Jeb! Bush May Be The Best Gift To Unions We’ve Had In Years

You’ve probably seen the Jeb!* Bush quote making the rounds on the Interwebs this week, but let me go ahead and drop it in here just to make sure we’re all on the same page:

“My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see. Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours” and, through their productivity, gain more income for their families. That’s the only way we’re going to get out of this rut that we’re in.”

Wow. He packed a whole heap o’ wrongness into one statement, didn’t he? Where to start? So many choices!

Let’s start with the idea that American workers need to be more productive. The New York Times noted:

From 1973 to 2011, worker productivity grew 80 percent…

Worker productivity is already at a high-water mark. Call me crazy…wait, no, call me “someone who can recognize really obvious things,” but if the premise is that the economy stinks and productivity exceptionally high, then “more productivity” may not be the right answer.

Now, is “workforce participation” at an all-time modern low? Well, only if you narrowly define “modern” as “post-1977.” Otherwise, no. Now, it is trending downward, so even though Jeb!’s statement is false, it hints at the truth.  If productivity is up, then each worker is doing more work per hour which tends to reduce the need for more workers. There are strong reasons to suspect that productivity and workforce participation are inversely related.

He then applies the Limbaugh-esque conclusion that the solution is to “work more hours.” That is, of course, the opposite of what the situation he’s describe calls for. If workforce participation is already too low (and I agree that it is), then asking the people who are already in the workforce to work more is going to reduce the amount of work available. This is not terribly complicated.

The best bit, the cherry on top, is the claim that increased productivity will lead to more income for their families. You’d think so, but you’d be oh-so-very wrong. Let me complete that quote from the New York Times:

From 1973 to 2011, worker productivity grew 80 percent, while median hourly compensation, after inflation, grew by just one-eighth that amount, according to the Economic Policy Institute, a liberal research group. And since 2000, productivity has risen 23 percent while real hourly pay has essentially stagnated.

That makes sense if you think about it in a capitalist mindset (and it would be un-American to do otherwise): If one worker can now do twice as much work, and there’s no increase in demand, it makes no sense to pay them twice as much. The smart move is to ask one worker to do the work of two, and then fire the second. This is super-duper important: Increased productivity, in a vacuum, decreases workforce participation and does not increase earning power. It’s great for the job creators, but the job doers kind of take it in the shorts.

Look at it this way: Let’s say you are a wheat farmer and someone comes up with a process that doubles everyone’s yield. So hurray, everyone produces twice as much wheat. Unfortunately, there’s not need for twice as much wheat, so all you’ve accomplished is cutting the price you get for your wheat in half, thereby getting paid the same amount for producing twice as much.

Now, it’s entirely possible that Jeb! is sending a coded message to the captains of industry that he “gets” it and he’s on their side. I honestly don’t think it’s anything that sinister; I think it’s just an incredibly tone-deaf and naive bit of campaigning. It’s disappointing in the sense that he’s supposed to be the moderate, level-headed one, and he’s prescribing a cure that would have seemed needlessly cruel in a Dickens novel.

The good news is that most every news outlet has picked apart Jeb!’s plan and said that this is pretty much the opposite of what a good policy would look like. The question is: What would a good policy look like? It would encourage more people to work, it would protect jobs against the temptation to cut them when productivity increased, and it would reduce, not increase, the hours each person worked. And, it would increase demand by increasing the amount of money in the hands of the people who will spend it, rather than increase the wealth of those who won’t. That, my friends, is what unions do. It doesn’t necessarily follow that if Jeb! is wrong, unions are right. But it makes a whole lot of sense, doesn’t it?

* I hate that we have so many Bushes in the American political scene that we have to specify which one we’re talking about. Please let’s not have Chelsea Clinton go into politics as well.

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