THE BURGER ECONOMY

Any moderately well-informed person understands that what we generically call the "unemployment rate" is unadulterated bullplop. Through the neat accounting trick of reclassifying the long-term unemployed (6 months or more) as no longer part of the workforce is based on the quaint notion that anyone unemployed for half a year has stopped trying to find a job. The official rate, then, masks a shadow population of long-term unemployed that, if counted, would likely double the official rate.

The never-reported U6 unemployment rate, which accounts for long-term and "discouraged" unemployed, is currently hovering between 16% and 17% compared to the official (U3) rate of about 9.5%. An honest economist will tell you that even the government's U6 rate is understated, as there are a greater number of long-term unemployed (including some who have never been employed) floating around outside of what we define as the labor force. If we could really count everyone – unemployed, part timers who can't find full time, discouraged workers who have stopped trying, etc. – we're probably looking at something like 1 in 5 adults who could be working but are not.

Even that understates the problem. Consider this unremarkable, back page news item about automaker BMW's distribution center in California. It is being closed and outsourced. Were it outsourced to a foreign country, its employees would probably end up in the unemployment statistics eventually (for a short time, if nothing else). It isn't heading to Mexico, though. The distribution center is being outsourced to a contractor that will operate the warehouse with the usual perks of subcontracting – namely a high turnover, $9/hr workforce – instead of the 20+ year veteran BMW employees.

This incident isn't exactly national news. We're talking about approximately 75 employees. Maybe the old BMW workers will go to work for the contractor doing the same job for 33% of their old salary. Maybe they'll be replaced by different workers. Either way the unemployment numbers over which we all obsess do nothing to capture what happened here, and what happened here is more damaging to the macroeconomy than plain old unemployment. There's no net job loss. It's merely a transition from 75 good jobs to 75 shit ones, from 75 people who are productive in the economy to 75 who live paycheck-to-paycheck as the working poor.

I can't tell which is worse, from the perspective of both the individual and the economy as a whole: being unemployed for a while but eventually finding a decent job or being continuously employed but "downgraded" from middle class to working poor status. Since the 1980s the unemployment statistics have been used to cover up what is too often happening to the employed. We can trumpet that 5% unemployment rate that we have in "normal" times all we want, but it is little more than a layer of paint over a workforce that is rusting from the inside out. There's little benefit to a low unemployment rate if the workforce is occupying itself by serving one another fast food.

Be Sociable, Share!

37 Responses to “THE BURGER ECONOMY”

  1. Noskilz Says:

    It does make one wonder exactly what could drive this economic recovery so many seem to be expecting.

  2. Tim Says:

    If we keep our current policies and the ideology behind them we're likely to see a massive shift in US economic activity within a decade or two. The (productive) economy is currently built on domestic consumption. As we push people out of this economy we starve our own future demand.

    I for one am ready to welcome our new poverty-based economy. I'll just be doing so from the other side of the world.

  3. Major Kong Says:

    Note to Corporate America – people who don't make any money can't afford to buy your stuff.

    Just in case you were wondering why nobody was buying your stuff as of late.

  4. Tim H. Says:

    The problem with turning the economy into "Burger World", there's big money when only a few businesses do it, not so much when they all try to do it. Partially, a side effect of executives with little experience of physical work thinking "A fucking monkey could do that" and paying accordingly. BTW, what do you think California Beemer owners will think of their new cars being prepped by burger flippers?

  5. Professor Coldheart Says:

    Having worked for a distribution center, I shudder to think at the end result on BMW quality. I worked for a DC for a medical supply firm fresh out of college. Quality control is tough to manage even with lifetime employees. You need people who identify with the company – like, say, having worked there for twenty years – and have some pride in their work. Nothing against temps, but when "the BMW plant gig" is one six week stretch out of many, what incentive would they have to focus on the details?

  6. c u n d gulag Says:

    Serfin' USA!

    BMW knows it couldn't do that back home, because unions are so powerful there that they might very well get a general strike on their hands because the workers see what's happening over here, and in other countries to people like themselves, and will want to nip it in the bud. If we were like Germany, our workers would be a lot better off. We were, once upon a time, better than them in that regard.

    Actually, what some people are missing is that what we're looking at probably IS the jobs creation plan for America!

    Corprations want to make our people here so hungry and desperate for work that we'll do anything, under any conditions, at any wage, any age, at any hours, with no benefits.

    Eventually, as workers over there start to demand better for themselves, the Indians and Chinese will say to the workers, 'Take what you got. assholes, or we start to outsource YOUR jobs to America. Those people want to work. They'll do anything!" And so, jobs start to return here. SUCCESS!

    We're now well on our way to being a Third World shithole. Maybe a Fourth World one. But we can console ourselves with being the BEST-ARMED Third World shithole!

