A Tragic Tale of Talent Squandered

Rare kudos to the Washington Post for this excellent and heartbreaking front page story on the plight on union carpenters in Las Vegas.  There is simply not nearly enough reporting of this kind from the front lines of our current economic devastation.  Right now there are simply thousands of these guys out of work in Vegas -- and hundreds of thousands across the country.  These are people with real skills and a high degree of training and craft pride and they are literally being left to rot by the wayside as the construction economy remains a basket case.

It's amazing how quickly and severely this turnaround occurred.  I remember not too long ago being in Vegas (a place I am in at least once a year -- I've probably been there 25-30 times over the years) and talking to a client during the ultra boom times and having hm complain to me that the demand for labor was so overwhelming that some of the more mediocre performers from local unions across America would find their way to him -- and that the ubiquitous presence of gambling, drinking, and whoring really made them even more desirable as workers.

Now guys with the best of skills and attitudes sit on the bench for months -- months that are stretching into years.  The results are appalling.  The article notes that in a span of a few months between November 2009 and February 2010, eight members of one of the Vegas Carpenters' local unions committed suicide.  

One complaint about the article is this analysis:

Exactly how much of the unemployment is "structural" is a matter of debate among economists. But it evokes deep concern because it is resistant to stimulus efforts and other quick policy measures.    

This strikes me as exactly wrong.  These guys have lost their jobs due to an enormous malfuction in the markets.  A stimulus devoted to using their skills via direct employment by the government on useful infrstructure programs -- desperately needed programs -- would actually be a highly socially useful way to combat their unemployment until the real estate economy snaps back. 

It won't happen because the Republicans would never allow it to happen, but this is not structural in the sense of a mismatch of skills to needs -- its structural in that the construction sector has been devastated by the finance industry.

As a result we are reduced to simply hoping for the best for them -- and so many of the rest of us.      

Comments

[Phil Perspective]

Sir Charles:
Exactly how much of the unemployment is "structural" is a matter of debate among economists. But it evokes deep concern because it is resistant to stimulus efforts and other quick policy measures.

This is wrong, as you know, because the stimulus wasn't big enough. And the right policy measures(like cramdown) were either not tried, or ignored. Bob Herbert has been beating this drum for months now. For a country that once prided itself on its can do spirit, we have turned into a country of do nothings.

P.S. I have changed my handle because I use this pretty much everywhere else.

[Emma]

It must be really hard for you, SC, to see this. We are so lucky in Australia -- our government was able to see the need, and head off the disaster, mainly by immediately implementing a program where every school in the country suddenly got the refurbishment, rebuild and new classrooms they'd been lacking during 12 years of conservative government. And I mean every school. My kids' public school had $3 million spent on it in a year -- new classrooms, full refurbishment, a huge covered area (which you need in Sydney in summer), landscaping, the lot. Every construction worker sacked by house building companies got a job with Building the Education Revolution (tm). It's been a godsend in small communities -- AND we got better schools out of it. They spent 16 billion dollars and it's made a difference.

[kathy a.]

wow, emma -- that's great.

SC, you are so right that there are tons of infrastructure projects that really need to be done. local and state governments cannot fund them, because they're all in the hole, but they need doing. and there are skilled people to do them, people who need work.

[oddjob]

The bubble of speculation that caused the hyper-growth in construction in Las Vegas was also caused by abuse in the finance industry. From a long term point of view it simply doesn't make sense to build such a large city in a climate that doesn't support civilization on that scale.

[low-tech cyclist]

I think it's important here to recognize that 'structural unemployment' has a particular meaning in economics. Per Wikipedia:

Structural unemployment is a form of unemployment resulting from a mismatch between the sufficiently skilled workers seeking employment and demand in the labor market. Even though the number of vacancies may be equal to, or greater than, the number of the unemployed, the unemployed workers may lack the skills needed for the jobs — or may not live in the part of the country or world where the jobs are available.

Structural unemployment is indeed resistant to stimulus. And while there's always some structural unemployment in the labor markets, that has nothing to do with why unemployment is at 9.8% today.

There is no mismatch going on here. There's no abundance of unfilled computer programmer jobs that are going unfilled because the unemployed are all steelworkers or pipefitters. And there's no abundance of unfilled job openings in one part of the country that are going unfilled because the workers are tied down by mortgages or other limitations to the less vibrant economy of the part of the country where they live.

There is simply an overall shortage of jobs. And that can be addressed by indirect stimulus means such as food stamps and unemployment benefit extensions, or more direct means such as infrastructure development and maintenance programs that would put people directly to work while creating needed public goods.

Our unemployment rate and the needs of our aging infrastructure are two problems that solve each other. Unfortunately, the GOP seeks only to reduce taxes on the rich, and gut the regulation of big business. That won't do a thing for an ailing economy whose overwhelming need isn't fewer regulations or lower taxes, but more customers.

But they want what they want, country be damned.

[oddjob]

But they want what they want, country be damned.

Because as everyone knows it's still November, 1980 and the heinous Jimmy Carter is still president!

(Rolls eyes.............)

[Sir Charles]

oddjob,

And as I pointed out sopme time back, job growth in the much maligned Carter era was actually better than job growth under Reagan, Clinton, and Bush I, to say nothing of Bush II, who presided over the worst job growth since Hoover -- tax cuts and deregulation notwithstanding.

Job growth under Carter was actually among the best in the last 80 years.

