The Insecure Economy and our State of Health

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During the current Coronavirus crisis, those who are hardest hit are the low-wage temporary and gig workers who don’t have paid sick leaves. The job insecurity of these workers translates directly into a huge health risk to the rest of the population. It is time for us to take stock and understand how our economy has undergone fundamental changes in the last four decades. We do not arrive at this stage due to some accident. Rather, the structural change in our economy is carefully engineered by capitalists and their consultants to squeeze the last drop of productivity out of the workers and transfer a substantial part of business risk to them.

We can understand this by listening to this speech by Alan Greenspan, the ex-chair of the Federal Reserve Bank, dated October 12, 2005. Here Greenspan gloated about the resilience of the American economy and its ability to absorb shocks. Then, he justified the capitalists’ subtle transfer of business risk to the workers in the name of competitiveness and economic flexibility:

Flexibility is most readily achieved by fostering an environment of maximum competition. A key element in creating this environment is flexible labor markets. Many working people, regrettably, equate labor market flexibility with job insecurity.

Despite that perception, flexible labor policies appear to promote job creation, not destroy it. An increased capacity of management to discharge workers without excessive cost, for example, apparently increases companies’ willingness to hire without fear of unremediable mistakes. The net effect, to the surprise of most, has been what appears to be a decline in the structural unemployment rate in the United States.

Alan Greenspan did not explain why the ceding of economic flexibility from the workers to the capitalists and business owners does not create job insecurity. Of course, business owners and capitalists want maximum flexibility. Certainly, economic flexibility has tremendous business value. But, in this context, it is a gain for the capitalists and a loss for the workers. Traditionally, the business owner holds the bulk of the risk of business uncertainty. This is one reason why the capitalists enjoy the lion share of the profits in the first place. In late-stage capitalism, however, even many of the risks involved in operating a business is transferred to the workers. In my father’s generation, it was rare to terminate a worker’s employment without cause. My father worked for the same bank all his life. Yet, in our current business environment, employers have demanded flexibility from their workers — by creating temporary jobs, on-call jobs and gig assignments — without giving the workers anything in return to compensate. In fact, real wages have remained stagnant, even declined, while CEO pay has skyrocketed. As of 2018, the average pay of an American CEO was almost 300 times that of an average worker. In contrast, the average Japanese CEO pay is only one sixth of that of its American counterpart.

Needless to say, rampant job insecurity had led to widespread economic anxiety among the working class. And when disaster hits, the lack of job security and health benefits of many service-sector workers translates into tremendous hardship for the workers’ families and an enormous public health risk in case of a pandemic. According to scientist prediction, we can expect more and more pandemics in the future. The Coronavirus is most likely not the last one to hit our modern world.

The time to act is now. Job security and public health go together. Clearly, we cannot rely on the market or the capitalists to do the right thing. The first thing we need to do is to implement a comprehensive universal healthcare plan for all. It is also time to put a ceiling on the ratio between CEO pay and average worker pay. As Mahatma Gandhi said, “The world is big enough to satisfy everyone’s needs, but will always be too small to satisfy everyone’s greed.” Let not the greed of a small group of people doom us all!

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