Face Up to Permanent Joblessness : Employers need fewer workers, retrained or not.

Anyone sitting here in the United States--in Detroit, for example--and thinking about jobs would do well to look eastward to Europe and then south to Chiapas. There’s the future writ large.

In Germany, we find all the elements in place for what the Clinton Administration, notably Labor Secretary Robert Reich, deems to be the recipe for good jobs at high wages: training or retraining to produce highly skilled and productive workers. Germany has plenty of training schemes, a skilled work force and a stagnant economy with high rates of unemployment. The Reich equation between training, productivity and employment simply isn’t working. At the turn of the year, Germany’s official unemployment rate was over 10%.

There is an alternative model to the one proffered by Reich, and it has been around considerably longer. Developed by Karl Marx, it’s called the reserve army of the unemployed. Unemployed labor in a capitalist economy acts as the employers’ bludgeon held over workers asking for better pay, job security or benefits. There’s someone around who will work for less.

Across the past decade, the reserve army has been swelling as companies in search of higher productivity ruthlessly prune workers and export jobs to cut costs. Technology has extorted an additional toll.

This carnage is applauded vigorously by apostles of market magic; later, there’s a macabre irony in finding these same apostles waking up to the fact that more people living on the dole means fewer people buying goods.

“In the aggregate, companies have been firing their customers,” Eric Greenburg, of American Management Associations recently told the magazine Global Finance.

In the same article, David Roche, who works for the investment banking firm Morgan Stanley in London, marries Marx to John Maynard Keynes when he says, “Investors love long dole queues as long as they’re reducing costs and not damaging demand. But eventually there is a certain length of a dole queue which causes a reversal of this perception.”

High unemployment rates and stagnant wages precipitate declines in consumption and thus usher in deflation, as Keynes pointed out 60 years ago.

Keynes didn’t live to see the advent of the global economy, which renders moot his strategies for reflation and full employment in the industrialized countries. There are 4 billion new skilled workers in China, India and Brazil prepared to do the same job as European or North American workers, at 10% of the price.

Businessmen ruthlessly following market rules sometimes have a clear notion of where their ruthlessness is leading. Percy Barnevik, a Swede who heads ABB, the world’s largest power-engineering group, runs a transnational enterprise that operates freely across borders and, in the admiring words of the London Financial Times, “is at home in all the 140 countries in which it operates, yet owes fealty to none.”

Between 1988 and 1992, ABB shed 50,000 jobs while increasing sales by 60%, to $28.8 billion.

Barnevik predicted last year that the proportion of Europe’s labor force employed in manufacturing and business services will fall from 35% to 25% by the end of the century and to 15% a decade further on.

“Where will all those people go? Out they will go, because we don’t need them,” Barnevik told the Financial Times. “If anybody tells me, wait two or three years and there will be a hell of a demand for labor, I say, tell me where. What jobs? In what cities? What companies? . . . We end up with permanent unemployment or underemployment, or with two classes of differently paid people. Both are social dynamite.”

Which brings us to Chiapas. The Indians in Chiapas rose up on New Year’s Day because they faced economic extinction, what they called the “death sentence” of cheap corn imports from the United States and Canada permitted under the North American Free Trade Agreement.

So, was that rising the last of old-style Latin America guerrilla movements, or was it an augury of the new fissures opening up in the global economy?

Those strategists of new employment in Detroit and elsewhere had better think big, about shortened work weeks, about a social wage, about the coming permanent absence of jobs. Job, by the way, is defined in the larger Oxford English Dictionary as being of “unascertained origin” and only “a small, definite piece of work” that doesn’t last long.

Retraining isn’t going to do it, as the capitalists for whom Reich works know. The real strategy is prison construction to provide a few jobs penning in the ever-growing desperate and dangerous classes.