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In an article in The New York Times titled "Some Very Creative Economic Fix-Its," New York University economics professor Andrew Caplin calls for workers to put their stakes in a "cater to the rich" economy.(1) According to Caplin, growing inequality is a fact of life in the future of the US and global economy - "some people will succeed and others will not." Rather than judging this to be bad or good, the poor and middle class would do best by trying to "understand the needs" of the wealthy and attempting to provide services to meet their demands.
Rand Paul recently expressed a similar sentiment in the immediate aftermath of his Senate victory. "We're all interconnected in this economy," he told CNN's Wolf Blitzer. "There are no rich, there are no middle class, there are no poor. We all either work for rich people or sell stuff to rich people."(2) For Paul, the "cater to the rich" economy is already here. The key now is to expand it, starting with extending tax cuts for the wealthiest to spur their spending and investment and create more jobs.
From the perspective of someone who is currently unemployed and has worked a variety of low-wage temp jobs over the past year, I think both Caplin and Paul are onto something. Based on my experiences, I want to submit a modest proposal for a "cater to the rich" jobs program that would provide guaranteed jobs, housing and food to millions of Americans.
My most recent job in the "cater to the rich economy" was picking orders and assembling bracelets for the upscale jewelry company Chamilia. Most Chamilia beads for their charm bracelets sell for between $25 and $65 each, though gold ones can cost over $400, so I doubt they are in the price range of most working people.(3)
My co-workers and I were almost all temps hired through temp agencies like ProStaff (recently renamed Attero Human Capital). We were happy to have this job, but frustrated when it ended after fewer than two weeks. We're more than willing to "cater to the rich," but we'd like, more than anything else, to have some job security, rather than the instability that comes from working through temp agencies. Many of us had just recently been among 550 workers hired for a call center job we were told would last a month, but only lasted a single day.(4)
Across the country, there are millions of people suffering from a similar fate, either unemployed or lacking even minimal job security. And nearly two million long-term unemployed will exhaust their unemployment benefits by the end of December, raising the grim prospect of even more homelessness, and even starvation. In exchange for job security, I think we'd be willing to make some sacrifices.
Therefore, my proposal is that state governments urgently organize big job fairs of a new type: "The Cater to the Rich Job Extravaganza." Workers participating in this job fair would be guaranteed jobs, housing and food by employers at the fair - for life. In exchange, workers would agree to give up their wages, which would hopefully spur the type of long-term hiring that companies have been hesitant about despite record corporate profits. I was only making about $10.50 an hour anyway (when I could find work), and when you add up rent, utilities, transportation, food, and other bills, there's really not much left over - especially when you don't work regularly. Any money saved on wages could also be used to provide more guaranteed jobs for other unemployed or underemployed workers. In order to insure that workers are free from pre-existing conditions that might impede their work abilities, employers would be free to fully inspect their potential employees at the job fair, from head to toe. Insurance company representatives would be on hand to aid these inspections.
I can imagine that this proposal would be quite attractive to many workers. For example, it might appeal to the "Amazon gypsies," the 500 temporary workers living in RVs and campers near an Amazon.com warehouse in Kentucky, where they will make $10 an hour until Christmas, after which they will drive on in search of another job.
I believe it would be most convenient and efficient if employers provided the guaranteed housing and meals in my proposal on or near the premises where workers will be working, and I think this would definitely help attract workers. I say this because several of my co-workers on the evening shift did not get home until nearly 1:00 AM (after finishing at 11:00 PM), since there are so few buses running at night and they couldn't afford cars. By the time you wake up in the morning, it's time to head back to work anyway. Plus, a lot of us are currently living (miserably) with relatives or in our parents' basements, so a change of scenery would be appreciated.
Living on or near the premises would also help us spend more time with our kids, who we don't get to see much. Working from 2:30 PM to 11:00 PM means that you're asleep when your kid goes to school and at work when they get home - but it'd be easier to see them without a long commute.
Speaking of kids, we are all very worried about their future given the state of the economy. Perhaps, in exchange for our employers' housing and feeding them, they could promise to work for them once they are of age. If employers could guarantee them employment for life, I think this is a deal we would be willing to make. And if it turns out that another company or wealthy individual could use their services better, they could pay a transfer fee to their current employer. This would help our children avoid the same instability and insecurity that we have gone through.