    The long term goal is for us to be 'The Dominionist Christian Fascist States of America' (DCFSA). Corporations and government will work side by side to maintain order, and dole out jobs to the worthy. Only the 'right' people will be able to vote. And people will be kept docile by going to church to pray that they either keep, or get, jobs. Kind of like a Jesus police state, sponsored by The Chamber of Commerce.

    Think of Haiti with a powerful military, armed to the teeth with nukes.
    I wonder how the rest of the world feels about that?
    No worries – the plan is for the world to be run by corporations, with serfs willing to do anything to make it to the next day.
    So, in that regard, we're still a 'world leader.'

    DCFSA! DCFSA!! DCFSA!!!

  7. Middle Seaman Says:

    A comedian's tragedy is the way to describe this post. 20% of us are unemployed, live in poverty, find themselves and their families outside society and totally forgotten by society itself. The criminal gang in Washington, headed by a criminal president, is busy playing games with the deficit. On top of not giving a shit about the forgotten 20%, their schemes are designed to enrich the rich, increase taxes on everyone else, destroy what little we have of a safety net and last, but by no means least, their deficit reduction play is proven to increase the 20% to at least 30% in no time at all.

    Don't cry, Otto.

  8. Monkey Business Says:

    At the "height" of the recession in 2008-2009, I was unemployed for about a year. To find a job in my field, I had to move from Chicago to Indianapolis and take a 20% pay cut, which pushed my salary today below what I was making fresh out of college in 2006.

    Strictly speaking, even though I'm making less I'm making more than I would on unemployment. But, I'm one of the lucky ones. That 1-in-5 figure might be true across the whole spectrum, but for people under 30 it's probably closer to 2-in-5.

  9. The Moar You Know Says:

    I graduated high school in 1984. My first job straight out of high school paid me more, adjusted for inflation, than any other job I held all the way up until 2007 – 23 years later.

    That was a long fucking time to be poor.

    I'd like to say that one party is worse than the other in this regard, but they aren't. The Reagan recession that started in 86/87 took a brutal toll on most folks I knew. The S&L crash put one family member of mine out of her home and onto the street. Bush I tried his best to deal with that recession (which lasted here in California until 1995) but he was fighting his own party all the way and it cost him reelection. He was a fascist but a responsible one (never thought I'd have a good word to say about the man, but Christ, he's looking real good in comparison to what came after him). I knew plenty of people who were making good money in the Clinton years. I wasn't one of them. Clinton's policies didn't do shit for people like me, and NAFTA kicked the bottom out of a large but utterly forgotten and ignored portion of the population – most of which I'm betting are the current suckers paying homage to the TeaTard faction of the GOP. They may be stupid but they're not forgetting the party affiliation of the guy who signed away all their jobs. We all know what the Bush II/Greenspan axis of evil put in place for us.

    I have always voted Democratic as it has consistently been the lesser of two evils, and will do so again. But dammit, I am tired of fighting and would really like it if someone would at least throw me a fuckin' bone.

  10. acer Says:

    After making good money for a few years, being on the dole through 2010 and recently, after a long hunt, joining the working poor, I'd say working for peanuts isn't much different from being unemployed. You make enough to survive for the day but not to save or pay off your debts, and your spirit is slowly rotted out by the humiliation of having no freedom, no choice and no real ability to set long-term goals. Not to mention that one's AmeriCAN get-up-and-go isn't exactly enhanced by doing shit that one hates, and has no personal investment in, every day. The temptation to goldbrick, sabotage and embezzle grows stronger.

    Obviously, no one owes me a living, and there's volunteer work to keep the blood up, and the joy of friendship, and campaigning for the left-wing dog-catcher and blah blah blah. I just don't think creating a huge, permanent peasant class is going to work out well for our economic betters, in the long run.

  11. WyldPirate Says:

    Wow, where's the Obama fluffing from the BJ regulars posting here?

    I've got a story similar to many here. My best job was three days out of high school working for Ford Motor Company in 1977. It was a stint prior to college and I came back to it in 1978 after realizing I was pissing away my money drinking and smoking weed at school. The pay was 11.75/hr (equivalent to ~56K today) plus shift premium, plus 1.5 time for overtime and triple time for holiday overtime. Insurance was great. Then I got laid off at the end of '79 and went back to school.

    Was an officer in the military and almost got to the level of pay and benefits before I decided to go to graduate school. Never came close to earning the same since despite having a MS and PhD and doing postdocs and adjunct shit forever until I got canned in budget cutbacks in '09.

    I just recently landed a gig at a backwater community college and I'm damned happy to have it. The seem happy to have me as well. I feel fortunate to be there and to keep a roof over my head and have health insurance.

    I feel for the kids coming along now. The days are gone from my childhood of the 60s and 70s where you could be middle-class with a high school education and a single wage-earner. Shit, it's touch and go now if you can do it with a baccalaureate (or higher) now. And a retirement of the quality that my high school educated parents are enjoying now? That's simply out of the question unless I hit the lottery.

