| Richard Sennett | Comment is free | The Guardian
It was a stirring speech. President Obama promised Americans he will help them get back to work. The government will give more support for the unemployed and teachers; it will rebuild the country's decayed infrastructure; it will give tax cuts to employees and employers alike; it will tax the super-rich. It's the business of politicians to offer hope, and I wanted to believe his every word. But could he pull the magic rabbit out of the hat?
For his first three years in office, Obama neglected the problems of US workers, not because he was mean-spirited but because he was badly advised. His economic team was led by people, notably Timothy Geithner and Lawrence Summers, focused on banking and finance; these advisers believed that restoring the fortunes of Wall Street was the key to creating jobs – eventually. The labour minister, Hilda Solis, is an excellent public servant, but she has had little influence. Recently Obama has brought in people who are more expert on labour issues, but they have to deal with deep-rooted rot in the jobs world.
Most of the president's listeners are only too aware that too many people are chasing too few jobs, especially good jobs. The recession hasn't caused this depressing fact. For over a generation, financial prosperity in Europe as in the US has not depended on a robust labour force at home; the work that global corporations need can be done cheaper and often better elsewhere.
Again, the digital revolution is finally realising an old nightmare – that machines can reduce the need for human labour; by 2006 this "replacement effect" already stood at 7% annually in the service sector. And the viability of an old-fashioned career was long over before the recession began; lifetime service to a corporation is a thing of the past. The result of all these changes is that western workers have known insecurity and the spectre of uselessness for a long time.
Obama didn't address these structural problems in his speech. How could he? These are the hard facts of modern capitalism, and the president's enemies have long accused him of being a closet socialist. Obama has instead always rightly described himself as a centrist. For this reason he faces the same dilemma as David Cameron in centrist mode: both are trying to trim government while stimulating the economy. The $447bn Obama promises to spend sounds like a lot, but there's much less actual cash being put immediately on the table; tax cuts are meant to do the heavy-lifting in job creation.
Such "cost-effective" measures don't do much to deal with the sheer scale of labour problems. Investing in construction projects achieves a big bang for the buck, and is great for skilled construction workers. But in both Britain and the US, unemployment among unskilled young people hovers at about 22%; it requires a great deal of money and remedial expertise to make them competitive in the job market. The number of people suffering from involuntary under-employment [those who formerly worked full-time now doing a single, part-time job] now stands at about 14% in both countries, workers whose wealth dramatically declines when they work less. They need income support, but this too requires lots of government cash. Neither government has thought much about how to deal with these dead-end, nor thought hard enough about automation.
America calculates unemployment in a peculiar way. Its official statistics do not include under-employment, nor are people without work for more than six months counted. These are instead classed as "discouraged workers"; non-government economists estimate their number at 3 to 5 million, and they are indeed discouraged, suffering from family crises, alcoholism and depression the longer they are unemployed.
The US remedy for their plight is similar to the idea behind Britain's "big society": leave it to churches, voluntary associations and "the community" to sort out the personal and family consequences of long-term unemployment. In practice, that means individuals are thrown back on themselves, since one real effect of the recession has been to beggar many of these civil-society institutions. Familiar as this issue is to Britons, it's only beginning to dawn on US officials that civil society is not rich.
The "special relationship" has a perverse twist in the realm of labour; our two societies harbour large numbers of insecure or vulnerable employees whose ills have been addressed timidly by centrist governments. There are real solutions, however, to the travails of work; they are found along Europe's northern rim – in Scandinavia, Germany and the Netherlands. These more balanced economies have avoided Anglo-American, finance-driven capitalism; their governments have protected established companies, especially small companies, providing capital for growth when banks won't lend it. On this stabilising base, Norway and Sweden have made concerted efforts to include young people in starter jobs; their youth unemployment stands at about 8%. The Germans put big resources into youth training schemes; the Dutch effectively supplement the wages of part-time employees. Factories in Europe's northern rim have long explored how to deal humanely with automation, and tried in many different ways to counteract the outsourcing of jobs. Existential Gloom may well be inherent in the northern temperament, but these prosperous countries have in everyday practical life proved good at shaping labour. Why don't we learn from them?
The Anglo-American elite deploys a "big beast" defence against acting like northern Europeans: in Norway there is no City of London, no Apple or Apple. Which produces a paradox: our big beasts think small about work and its discontents. Perhaps it's true that the US economy is so global and so complex that little can be done to remedy its ills at home. But Britain is about the same size as Germany and its cultural DNA is northern European.
Much as I admire Obama personally, I couldn't help thinking after his speech that time has run out for him.Though he's too adult to promise the public instant Nirvana, he thinks his reforms will have a real effect during the 14 months before the election. But if the past is any guide, it takes about three years for government-stimulus measures to bite in the US economy; if Obama's proposals for public works and tax were enacted tomorrow, their modest effects would be felt during the time of President Perry. This time-lag more generally holds: In Britain, the decay of public institutions caused by today's big society will be Prime Minister Miliband's problem. To short-circuit that cursed inheritance, in Britain we need to start thinking big and acting decisively about work, like our near northern neighbours.
