Budget cuts have decimated mental health services. America's children need a whole new set of professionally trained child development workers.
These social needs should be met in the time-tested way -- by taxing those who can afford to pay and using the proceeds for social investments. America's social outlays have been reduced to the level of the 1950s. Let's have a new marriage between necessary services and good jobs.
Third, while manufacturing jobs may never employ the work force they once did, public policy can help stimulate an advanced manufacturing economy. Al Gore didn't invent the Internet, but the US government did -- as a byproduct of defense spending. A lot of very good jobs were created as high-tech industries took off. Government subsidy of biotech research, likewise, has helped incubate an industry with good jobs both in research and manufacturing.
Government could work alongside private industry to invest in new technologies for energy independence. We could make a national commitment to bring broadband cable service to every home, which would create a huge new market for jobs. These strategies would both create millions of good jobs in research, services, and manufacturing.
Trade and oursourcing do need to be addressed, too. If workers in countries that trade with the United States are assured the right to form unions, wage competition will be less of a problem. Repealing tax incentives to outsource jobs would also help. If we enforce fair trade, the United States could have more export opportunities to balance our increased imports.
One approach to creating good jobs, however, is a proven failure: George Bush's strategy of cutting taxes, gutting regulation, and trusting private industry to do the rest. This path has led to a few astronomically compensated executive jobs, a bonanza for a few fortunate investors, and a slow slide for the working middle class. Ultimately, many roads are available in the new economy. How to reconcile globalism with good American jobs remains a political choice.
Robert Kuttner is co-editor of The American Prospect.
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