[Davis X. Machina]

If someone, anyone, but especially a politician or economist, addresses me and the first two words out of his mouth aren't 'aggregate demand', I just walk away.

If the next four aren't "marginal propensity to consume", I walk faster.

[Krubozumo Nyankoye]

So SC, I don't mean to sound cynical or be overly confrontational, but just exactly how did the tax cut deal that just got rammed through improve the overall situation for the futures of not only those unemployed carpenters, but the millions of others unemployed by the massive financial fraud of the past ten years?

In my view it improved their lot not a whit.

You responded to me in an earlier post that my reasoning was correct but that it was too complex for people to undertand or absorb. Perhaps you were right, perhaps not. The real question now appears to be how much punishment for the misdeeds of others will people suffer before they revolt?

[Sir Charles]

KN,

I think the tax deal, by being mildly stimulative, may be mildly helpful. I think right now economic strategy is largely based on trying not to step on those areas where there are signs of recovery and trying to create a bit of a wealth effect through the quantitative easing program. It's a bit hope based and certainly not what I would propose if I had my way. But it's essentially what the administration is left with.

When will people revolt? Never.

At least not in a fashion that helps their plight. At the moment there are no particular signs of non-unionized working class white people -- especially men --assessing their situation in any kind of analytical way that will lead to a more progressive politics. Although I certainly think we need to keep trying to reach this cohort, I have little hope of being able to do so in a meaningful way.

[oddjob]

Indeed:

...Conservative Democrats are ultimately a bigger threat to Obama's reelection prospects than liberal ones. ... It's not a pleasant reality, but in our two party system that's just the way it goes- conservatives definitely have more leverage than liberals within the Democratic coalition and that's why they so often get their way despite their smaller numbers.

[Stephen]

oddjob,

I've said several times that we have a party in power in DC, and that's the Democrats. Then we have the opposition party, and that's also the Democrats. Then there's the screaming ninny party, whose sole platform plank is to gain power and money by wrecking our political system, the country, even the world if that's what it takes.

[oddjob]

The shape of things to come?

[Krubozumo Nyankoye]

SC, You are quite right that people cannot revolt in a fashion that helps their plight. But I think never is a bit too optimisitic. After all it has happened once before. Furthermore, once revolt has occurred, other things start to come into play, some good and some not so good. Frankly I am hoping I don't live to see it, but given the trends, greed may well preclude my wishes. Yes, even people who should by rights be well informed can be induced to act against their own interests.

Oddjob and Stephen, well, yes emphatically. Our government in generous terms is dysfunctional, in more cynical terms it is bought and paid for.

So I ask this, by virtue of the fact that we are here discussing these matters without any noticable interferance from the right wingnuts, what can we do that will make any difference in the outcome of the struggle as it continues?

Appeals to sanity don't appear to make much difference. What will?

[Sir Charles]

KN,

I am not really sure what will make a difference. I think we need to be able to think both tactically and strategically so that we are able to prevail in enough short term battles to give us the breathing space necessary to create a winning progressive coalition.

But it is not an easy task. One looks at the grip that the corporate world view has on the Democratic Party -- and I don't mean to engage in cheap populism here, but the Peter Orzsag hiring by Citibank is a highly illustrative example. Too many of our top people feel right at home in the board rooms of rapacious corporate capitalism. This is to me a profoundly difficult structural problem to overcome -- the successful people at the forefront of much of our public policy work feel entitled to these kinds of material rewards and thus identify with forces tht really should be shunned or treated with suspicion and hostility.

[Krubozumo Nyankoye]

Perhaps it is true that anyone can be bought if the price is high enough. I can't really relate to the board rooms to which you refer, but I can relate to being both pressured and tempted to attest things that I knew to be false.

I think the corporate world view has a grip on everything, not just both parties. Perhaps those "successful people" you mention should not then be at the forefront? Sadly that is probably self evident but does not speak at all to the problem of how then to identify people who are sincere enough and honest enough to be public servants but who can't be bought. That does not address the fact that though they might not be bought, they can of course be broken.

I am not really suffering in any particular way so I even wonder about myself somethings, whether I have been in some respect already "bought" and on the cheap at that. Perhaps I should have studied law instead of geology. But then again, the perspectives of geology are useful. We tend to think in terms of things on scales that most people find unimaginable. Both in terms of space and time. We also tend to think in terms of such esoterica as how a particular strain ellipsoid can result in either slow deformation or sudden rupture. Most of all of course we have the advantage of realizing in fundamental ways, how tenuous and delicate is this human mindset. (This "we" I speak of is geologists in general though surely not all would agree with me.)

To me it is sometimes almost laughable we humans are about our stature in the biosphere. While it is possible that our intelligence, which has so far served us fairly well, may discover a few ways to extend our present hegemony (highly qualified), there are myriad ways most of which cannot be foreseen at all, in which our uniqueness could drive us to extinction.

I know, I have rather extravagently expanded the scope of this conversation from a fairly narrow political context to the much broader and perhaps ridiculous context of - well - everything that matters. But in some sense that is exactly where we actually are. One of the things that is so disturbing about the fact of AGW is that anyone could trivialize it. On the purely biological front we have similar warnings, AIDS is a disease that literally attacks our highly evolved immune system which is the first line of defense against all forms of disease. The next viral adaptation may be utterly inscrutable.

Yes, it is complex. I am not at all sure there is any way to avoid addressing that fact.