For three decades, the supply of good jobs has been dwindling. The causes include globalization, deregulation, and weaker worker protections, such as minimum-wage laws and government defense of the right to unionize. Now, after three decades of stagnant incomes, we are heading for a severe recession. Higher unemployment will reduce worker bargaining power even further. The cure will require a much more active government role in the economy -- both as a regulator and as a source of funds.
In the same 30 years, the service sector has exploded as a source of jobs. The American work force has gone from 28 percent factory workers and 72 percent service workers in 1978 to 16 percent factory workers and 84 percent service workers today. But the service sector encompasses tens of millions of bad jobs -- in routine clerical work, retail sales, fast food, low-end human services -- and a relatively small number of very well compensated professional positions, among them doctor, lawyer, scientist, and investment banker.
Here is a very straightforward proposal. Let's have a national policy to make every human-service job a good job -- one that pays a living wage with good benefits, and includes adequate training, professional status, and the prospect of advancement -- a career rather than casual labor.
Don't mourn -- professionalize
These, after all, are jobs caring for our parents, our children, and ourselves. Transforming all human-service work into good jobs would not merely replenish the supply of decent work. It would vastly improve the quality of care delivered to the elderly at home or in institutions; to young children in pre-kindergartens or day-care facilities; and to sick people whether in hospitals, hospices, outpatient settings, or their homes.
These are also the jobs that cannot be outsourced. Even if we succeed in reviving American manufacturing, the process of automation means that America is almost certain to become even more of a service economy over time. Good service-sector jobs can help replace for good factory jobs.
Many economists once thought that widening income inequality was caused in part by the shift to a service economy. Factory jobs, the argument went, tended to pay above the median wage because each job added a lot of value. The more productive and capital-intensive the machinery became over time, the more value each job added. So by the mid-20th century, industrial workers could command middle-class wages and good fringe benefits. By contrast, human-service jobs were hands-on and labor intensive. A nursing-home worker or a pre-k teacher was low-tech. So the pay was low, too.
We now know that this picture was highly misleading. How do we know? Just look at the global economy. Autoworkers in Mexico use the same production technology as workers in Michigan, but their pay is about $2 an hour. In China, autoworkers may earn 50 cents a day. American autoworkers were paid middle-class wages not because of something inherent about making cars but because the United Auto Workers had the power to negotiate good wages. Conversely, Scandinavia has no low-wage human-service workers because it has made a decision that everyone who takes care of the sick, the old, or the young is a professional or at least a paraprofessional and is compensated as such.
Since most human-service costs are paid socially, choices about how to compensate workers are social decisions. In the United States, with our meager social outlay, we define these human-service positions as low-wage, casual jobs. In the Nordic countries, the people who work in pre-kindergartens or child-care centers are either teachers or apprentice teachers. In France, to work in a crèche maternelle, you need more qualifications than a public school teacher -- additional courses in child development and public health. When I recently interviewed Michel Rocard, who served as French prime minister from 1988?1991, he told me that his proudest success in resisting austerity demands was preventing the budget-cutters from reducing the qualifications and pay of pre-kindergarten teachers.
But in America, how can we possibly make all human-service jobs into good jobs? And aren't some of these jobs inherently low-skill? How much training, after all, does it take to empty a bedpan or change linen?
All it takes is money
Start with the fact that at least 60 percent of the funding for these jobs is ultimately public money. Government pays upward of half of all health-care costs through Medicare, Medicaid, the State Children's Health Insurance Program, the Veterans Administration, and the health insurance of public employees. Forty-five percent of nursing-home care is paid by Medicaid. Home care is heavily subsidized by public agencies. And in early childhood education and day care, while the affluent may have nannies or private day-care arrangements, Head Start is a public program, and state, local, and federal agencies subsidize day care through a variety of social-service programs.