    The Masters of the Universe are slowly strangling the shit out of the goddamned goose that laid their capitalist golden egg.

    What I don't get are the Obots that think Obama gives a flying fuck about the middle class. He is going to fuck them straight in the ass just like he fucked the UAW and their contracts to save Chrysler and GMs asses. It's funny how the "contracts" for the bankers that allowed them to pay billions in bonuses using taxpayer dollars were honored by Obama and he shit on the UAW.

    My guess is to why he is doing this is because he is one of the "them" now and has been since his Columbia and Harvard days. The rhetoric is just bullshit as his actions are telling the story and has since nearly day one.

  12. Elder Futhark Says:

    "Not to mention that one's AmerICAN get-up-and-go isn't exactly…"

    An interesting study done in WWII where American civilians underwent voluntary starvation (much the same as civilians volunteered to not bathe and poo in baggies to find out what the moon astronauts had to look forward to). The starvation study was to determine the best way to feed people who had lived on "austerity" diets. One interesting side observation was that the can-do American spirit, the optimism, generosity, and energy, was simply a matter of being well-fed. Put a sturdy, manly people under less than ideal food conditions, and what do you know, you get a bunch of whiny little nerds. Big surprise.

    Point is that the motherfucking cocksuckers have got you exactly where they want you. Like a fucking Grateful Dead groupie fest, trading wooden beads for hair feathers and crack pipes, back and forth, back and forth.

  13. Andrew Says:

    Look, I'm all for good jobs at good wages, but warehouse work is shit work and can be done adequately for $9/hour and no benefits. If you're paying someone $27/hour plus benefits to do that work, you're overpaying.

  14. Major Kong Says:

    @WyldPirate

    "What I don't get are the Obots that think Obama gives a flying fuck about the middle class. He is going to fuck them straight in the ass"

    Sadly, at this point, my only choice is between the guy who wants to fuck me straight in the ass and the guy who wants to slit my throat and then grind my corpse up for dog food.

  15. acer Says:

    @Andrew:
    Look, no one said the solution is more $100K night-watchmen. But I don't think outsourcing and downsizing everything, and forcing the erstwhile middle-class to mudwrestle each other for increasingly precious shitwork, isn't proving to be a solid alternative. If the "supply side" got unceremoniously bent over and fucked with taxes and regulations for three decades, I would not think it unfair. At the least, something needs to change.

  16. acer Says:

    *is* proving to be…

  17. wellnab Says:

    @Major Kong:

    You'll probably have to work for awhile to earn the throat-slitting.

  18. Brian Says:

    Given the bi-partisan ass-raping of at least the last 30 years, I'd say the future is proctology.

  19. Mike Says:

    But according to Heritage, the poor have it swell:

    http://www.heritage.org/Research/Reports/2011/07/What-is-Poverty

  20. acer Says:

    @Mike:
    Don't look now, but some right-wing assholes think we can still take on more credit card debt!

  21. David Says:

    I suspect 2010 was my best year ever in regards to salary. My job of 13 years was outsourced to the Philippines. Eleven months and 236 job applications later I landed a job three weeks ago. It's a 3-month contract position making 25% less but at least it has health insurance and maybe, if I'm a good employee, might go perm someday.

  22. Chris Says:

    "Look, I'm all for good jobs at good wages, but warehouse work is shit work and can be done adequately for $9/hour and no benefits. If you're paying someone $27/hour plus benefits to do that work, you're overpaying."

    Do you want a decent economy or not? It is this mentality that has sent American economy down the shitter. Blue collar jobs are tough, dirty jobs, and they are merely workers. Hey, we can send these jobs to Mexico and exploit people for 50 cents an hour and be just fine in America doing civilized service jobs, right? We should pay the remaining blue collars less, have them put less money into the economy and make the rich richer, right?

    Uh, no. The more money people make, the more money they can put into the economy, which then makes the economy stronger. There are a lot more regular folk than rich folk, and you want to limit their spending ability?!?

    Sucking money out of the economy is a bad thing: bad! No need to belittle blue collar work, either.

  23. Patrick Says:

    If we take the behavior of conservatives at face value, they don't mind working shit jobs at $9/hr. Conservatives can't all be rich, they can't even be mostly rich or upper middle class. There aren't that many rich and upper middle class in the us. I tend to think that conservatives care more about being part of the conservative brand than improving their economic well-being. Its not really that hard to believe. Throughout history most people have put up with objectively worse conditions, and Americans are suckers for branding. On a side note, the entymology of the term "branding" is somewhat ironic. It used to mean a stamp that businessmen put on their cattle , as far as the conservative brand in right-to-work states goes, I can't see that the meaning has changed much.

