Sunday's New York Times headlined a front page story on long-term joblessness, "Millions of Unemployed Face Years Without Jobs."
Reading the now-depressingly familiar story of decent Americans struggling to avoid homelessness, I was struck by this quote:
"American business is about maximizing shareholder value," said Allen Sinai, chief global economist at the research firm Decision Economics. "You basically don't want workers. You hire less, and you try to find capital equipment to replace them."
If the economy is going to recover, that attitude is going to have to change. Because you can't "maximize shareholder value" forever if your business has no customers. If you serve only the market and the market erases employment, who is going to buy what you are selling? This position is unsustainable--even if you export to other countries, mass unemployment will make America unlivable.
Of course, there are plenty of countries in which a tiny elite sits anxiously above a mass of desperate, impoverished people, countries without a middle class. Places with extremes of economic inequality like Haiti, Sierra Leone, Chad, North Korea, Iraq, Afghanistan, Rwanda and Saudi Arabia. Not countries that America has typically aspired to be like--and the correlation between extremes of inequality and war, chaos, violence and lack of economic growth are not coincidental.
Indeed, the countries with the least economic inequality--the top-ranked tend to be Scandinavian countries like Norway, Sweden and Denmark--are also the countries with the highest reported happiness, the longest life expectancies, and the lowest rates of crime and infant mortality.
Why does inequality have such a huge impact? In Born for Love, we trace the links back to care and trust--the more people care about and trust their fellow citizens, the greater concern they have for their health and welfare and the more social services they tend to provide. The more trust people have in one another, the easier and cheaper it is to do business: if you can do a deal with a handshake, you need fewer lawyers and can move faster; if you can trust that people won't steal, you need fewer guards and police.
If you can trust others, you are also likely to be healthier--the more connected people are and the safer they feel, the more creative they can be and the less stressful their lives are. Less stress means lower rates of heart disease, high blood pressure, obesity, diabetes.
This means, that to recover, the American economy needs more trust and caring--we need to be more empathetic towards fellow citizens and provide a better safety net for those who are hurting. Or, we can continue to "maximize shareholder value" for the elite and watch the country spiral downwards as we trust each other less, spend more time policing ourselves and are too terrified and afraid of change to consider that without jobs, there can't be economic growth.
[Cross-posted from the Born for Love blog on Psychology Today]