Every Month a CPEG member will be posting a brief issue analysis for discussion and comments. This month, CPEG member Sharon Post has chosen to discuss the impact of health care employment on job creation and income inequality.
In 2009 CPEG released a paper calling for a massive public jobs program aimed at both relieving immediate suffering and redressing long-standing structural problems in the U.S. economy. We raised two often overlooked problems: (1) the inability of the private sector to create sufficient jobs at adequate wages and (2) the existing labor market’s reproduction of inequalities that have left the lower 40% income strata desperate and miserable. In light of those points, this discussion paper attempts to add to that earlier analysis some questions about employment in the health care sector. Given the importance of health care sector employment, especially in low-income communities where the hospital is the largest employer, this paper looks specifically at hospital employment and asks:
- What does it mean for job creation and income inequality that so many hospital jobs are low-wage jobs?
- What will changes in the health care delivery system, stimulated by the ACA and other reforms, mean specifically for the low-wage hospital workforce?
- Can a jobs program such as the one CPEG has proposed take on both the need for good jobs and the need for better health access in low-income communities?
On April 24th two groups of young people met up on Chicago’s Magnificent Mile, and it wasn’t for the shopping. One group was striking retail and fast food workers who had walked off the job to protest low wages and demand a $15 minimum wage for downtown workers. The other group was students protesting Mayor Rahm Emmanuel’s school closings. Many of the striking workers were only a few years older than the students. Inequitable education policies like those of the Chicago Public Schools fall most heavily on low-income communities. The experience of dictates from above disrupting neighborhoods—closing schools, firing school staff, reducing education to performance on high stakes testing–with no voice from those affected doesn’t produce schools encourage low-income students to assert themselves and demand a better life for themselves and their families. Last Wednesday the youth of Chicago taught us what we should already know, the economy is not working for most people in the U.S.
Today’s jobs report underscores the weakness of the economy’s crawl out of the depths of the “Lesser Depression” (LD), once again demonstrating that relying on private sector growth, even with massive and unprecedented Fed blowing up of a renewed financial sector and stock market bubble, is not going to set the U.S. economy on a path to broad based and sustainable prosperity, as CPEG has been saying for many years.
The “Current Employment Statistics” (CES) “Establishment” survey shows that non-farm payroll jobs expanded by only 88,000 in March far below economists expectations of 200,000 and well below the average 197,000 payroll job growth of the last 6 months (Sept. through Feb). Though this a one month number and there have been one month “summer declines” in job growth throughout this tepid expansion (in June-Sept. of 2010, July of 2011 and June of 2012), this is a striking decline after six months of steady (though far from adequate) growth that does not bode well.
Every Month a CPEG member will be posting a selected economics article for discussion and comments. This month, CPEG member Mel Rothenberg has chosen the 2009 article “America’s Exhausted Paradigm” by Thomas Palley, available for reading here.
This report traces the roots of the current financial crisis to a faulty U.S. macroeconomic paradigm. One flaw in this paradigm was the neo-liberal growth model adopted after 1980 that relied on debt and asset price inflation to drive demand. A second flaw was the model of U.S. engagement with the global economy that created a triple economic hemorrhage of spending on imports, manufacturing job losses, and off-shoring of investment. Deregulation and financial excess are important parts of the story, but they are not the ultimate cause of the crisis. Instead, they facilitated the housing bubble and are actually part of the neo-liberal model, their function being to fuel demand growth based on debt and asset price inflation. The old post–World War II growth model based on rising middle-class incomes has been dismantled, while the new neo- liberal growth model has imploded. The United States needs a new economic paradigm and a new growth model, but as yet this challenge has received little attention from policymakers or economists.