  24. Major Kong Says:

    I think there's a name for people who make a decent wage. I believe they're called "customers".

  25. Fossella Says:

    The only explanation I've got for conservatives is that they think they're going to be rich someday, when their ship comes in. Good luck with that.

  26. Southern Beale Says:

    It's the cheap labor economy. Somewhere along the lines the Ownership Class decided that the problem with America is that their labor cost too much. So they pull stunts like this, hire foreign workers (legal and otherwise), outsource to foreign countries, etc.

    These companies are very profitable. It's not that they have to do these things because they will go out of business otherwise. It's just that some people want multimillion dollar bonuses. They're not profitable ENOUGH for shareholders and the like.

    It's the whole greed thing. Once upon a time in America people who ran a distribution center felt connected to their community and wouldn't dream of pulling a stunt like that to save a few bucks. They had a moral sense that it was wrong. But those days are long, long gone.

    And the thing is … you hire a middle man to do the same job and somehow it's going to be cheaper? Nonsense. It's never cheaper. They will cut a corner somewhere, and BMW will end up paying in the end.

    Nashville did a similar thing with its public school custodians. Budgets, don't you know. So they outsourced their school custodian work to a private company. Workers were fired and could maybe be rehired earning far less and getting no benefits. It's the American way: screw the workers. Somehow it will all trickle down on them.

  27. Southern Beale Says:

    By the way, this is a worldwide phenomenon, and it's been going on for years. This isn't something that just cropped up in America in recent years. I wrote about it last year here, and quoted from the 2000 book "Natural Capitalism":

    "People are often spoken of as being a resource — every large business has a “human resource” department — but apparently they are not a valuable one.

    [...]

    "In a world where a billion workers cannot find a decent job or any employment at all, it bears stating the obvious: We cannot by any means — monetarily, governmentally or charitably — create a sense of value and dignity in people’s lives when we are simultaneously creating a society that clearly has no need for them."

    As I wrote then, the fruits of industrialization and globalization are a devaluation of all people, including you and me; the poor are the most visible victims but we're all superfluous to the modern economy.

  28. vegymper Says:

    Isn't the bigger problem that human work is less and less needed? Everything can be done by machines nowadays… The full screenplay of BEING a worker, to be proud of your work, and receive a decent wage for it might have been invented and instilled in our brains by the Goebbelsian propaganda machine plus a little bit of "Christian" ethics… Times change, and they hit us underwater. Ugh!

  29. Matthew Says:

    BMW shopping to cut wages is the same as someone shopping at walmart. Sure the quality isn't as good, but the deals are just too hard to pass up.

    The sad reality is that if people will still work for nine bucks an hour, someone will offer only that amount. Unless we start creating opportunities for American workers, we will continue to move towards wage parity with the rest of the world.

    Blaming corporations for cutting costs is an argument against human nature.

  30. Patrick Says:

    I just got to thinking about how blaming government is an excellent way to avoid responsibility for personal failures. If your business fails and you're now working a shit job that you hate, you can blame taxes or the expense of regulatory environment, instead of your crap business plan or tyrannical management. If you get fired it's because the company had to hire all these bureaucrats to cut red tape, not because your poor retention during school gave you the impression that the world is 6000 years old. For all assertions that conservatism is about personal responsibility, it seems to me that it is more about assigning blame.

  31. trickle down effect? Says:

    Don't republicans largely base there political theory on trickle down? I'll believe it when I see it. There was a time in American history when the CEO of a company only made 20 maybe 100 times there lowest paid employee (not sure) what is the disparity now? I can tell you that while my family lives paycheck to paycheck in a modest house ($140,000) in the CEO of the corp I work for is bringing home 230 times what my husband and I combined bring home. Who is worth that much more than anyone else?
    I will say I'm just plain happy to have a job, even though retirement is a dream.

  32. xynzee Says:

    I was musing over this with a friend about how pollies justify that they should get paid a matzoh, because "in order to attract competent and motivated people to the positions you need to pay them accordingly, otherwise they'll just go into private industry".

    Yet when it comes to any other kind of job, then it's a complete about face.

  33. cromartie Says:

    Clinton's policies didn't do shit for people like me, and NAFTA kicked the bottom out of a large but utterly forgotten and ignored portion of the population – most of which I'm betting are the current suckers paying homage to the TeaTard faction of the GOP.

    They were called Reagan Democrats. They worked in the automotive industry in Detroit and, when the Negroes got uppity, fled to Macomb and Oakland County. They marched in lockstep to the Reagan and Bush drums in 1980.

    Now, they're stupid enough to pull the lever for Candace Miller, while wondering why their kids can't find work.

  34. NFoMan Says:

    "the CEO of the corp I work for is bringing home 230 times what my husband and I combined bring home. Who is worth that much more than anyone else?"

    Only those who also deserve to be shot, fucking narsistic psychopaths