My continuing reflections on the essay by Piketty et al. have elicited a number of interesting and suggestive responses, including those of S. Wallerstein and Jerry Fresia. Rather than respond to their comments, with which I largely agree, I should like to add to the discussion by going into several matters that may help us to advance our thinking about the present situation. By the way, I am well aware that major developments are unfolding in many parts of the world, including China, India, and a number of European nations, but I simply do not know enough about these matters to form or to express intelligent opinions. My silence is not at all a judgment on their significance, simply a consequence of my ignorance.
First of all, let us keep in mind that there are three elementary facts about any society that, more than anything else, determine its economic and political trajectory. The first is the proportion of the working age population in agriculture. The second is the proportion of the total population of working age. The third is the rate of growth of the population. The first determines how many people of working age are freed up to engage in manufacture or services or other productive activities. The second determines how heavy the burden is on the working age population of supporting the non-working age share of the population in addition to supporting itself. The third determines [or at least shapes] the rate of social saving required to expand the total output to accommodate the additional people.
The so-called Neolithic Revolution took humanity from a hunting/gathering or foraging stage of existence, by means of the invention of agriculture and the domestication of animals, into a productive stage that freed up people to build cities, form governments, muster armies, fight large scale wars, build places of worship, and also, most important of all, write philosophy books.
The Industrial Revolution dramatically reduced the share of the population engaged in agriculture and ushered in the world in which virtually everyone on earth lives. In my view, far and away the most consequential revolutionary change of the past half century has been the transformation of China and India [and other smaller nations] from primarily agricultural to primarily industrial or post-industrial economies.
This interactive chart shows the percentage of the population of working age, by country, over the past forty-eight years. The United States is in the middle of the pack with Korea at the top and Israel at the bottom. The working age share of the U. S. population has risen and fallen between 62% and 66% [roughly] over that time.
The next thing we need to know is the proportion of the working age population in the labor force. This requires some explanation, as it is not obvious what that means. [In my multi-part tutorial, entitled “The Study of Society,” accessible via the box.net link at the top of this blog, I talk for a bit about how this notion changes for pre-capitalist, capitalist, and socialist societies.]
The U. S. Bureau of Labor Statistics [BLS], as you probably know, keeps track of monthly and yearly changes in the unemployment rate, defined simply as the proportion of the population in the labor force that is not employed full time. To determine this, it selects a carefully crafted sample of 50,000 households, and sends people out each month to ask of the working age people in each household, “How many working age persons are there in this household, and of those, how many were employed full time last month?” According to this chart, 73.3% of America’s working age population is in the labor force. [Once again, the U. S. is more or less in the middle range among nations in this regards]
Now the BLS is well aware that there are people who would like to work but have given up looking because they cannot find jobs. It dubs these folks “discouraged workers,” and it keeps track of them by asking, in its monthly surveys, “Have you looked for work in the previous twelve months.”
Needless to say, in every conceivable category, things are worse for African-American and Hispanic workers.
Why does all of this matter? Because the people not in the labor force are people, as are the unemployed and the discouraged workers, and they are mostly part of what I have been calling the Bottom Half. [Obviously, wives of rich men are not, but an ever larger proportion of working age women are in the labor force, and as you would expect, they are disproportionately at the lower end of the income spectrum.] If we are trying to think through policies designed to alter the steeply unequal [and unjust] shape of the income distribution, we need to figure out how to bring more working age unemployed men and women into the labor force and prepare them for and offer them decent jobs. This is not the same thing as lowering the official unemployment rate, which is currently at a multi-decade low.
Mind you, I do not have viable, politically feasible proposals in my back pocket, but I think it helps to set the scene in this way for our thinking, so that we can move beyond the usual proposals, admirable as they may be.
I will close by saying that I agree both with S. Wallerstein that it will be extremely difficult to build solidarity between those in the Bottom Half and those in the 50/90 range, and with Jerry Fresia that we must look at the bipartisan corporate neo-liberal consensus on which America’s party politics have rested since Carter [I would have said “since Reagan,” but there is only a few years’ difference there, and I bow to his superior memory.]