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Economics and Human Wellbeing

I've spent half a century (yikes) writing for radio and print—mostly print. I hope to be still tapping the keys as I take my last breath.

The COVID-19 pandemic has exposed many flaws in industrialized societies, one of which is the relationship between employers and employees. Phrases such as “gig jobs” and “informal employment” sum up the exploitation of labour that leads to a yawning gap of inequality.

Some groups are working to improve the pay and working conditions for those who find themselves vulnerable to the tactics of bad employers.

Charlie Chaplin's 1936 movie, Modern Times, was a criticism of the exploitative practices in industrial America.

Charlie Chaplin's 1936 movie, Modern Times, was a criticism of the exploitative practices in industrial America.

The Failure of Neoconservatism

Economist Joseph Stiglitz, writing in The Guardian, describes neoconservatism (also called neoliberalism) as “lower taxes on the rich, deregulation of labour and product markets, financialisation, and globalisation.” Added to this has been the defunding of social services. Stiglitz says that neoconservatism “has been a spectacular failure.”

People were told that “trickle down economics” would benefit everyone; a rising tide lifts all boats was the popular phrase. As rich people got more money they would spend it creating jobs, so the theory said. However, the theory crashed headlong into reality. It turned out that most people didn't have boats so the rising tide went over their heads.

Many of the world's billionaires gathered in more money than they could possibly spend so they stashed it away in offshore havens to avoid taxes. The trickling down stopped with the lawyers who set up shell companies for their rich clients in places such as the Cayman Islands or Liechtenstein.

The Rich Get Richer and the Poor Get Poorer

We often hear about the glories of the 1950s when a single income earner in a household could support a lifestyle that involved buying a house, a car, and putting the kids through college. Those days are gone.

The Pew Research Center tells us that in 1971 61 percent of Americans lived in the group classified as middle class; today, the figure is just over 50 percent. During the last five decades, middle-class incomes have stagnated when measured against inflation. So, to maintain their status requires two incomes not one, and for many it's still a struggle to keep from slipping into the lower class.

As the middle class has shrunk, the lower class has grown, from 25 percent in 1971 to 29 percent now. It's in this group that the harshest effects of income inequality are felt, and there's no more vivid an illustration of this than homelessness.

An article in The American Psychologist notes that “In the 1950s and 1960s homelessness declined to the point that researchers were predicting its virtual disappearance in the 1970s.” Instead, the number of homeless people in America now stands at an estimated 580,000.

Meanwhile, those in the upper class have seen their fortunes improve. In 1971, 14 percent of the U.S. population was considered to be upper class; this group has grown to 19 percent.

The middle is being hollowed out.

The average pay for chief executives increased by 1,322 percent between 1978 and 2021.

The average pay for chief executives increased by 1,322 percent between 1978 and 2021.

Bad Employment Practices

It isn't just in pay packets where workers are feeling pain, some employers create dreadful environments for those who toil for their company's profits. There are also issues with being forced to work brutal hours, lack of job security, and unsafe workplaces.

Now that workers can rate their employers on several websites the bad actors are being identified and lists of them appear in many places, drawing on data from the jobs website Glassdoor.

Companies in the retail sector frequently turn up in “25 Worst Employer” lists, names such as Office Max, Walmart, Williams Sonoma, Kmart, and Family Dollar Stores appearing frequently. Fast food companies such as Yum Brands (KFC, Taco Bell, and Pizza Hut) and McDonald's also get low marks from employees.

“People are questioning the very idea of selling their labour in a rigged marketplace to employers who only recognize their utility to the bottom line.”

— Globe and Mail columnist Elizabeth Renzetti

By the middle of 2021, large numbers of workers concluded they'd had enough and the Big Resignation began.

Read More From Owlcation

According to Vox “Importantly, the pandemic—as well as government social safety nets like extended unemployment benefits—gave people the time, distance, and perspective to reevaluate the place of work in their lives.” And what many of them seem to have decided is that there's more to life than toiling at two jobs for minimum wages under the watchful eye of abusive bosses.

