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Robert Kuttner

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Steve Jobs and American Jobs

Posted: 03/11/2012 10:20 pm

The economy added another 227,000 jobs in February, the Labor Department reported Friday. That's good news, sort of. It means that the recovery is slowly progressing. At this rate, we will be back to pre-recession employment levels sometime around 2018.

However, this growth in jobs was not enough for wages to keep place with inflation; nor did the unemployment rate drop, but stayed stuck at 8.3 percent. Why? Because folks who had given up have started entering the labor force again, but the percentage of people in the labor force is still two points lower than it was before the recession began. A new study by the Economic Policy Institute reports that earnings declined over the past decade even for college graduates -- so much for the education cure.

In short, the recession made a bad problem worse, but the economy on the eve of the recession was nothing to be proud of. Throughout the first decade of the new century, before the recession hit, wages lagged behind living costs for the vast majority of Americans -- because those in the top one percent were capturing such a large share of the economy's total productivity gains.

Some of this trend was the result of globalization undercutting the bargaining power of U.S. workers; some of it resulted from weakened trade unions and minimum wage laws lagging behind inflation.

Flat or declining wages did not result from declining average productivity. So when we finally climb out of this jobs recession, perhaps we can belatedly confront these deeper trends.

I have been writing about the hotel workers union in New York City.

Thanks to an extraordinarily effective union, Local 6 of the hotel and restaurant workers union, nearly every large hotel in Manhattan is unionized, and everyone who works in these hotels, from dishwashers to room cleaners to doormen to banquet waiters earns a middle class wage. The union recently signed a seven year contract giving workers a 27 percent wage.

Local 6 is an exceptionally effective union, and New York is a unique tourist destination. But since the vast majority of jobs in America will soon be service sector jobs, not vulnerable to global competition, there is no good economic reason why they can't all be middle class jobs. The challenge is political. We as a society simply need to decide, as President Obama famously told "Joe the Plumber," that we want to "spread the wealth around" rather than having it concentrate at the very top. All service jobs could pay a living wage. How to do that? Unions, wage regulation, progressive taxation, and government using existing powers over contractors that it seldom exercises.

But what about manufacturing? This brings me to the other Jobs of my title, the late Steve Jobs.

The New York Times, in a two part series earlier this year on Apple's Chinese contractor, Foxconn, finally made front page news and added some telling detail to what was already fairly well known. The cool, must-have iPads, iPhones, and iPods to which we are increasingly addicted are manufactured with brutal sweatshop labor in Shenzhen, China, where 230,000 employees are making an average of less than $2 an hour work in a single factory complex. Foxconn's dormitories now have nets outside to prevent suicides.

I recently saw a one-man show, Mike Daisey's amazing "The Agony and the Ecstasy of Steve Jobs," in which Daisey, a spellbinding monologue artist, recounts his own conversations with the workers of Foxconn in Shenzhen.

Daisey was on to Foxconn long before the Times. If you get a chance to see this show, which runs for one more week at New York's Public Theater and which will be on tour in Washington, D.C. and elsewhere later this year, don't miss it. Two weeks ago, Daisey made the stunning decision to put his script in the public domain, so that other performances could go viral.

Daisey wonders out loud: what if everyone who buys these products began upping the pressure on Apple to do right by its workers?

I would add: What if Apple made a decision to bring this work home, and to pay decent wages for it, say $20 an hour. Right now, this is literally impossible, because the production facilities to make such products no longer exist in the United States. But the Pentagon has insisted that America hang on to production capacity for certain other sensitive micro-electronics products. And if hostilities escalated between the U.S. and Beijing, you can bet that we would see a crash program to restore more micro-electronics output at home.

Apple earns about $600,000 per year per employee. It can well afford to share a little more of that with its workers.

The New York Times calculated that it would add only about $65 to the cost of an iPad or iPhone to produce it at home at good wages. And over time, it would tend to cost less, since higher-paid workers lead the company to redouble its investment in automation.

Apple can certainly afford this transition. It is now the richest company in the world, sitting on a pile of nearly a hundred billion dollars in cash. If Apple led, it would become bad form for America's other prestigious companies to manufacture for U.S. markets in foreign sweatshops.

Ralph Nader recently published the most improbable of books, a novel titled Only the Super-Rich Can Save Us. Nader, looking at the grotesque economic and political power imbalance in the U.S., imagined that a cabal of billionaires led by Warren Buffet and Ted Turner have an outbreak of conscience and become crusaders for progressive reform. It's Nader's way of both laying out a reform agenda and spotlighting where the real power lies.

It's a lovely fantasy, but it's not going to happen -- any more than Apple, out of the goodness of its corporate heart, is about to decide to phase out its high-tech Asian sweatshops in favor of decently compensated production jobs in the United States.

But what could perhaps happen is a mass movement of Apple consumers, declaring that it's not cool to treat the people who build these products like beasts of burden or like expendable non-human parts.

Alternatively, as incomes keep falling further behind the cost of living for most Americans, we can comfort ourselves with the thought that we enjoy the coolest of gadgets and that others are even poorer than we are.

Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.