Sharp as Teeth and Stars

In all the chatter about our “jobless recovery,” how often does someone explain the simple feat by which this is actually accomplished? US productivity increased twice as fast in 2009 as it had in 2008, and twice as fast again in 2010: workforce down, output up, and voilá! No wonder corporate profits are up 22 percent since 2007, according to a new report by the Economic Policy Institute. To repeat: Up. Twenty-two. Percent.

This is nothing short of a sea change. As University of California-Berkeley economist Brad DeLong notes, until not long ago, “businesses would hold on to workers in downturns even when there wasn’t enough for them to do—would put them to work painting the factory—because businesses did not want to see their skilled, experienced workers drift away and then have to go through the expense and loss of training new ones. That era is over. These days firms take advantage of downturns in demand to rationalize operations and increase labor productivity, pleading business necessity to their workers.”

How does corporate America have the gall? You pretty much know the answer, but for official confirmation let’s turn to Erica Groshen, a vice president at the Federal Reserve Bank of New York: It’s easier here than in, say, the UK or Germany “for employers to avoid adding permanent jobs,” she told the AP recently. “They’re less constrained by traditional human-resources practices [translation: decency] or union contracts.” In plainer English, here’s Rutgers political scientist Carl Van Horn: “Everything is tilted in favor of the employers…The employee has no leverage. If your boss says, ‘I want you to come in the next two Saturdays,’ what are you going to say—no?”