Clearly, the government has the leverage to set standards. The federal Davis-Bacon Act is a rough model. It was enacted in 1931 to assure that nonunion construction contractors would not undercut prevailing wage scales. Davis-Bacon requires that all federally funded construction pay prevailing wages, which in practice turns out to mean union-scale wages.
Davis-Bacon, of course, has its critics. There was a time when union bargaining power was accused of stimulating inflation by driving contract settlements that increased wages and benefits in excess of the rate of productivity growth. But whatever the reality of that long-ago charge, that time is long gone. Today, the problem is the opposite -- wages lag far behind productivity increases, and the gains go instead to the top.
America needs a good-jobs strategy. And human-service jobs are a good place to begin.
How would such a transformation happen? Congress could require that any job in the human services supported in whole or in part by federal funds would have to pay a professional wage and be part of a career track. A minimum starting annual salary might be $24,000 a year, or about $12 an hour, an increase from the current common wage of around $9 an hour for nurse's-aide and home-care workers, and a sharp jump from the median wage of $7.69 for direct child-care providers. Opportunities for genuine advancement with pay increases would have to be part of the plan. For example, instead of defining a nurse's aide as a high-turnover, low-qualification, low-pay occupation, the job would require substantially more training, much of which could be done on the job. Such jobs would also be entry points to higher-level positions, such as licensed practical nurse. With more training and qualifications, these workers could be entrusted with more responsibilities, and nursing-home residents would get better care.
In the area of pre-kindergarten and day care, all such jobs would be teaching jobs rather than the high-turnover, largely custodial jobs of the current system. Raising the qualifications and pay of pre-k teachers, at least to the level of public school teachers, would be part of a national strategy of universal pre-kindergarten.
What of the argument that you don't need much training to baby-sit kids or provide basic care to senescent old folks? In fact, the development of young children and the quality of life of the elderly are profoundly affected by the quality of their caregivers. One of the best established findings of recent research on child development is that a dollar invested in early childhood education is one of the most cost-effective investments we can make. (See the Prospect's December 2007 special report, "Life Chances: The Case for Early Investment in Our Kids.") The difference between child-development and baby-sitting, of course, is the availability of well-trained professionals who work with young children. Likewise, in the care of the elderly, having well-trained people improves not just seniors' comfort but seniors' physical health, cognitive stimulation, and capacity to live fulfilling lives.
We have seen a rough model of this kind of upgrading and professionalization in the strategies of unions that represent home-care workers. Home-care workers are often classified as independent contractors. As a result, they have no bargaining power, and public and nonprofit agencies often try to solve their own budget problems by paying home-care workers as little as possible. This creates a vicious circle of burnout and high turnover, even though the vast majority of these workers are conscientious and eager to perform well. Recently, in several states led by California, the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees succeeded in persuading legislatures and governors to approve laws or executive orders establishing public agencies with which home-care workers could bargain collectively. In California, the typical wage went from minimum wage to $10 an hour.
Another pressing need is public subsidy to help low-wage human-service workers ascend career ladders. In some occupations, these ladders exist in principle, and there are heartening individual stories of the nurse's aide who graduated to licensed practical nurse, or the classroom aide who went to night school and earned a teaching credential. Despite a few model programs, our society seems determined to make this path as arduous as possible. Almost by definition, someone working for $6 or $7 an hour, often with family responsibilities, has an extreme shortage of time as well as money. Though some rare individuals do succeed, it takes uncommon tenacity and self-sacrifice, and sometimes the sacrifice of one's own children. Why should we make this so hard? Other societies provide subsidies for living expenses during training.
This effort would be part of two broader labor-policy shifts that America sorely needs. First, we need to reverse the trend toward casualization of labor that has been occurring for three decades. One of the great advances of the 20th century was regularization of the employment relationship. Through successful social struggle, growth of unions, and enactment of legislation, most jobs came to provide decent wages and fringe benefits. Workers could not be fired without cause. Loyalty to the firm was reciprocated. Grievance systems were created and respected. Economists termed these jobs primary labor-market jobs. Casual, secondary labor-market jobs, which paid less and offered no such guarantees, continued to exist, but they were the exception. In recent years, however, the shift to casual jobs has become the norm, and in low-paid human-service work, casual, high-turnover jobs are the industry standard.
