Peter S. Goodman’s recent article in the New York Times, “The New Poor: Millions of Unemployed Face Years Without Jobs,” paints a bleak picture for millions of long-term unemployed Americans. Once solidly middle-class, many are relying on public assistance for the first time in their lives. Beyond the damage caused by the recession, current American business practices discourage the creation of jobs.
Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.
‘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.’