Monday 12 September 2011

Inhumane approach to labour problems

It was a stirring speech. President Obama promised Americans he will help them get back to work. The government will give more support for the unemployed and teachers; it will rebuild decayed infrastructure; it will give tax cuts to employees and employers alike; it will tax the super-rich. I wanted to believe his every word. But could he pull the magic rabbit out of the hat? For his first three years in office, Mr. Obama neglected the problems of U.S. workers because he was badly advised. 

His economic team was led by people, notably Timothy Geithner and Lawrence Summers, focussed on banking; these advisers believed that restoring the fortunes of Wall Street was the key to creating jobs eventually. Recently Mr. Obama has brought in people more expert on labour issues, but they have to deal with deep-rooted rot in the jobs world. 

 
America calculates unemployment in a peculiar way. Its official statistics do not include under-employment, nor are people without work for more than six months counted. These are instead classed as discouraged workers non-government economists estimate their number at three to five million, and they are indeed discouraged, suffering from family crises, alcoholism and depression the longer they are unemployed. 

The U.S. remedy for their plight is similar to the idea behind Britain's big society leave it to churches, voluntary associations and the community to sort out the personal and family consequences of long-term unemployment. In practice, that means individuals are thrown back on themselves, since one real effect of the recession has been to beggar many of these civil-society


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