The Jobs Won't Come Back

Former Secretary of Labor Robert Reich explains

The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that’s been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

For a solution, he proposes initatives

that span many years: early childhood education for every young child, excellent K-12, fully-funded public higher education, more generous aid for kids from middle-class and poor families to attend college, good health care, more basic R&D that’s done here in the U.S., better and more efficient public transit like light rail, a power grid that’s up to the task, and so on.

I’m absolutely for this. My only criticism of Reich—and its one that I would make of myself—is that he doesn’t outline a system for how this sort of investment leads to new jobs. Industry is gone so how do we replace it?

Unfortunately Obama is much more interested in immediate gratification, promoting investment banks than infrastructure or even education. We have a mandate for the war but not for education? What’s going on?

In the next Congressional elections, he will be burned badly for this, along with his efforts to support the war in Afghanistan, but I don’t see him changing. Unless the Republicans field a nut case, Obama’s cronies manage to cook the books into a recovery or something miraculous happens like they find bin Laden, he will wind up a supreme disappointment, a failed single-term President whose sole accomplishment was to be not quite as awful as Bush.

See the The Economic Reality Nobody Wants to Talk About.