There could be additional incentives put in place to encourage workers to sign up for this jobs program. For example, many of us are in over our heads with mortgage payments we can't afford, meaning it would be hard for us to sign up for a scheme requiring us to forgo wages. Perhaps mortgage, credit card, student loan, and other debts could be forgiven to those who sign up - a bailout for workers kind of like that given to Wall Street. In exchange, the big banks and others owed money could be given the services of a certain number of workers in this jobs program. The investment banks will pay out $89.54 billion to their employees in 2010, so there should be no shortage of opportunities to cater to them.
Of course, if we ever want to leave the jobs program and try our luck in the job market again, we would reassume our debts, with heavy interest rate penalties. This is the only fair way to prevent people from signing up just to get rid of their debts.
There are many potential benefits to this proposal in addition to providing jobs. For example, many have bemoaned the decline of community in modern America. As it is right now, workers on temp jobs rarely build ties with one another, since we are rapidly laid off or shuffled from project to project and we all come from different communities. If we were all living together and guaranteed employment for life, this would certainly aid a revival of community spirit and end the days of "bowling alone." Instead, in our free time, we could organize activities like dances, sing-alongs and Bible study groups.
This proposal might also help the environment by reducing the commute to work and, thus, cutting carbon emissions. Further, rich people love organic produce (Caplin envisions small-scale farmers succeeding in the "cater to the rich" economy), so perhaps some employees could be given jobs setting up gardens to provide locally-grown food.
This is also a politically realistic program. Jobs programs usually involve proposals to dramatically increase public spending, which is politically unfeasible these days. Not only do the Republicans control the House of Representatives, but the leaders of the Democratic Party long ago recognized that America's future lies in a "cater to the rich" economy, and smartly oriented themselves toward policies that would help concentrate wealth at the top in exchange for campaign donations.
Luckily, my jobs program requires minimal public expenditure and is mainly dependent on private sector initiative. Tax cuts for the richest Americans could (and should) be extended, helping them to guarantee more workers jobs, housing and employment. I do, however, think it would make sense for the government to pay for a 2011 Census of rich Americans, asking them what types of stuff they like and how they can better be catered to. This "cater to the rich" Census would provide temporary jobs and also help workers prepare for future job fairs. In addition, since private employers would be guaranteeing jobs, housing and food for life, this proposal would help reduce the number of people on Social Security, thereby helping to reduce the long-term deficit and fulfill the goals of Obama's deficit commission.
Other countries facing high unemployment might also consider this program, though they could implement versions reflecting their political systems and their own peculiar institutions. For example, Britain and Ireland have a larger public sector than the US (though it is increasingly under attack) and, therefore, it might be easier for the government to provide guaranteed jobs, housing and food in "workhouses."
Finally, and perhaps most controversially, it would make sense to bar anyone signing up for this jobs program from voting, because they might have an incentive to vote according to their employers' wishes or interests. But more than 40 percent of Americans don't vote anyway, and both political parties can be trusted to steward the transition to a "cater to the rich" economy, so this shouldn't be a big deal.
Some might worry that this proposal sounds peculiarly like certain previously discredited economic schools of thought in American history, but I think we have to put everything on the table to confront this jobs crisis, rather than prematurely judging proposals based on abstract moral arguments. As Professor Caplin explains, it's ineffective to start arguments with "should," which cuts off creative thinking and problem solving. Instead, I hope we can apply the best insights from the history of American economic policy to creatively tackle the challenge facing us today of how to provide jobs for the 15 million unemployed.
P.S. Even the great economic thinker Karl Marx understood the potential benefits of such a proposal: "If [the worker] resigned himself to accept the will, the dictates of the capitalist as a permanent economical law, he [or she] would share in all the miseries of the slave, without the security of the slave."(5) Marx recognized that if workers are to accept growing inequality, they might at least be provided with some security.
1. David Segal, "Some Very Creative Economic Fix-Its," New York Times, 11/27/10.
2. CNN, 11/2/10.
3. For a glass bead that sells for $35, they pay $1.90 to a factory in South Africa. They pay similar prices to factories in Thailand and China, countries whose employers and workers seem to have recognized the benefits of committing to the "cater to the rich" economy.
4. See my article, "Hundreds of Twin Cities Workers Learn How to Become a Commodity."
5. Karl Marx, "Wages, Price and Profit."