Economist Paul Krugman puts it this way in The New York Times, “The pandemic led many U.S. workers to rethink their lives and ask whether it was worth staying in the lousy jobs too many of them had.”

The U.S. Bureau of Statistics says that “The number of quits increased in September (2021) to a . . . high of 4.4 million.” As a result, many employers are scrambling to find staff and they are having to sweeten the pay scales and improve working conditions to fill vacancies.

Johnny Paycheck Expressed the Feelings of Many People Today back in 1978

A Better Workplace

Democratizing Work is an international organization that is “committed to democratizing work and sustaining life on this planet.” It takes on the neoconservative economic theories that claim free market capitalism is king and solves all problems.

The core of their attack is that free market capitalism reduces workers to mere units of production, and removes their humanity. So, once the workers have been dehumanized any amount of mistreatment becomes acceptable.

Democratizing Work notes that “Caring for the sick; delivering food, medication, and other essentials; clearing away our waste; stocking the shelves and running the registers in our grocery stores—the people who have kept life going through the COVID-19 pandemic are living proof that work cannot be reduced to a mere commodity. Human health and the care of the most vulnerable cannot be governed by market forces alone.”

Those in the upper income group invest their money into business enterprises; those in the lower income groups invest their labour. But, those who create products and services have no voice in how the businesses that employ them are run, while those who contribute only money control all the decisions.

Economist Joseph Stiglitz has put forward a four-point plan to address the inadequacies:

  • A better balance of power among corporations, civil society, and governments must be achieved. “Governments have a duty to limit and shape markets through environmental, health, occupational safety, and other types of regulation;
  • “Markets still have a crucial role to play in facilitating social cooperation, but they serve this purpose only if they are governed by the rule of law and subject to democratic checks;”
  • Corporate monopolies must be broken up so that competitors have a chance to enter the marketplace; and,
  • “The fourth key item on the progressive agenda is to sever the link between economic power and political influence.”

Stiglitz's prescription for reform dovetails closely with what Democratizing Work is calling for with the addition of a couple of other changes.

  • “Guaranteed employment would allow governments, working through local communities, to provide dignified work while contributing to the immense effort of fighting environmental collapse; and,
  • “Our governments must make their aid to firms conditional on certain changes to their behaviors. In addition to hewing to strict environmental standards, firms must be required to fulfill certain conditions of democratic internal government.”

The organization points out that some of these policies have been in place for many decades in places such as the Netherlands, Germany, and Scandinavia, none of which have low standards of living.

Bonus Factoid

Article 23 of the Universal Declaration of Human Rights says that:

  • Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
  • Everyone, without any discrimination, has the right to equal pay for equal work.
  • Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
  • Everyone has the right to form and to join trade unions for the protection of his interests.

George Carlin Describes the American Class System

Sources

  • “The American Middle Class Is Stable in Size, but Losing Ground Financially to Upper-Income Families.” Rakesh Kochhar, Pew Research Center, September 6, 2018.
  • “The Old Homeless and the New Homelessness in Historical Perspective.” P.H. Rossi, The American Psychologist, August 1990.
  • “Worker Beware: These Are the 22 Worst Companies to Work for.” Sarah Louis, moneywise.com, December 20, 2020.
  • “Neoliberalism Must Be Pronounced Dead and Buried. Where next?” Joseph Stiglitz, The Guardian, May 30, 2019.
  • “Democratizing Work.” Isabelle Ferreras, Julie Battilana, Dominique Méda, and 3.000 others, op ed article published in 41 newspapers in 36 countries, May 15, 2020.
  • Democratizing Work.
  • “Hating Work Is Having a Moment.” Rani Molla, Vox, November 12, 2021.
  • “The Revolt of the American Worker.” Paul Krugman, New York Times, October 14, 2021.
  • “What Would it Look Like to Truly Value Workers?” Elizabeth Renzetti, Globe and Mail, November 5, 2021.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2021 Rupert Taylor

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