Deputy Treasury Secretary Robert Kimmitt: 'Job insecurity is a beautiful thing!'

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Quick! Hide the children. Here comes a member of Bush's economic team -- Deputy Treasury Secretary Robert Kimmitt -- to tell us why a little bit of pain is a really good thing …

More than 55 million Americans, or four out of every 10 workers, left their jobs in 2005. And this is good news, because there were over 57 million new hires that same year.

These statistics illustrate a recent and growing trend of dynamism in our job market, especially among younger workers. Data on labor demand in the United States, gathered for the Job Openings and Labor Turnover Survey (JOLTS), show that the 12 months ending in November had the highest average of labor turnover since the U.S. government began tracking this information in 2000. But the data also show that our economy has maintained a consistently strong ratio of new hires to separations. Over the year ending in November, new hires in America exceeded employee separations by an average of 364,000 per month.

Indeed, the data show that each month millions of Americans leave their jobs -- most of them voluntarily -- and millions more are hired. This is what we want: an economy in which people looking to move up have as many opportunities as possible from which to choose. Promoting this dynamism, and the opportunities it creates, should be a focus of our economic policy.

This flexibility of our job market is one key reason the United States successfully competes in an increasingly interconnected global economy. In fact, our workers lead the international marketplace in this trend. Job tenure averages 6.6 years for Americans, compared with an average of 8.2 years for Britons, 10.6 years for Germans, 11.2 years for the French and 12.2 years for the Japanese. Even more striking is that, on average, workers in the United States will have 10 different employers between ages 18 and 38.

This dynamism of our labor force strengthens the U.S. economy because each move to a new employer can involve greater responsibility, greater pay or both.

Oh, how wonderful. Unfortunately, it doesn't always work that way -- America's vaunted upward mobility is largely a myth. A study by the Economic Policy Institute (PDF) looked at economic mobility and concluded that "for most people in America today, where you end up is increasingly a function of where you started out."

A study (abstract) by British economist Andrew Benito found that when you increase job insecurity, you decrease household consumption -- that is, people buy less stuff. And while Kimmitt devotes quite a bit of column space to the wonders of the modern American economy -- sky-high stock prices, low unemployment, ect. -- data out in the past few weeks shows that income inequality is reaching "unprecedented levels." There's growth, but most aren't sharing in the prosperity.

Oh, look out -- here comes a handy graph! This shows how the wealth ratio of those in the top 1% to the family right smack in the middle has changed over the past 40 years, exactly as the workforce has become so "flexible" (from EPI):

Of course, when you hear "labor flexibility," what they're really talking about is investor and employer flexibility -- as I've written before, American workers have less flexibility than those in any other industrialized country in terms of things like maternity leave or taking time to deal with an illness in the family.

Here's what the worst kind of flexible workforce looks like:

The nation's biggest private employer is about to revamp the way it schedules its work force, in a move that could shake up many employees' lives.

Early this year, Wal-Mart Stores Inc., using a new computerized scheduling system, will start moving many of its 1.3 million workers from predictable shifts to a system based on the number of customers in stores at any given time. The move promises greater productivity and customer satisfaction for the huge retailer but could be a major headache for employees.

Others that have rolled out advanced scheduling systems in the past year or are currently doing so include Payless ShoeSource Inc., RadioShack Corp. and Mervyns LLC. Payless expects to have its system in 300 of 4,000 stores by the end of January.

But while the new systems are expected to benefit both retailers and customers, some experts say they can saddle workers with unpredictable schedules. In some cases, they may be asked to be "on call" to meet customer surges, or sent home because of a lull, resulting in less pay. The new systems also alert managers when a worker is approaching full-time status or overtime, which would require higher wages and benefits, so they can scale back that person's schedule.

That means workers may not know when or if they will need a babysitter or whether they will work enough hours to pay that month's bills. Rather than work three eight-hour days, someone might now be plugged into six four-hour days, mornings one week and evenings the next.

Here are a few other things to consider when some bloodless economic android like Kimmitt starts talking about our "dynamic" and "flexible" workforce …

* Economist Diane Galarneau: "Temporary work accounted for almost one-fifth of overall growth in paid employment between 1997 and 2003 despite a period of economic growth and favourable employment conditions… Between 1997 and 2003, [the pay gap between full-time workers and temps] ranged from 16% less per hour to 19% less per hour."

* Economist Doug Henwood: "A worker paid the average manufacturing wage would have had to work sixty-two weeks to earn the median family's income in 1947. In 1973, it would have taken seventy-four weeks; in 2001, eighty-one weeks. So, despite the fact that productivity overall is up more than threefold over the last fifty years, the average worker would have to toil six months longer to make the average family income than he or she did half a century earlier."

* University of Michigan study: "Amid growing news of layoffs, outsourcing, corporate bankruptcies and downsizing, a University of Michigan study finds that feeling insecure about your job takes a toll on physical and mental health--whether you actually lose your job or not. "In fact, the health effects of job insecurity are at least as great as the health effects of a serious or life-threatening illness."

* Harvard Medical school study: "After following almost 37,000 nurses during a period of hospital consolidation and reorganization, the study showed that women who sensed that their job was insecure faced an almost two-fold increased risk of non-fatal heart attack…'The evidence already exists to link unemployment with health problems such as immune system dysfunction, depression, suicide and death,' said lead researcher Sunmin Lee, ScD of BWH. 'Our study demonstrates that in addition to actually being laid off, job insecurity may also threaten one's health.'"

Let me add that when people switch jobs often, or are employed as contract- or temporary-workers, they're much less likely to get benefits, which often require a certain amount of employment time to kick in.

From EPI's State of Working America (PDF):

* Coverage by employer-provided health insurance has declined from 69.0% in 1979to 61.5% in 1989 and down to 55.9% in 2004 (the latest data available). Those who still receive employer-provided coverage are now paying a larger share of those insurance costs. Employees paid for half of the growth of employer-provided health insurance premiums over the 1992 to 2005 period.

* Over the entire 1979-2004 period, pension coverage declined primarily among men, from 56.9% to 46.4%. Women's pension coverage, on the other hand, rose slightly, from 41.3% to 44.3%.

* Lower-wage workers are very unlikely to have jobs with employer-provided pension plans (14.3% were covered in 2004), and less than half of middle-wage workers have pension coverage.

* Pension plans have declined in quality as fewer workers are covered by defined benefit plans (which guarantee a fixed payment each year after retirement) and many more are covered by defined contribution plans (which only guarantee a certain contribution). For instance, in 1980 39% of workers had a DB plan, a share which fell to 19% by 2003 (latest data). However, the share of workers in DC plans (but not also a DB plan) rose from 8% to 31% in the period from 1980 to 2003.

* In 2005, 36.5% of temporary workers and 24.7% of part-time workers were uninsured, while 13.5% of standard (full-time, regular) workers were uninsured.

All of that is the other side of the "dynamic workforce" over which these guys gush. Sorry for dumping so much data on you, but A) I'm a big nerd and, B) I think it shows just how wrong -- and dishonest -- all those Kimmitt-like creatures really are.

PS: To understand all of these trends let me recommend, not for the first time, Jacob Hacker's excellent book, The Great Risk Shift.

Joshua Holland is a staff writer at Alternet and a regular contributor to The Gadflyer.

[almaty 19]

he is a certifed chopf##k in my book...and a snapperhead to boot