Second, the upgrading of human-service work would reverse another insidious trend -- the employer's habit of trying to increase the efficiency of labor by fragmenting jobs into separate tasks and paying the lowest possible wage for each task -- a strategy known as Taylorism, after the early 20th-century "efficiency expert," Fredrick Winslow Taylor, who first recommended it.
However, when it comes to human services, many of the supposed gains of Taylorism are false economies. Studies of nursing homes have shown that better trained and paid workers can head off expensive conditions such as bedsores. Whereas registered nurses once performed a multiplicity of tasks and became very familiar with each patient, many hospitals have created a plethora of lower-wage occupations -- phlebotomists to draw blood, technicians to perform tests, nurse's aides to take blood pressures -- leaving the RN to cover more patients and do a far narrower range of tasks. But when the Massachusetts General Hospital ran an experiment, putting all care on one floor directly in the hands of RNs, the results were better patient outcomes and a more efficient use of human resources. The upgrading of human-service work would be part of an overdue process of reversing Taylorism. More workers would use a broader range of human skills to care for whole human beings.
But how much money?
A rough estimate of the cost of upgrading all low-wage human-service work into decent professional career paths is about $150 billion a year. A generally accepted figure of the cost of providing universal, high-quality pre-kindergarten and child care is about $50 billion a year. Upgrading existing jobs in day care for older children, care of seniors, and low-wage hospital-based work, would cost roughly another $100 billion.
Isn't that a lot of money? It certainly is, if you're invoking conventional budget assumptions that predate the current recession and financial collapse -- though it's not a lot of money compared to the cost of military operations in Iraq and Afghanistan, which is now budgeted at $188 billion annually. To put this in perspective, $150 billion a year is approximately 1 percent of gross domestic product.
But for the rest of this decade, and perhaps well beyond, the American economy faces two huge challenges. The first is to dig out of the most serious financial collapse since the Great Depression and its spillover effects into the rest of the economy. The second is to restore the income of American workers.
A strategy that increases Americans' purchasing power can take a variety of forms. Besides good human-service jobs, it could include massive public spending on deferred public infrastructure needs, as well as a green recovery path, creating new alternative-energy industries and jobs retrofitting homes and offices. Both strategies would also create decent job opportunities. Enacting the Employee Free Choice Act, protecting collective bargaining rights, would also increase the ability of workers to bargain for a decent share of the pie.
Voters are only going to embrace serious public spending if we think big. The promise of millions of good service-sector jobs that can't be exported -- providing superior care to our children, our parents, and ourselves -- is an example of the kind of idea that could capture the national imagination and rekindle the necessary political support for serious public outlay. This is the kind of idea that could be embraced by a broad coalition of experts, opinion leaders, editorial writers, grass-roots groups -- and the next administration. It touches a national nerve of anxiety about where the good jobs will be for our children -- and who will take care of us as we age.
I don't mean to suggest that we should ignore the upgrading of other service jobs. As our friends at the SEIU have shown, collective bargaining can improve janitor jobs as well as jobs of home-care workers, just as unions once upgraded factory jobs. The labor union UNITE-HERE has turned low-wage hotel jobs into middle-class jobs. We need a decent-work strategy for the whole economy. But human services are one place where the federal government has direct leverage.
Before this recession is over, we will need to find several hundred billion dollars a year for a recovery strategy -- and what better place to begin than by restoring workers' paychecks? We can find that money by reclaiming progressive taxation, by defending deficit spending in a deep recession, by shifting federal dollars from a pointless war to a domestic recovery, and reviving trade unionism. The political situation is comparable to the one that Franklin Roosevelt faced in 1933. Policies that were unthinkable yesterday are just the bare beginning of an adequate response today.
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