In the next installment of our weekly column from What’s Next? author Lyric Hale, the top economic commentator discusses the importance of job opportunities in creating a functioning economy and society. Discussing the internal conflict in Syria, the social unrest on the streets of Britain and Obama’s job creation efforts, Lyric Hale provides a balanced account of the difficulties facing countries with high unemployment, and what these difficulties can lead to if these problems remain unsolved.
Article by Lyric Hughes Hale
There is no such thing as a jobless recovery, or political stability without employment
It seems like another era, but it wasn’t that long ago, November, 2006. I was headed to Damascus for the Syrian Banking Conference, when my plane was hit by lightning. Surely a sign that I wasn’t supposed to be going to a country that President Bush had included in the “axis of evil”.
The ensuing emergency landing stimulated conversation amongst former strangers on board. Luckily, I was sitting near a veteran traveler, Syrian scholar Patrick Seale. Not having any idea of who he was, I asked him if he had ever been to Damascus—the equivalent of asking Henry Kissinger if he had ever been to China. He responded graciously, and gave me a wonderful introduction to modern Syria that I otherwise would have missed.
A couple of evenings later, my husband and I were at the conference dinner, attended by Syrian President Bashar al-Assad and his wife. We were the only Americans present, and probably as a result, we were invited to sit at their table. Asma al-Assad is a beautiful and intelligent woman, and my husband was entranced as she talked about opening a stock market in Damascus (she was an investment banker prior to her marriage). Sitting near Bashar al-Assad, who is more taciturn than his wife, I struggled a bit to come up with topics to discuss that would be politically correct under the circumstances, as scenes of the recent movie Syriana and its star George Clooney swirled through my mind. His answer to one of my more direct questions was surprising. Al-Assad said that was happy to speak to the Israelis and the US, without preconditions. I could not believe what I heard. At the time, there had been no US ambassador assigned to Damascus for several years. No wonder there were crossed signals!
Finally, it was my turn to speak to Mrs Al-Assad. The trouble with our region, she said, is that there aren’t enough job opportunities for young people, and to create them will require regional economic integration. Cut off from the technological powerhouse that is Israel, blocked from financial transactions with the United States, there is no clear path to participation in the global economy. About 30% of the young men in the country do not have any employment, and without jobs, they have no honor, and no place. Tragically, although they recognized the issue, the Assads were not able to solve this problem.
Today, youth unemployment is a growing worldwide phenomenon, the highest since records have been kept. I believe that it is the root cause or condition of our now widespread political gyrations. The disturbances that we see today, from Damascus to London to China to the streets of Chicago relate to jobs, for reasons better explained by sociology than economics.
In fact, political instability in most of the world seems inversely related to youth unemployment, even if a direct causal link cannot be established. Here is a very recent statement from my old acquaintance Patrick Seale:
It would be hard to argue that the rioting which erupted in British cities this month was of exactly the same nature as the ongoing revolts across the Arab world or the massive social protests which have rocked Israel, Greece, Spain, Italy, Portugal and other countries. The indignados – the angry ones – in each country have their own reasons to rebel. Yet they do all seem to have some things in common, even though the mix of economic, social and political causes is clearly not the same everywhere.
Youth unemployment, social injustice, police brutality, the excesses of unregulated capitalism, the arrogant consumerism of the rich and the misery and helplessness of the poor, the widespread sense that the country’s resources are in the wrong hands and are being spent in the wrong way, the alienation of much of the population from the centres of power – most of these factors are present, in one form or another, in the various places where protesters have taken to the streets.
Of course, unemployment is one thread in the tapestry of despair. Problems with our educational and political systems, technological displacement, and fallout from globalization itself should not be minimized. But the jobs situation in particular will not improve until we understand that there is a clear human need, very high on the scale of desire, to belong to a group bigger than oneself. That is why gangs exist where unemployment is high. Gang members and flash mobs do no not have jobs, or at least the jobs they aspire to.
Losing a job can be personally catastrophic, even for those who are financially secure. My cousin was “early-retired” from AT&T, after working there for decades. She was given a good pension, but she told me that she was in mourning. She missed going to the office each day with a purpose, and seeing her colleagues. “We get together for coffee, but it’s just not the same. All we have to talk about is our personal lives, not something we are working on together. We don’t have a sense of purpose anymore.”
Would Al-Qaeda have been able to recruit so many if there was a full-employment economy in the Middle East? I doubt it. I would bet that many of these young people would have been happier working at a good job at a high-tech company. And how much cheaper would it have been to give a job to everyone in Iraq, rather than fight a war? Instead, we disbanded the security forces which were the country’s major employer, and took away what had once been secure jobs. We are still paying for the resulting chaos.
Recently, I created a global Facebook page and ad campaign for our book, What’s Next? The intriguing result was that the demographic for the people who responded that they liked the book is overwhelmingly young. Not a few work at McDonalds. Of course, I thought, why wouldn’t they put “What’s Next?” on their virtual bookshelf next to Harry Potter and the Bible? This is the group that most wants to know the answer to that question.
Paradoxically, its not that there isn’t anything to do, it is just that formal jobs for critical purposes haven’t been properly organized. There is PLENTY to do all over the world in terms of building and improving basic infrastructure for example. President Obama has said that he will be unveiling a new jobs program next month. I am hoping that his advisors took a good look at FDR’s job creation efforts, which were the most popular of all of the New Deal programs. In addition to the WPA, the Works Progress Administration, Roosevelt created a specific program to give jobs to young people called the Civilian Conservation Corps. Unmarried men aged 18-25 were given work on massive land improvement projects, supervised by the Army Corps of Engineers. By the time the CCC was disbanded during World War II, it had employed 2.5 million young men.
The largest CCC project was in fact a mile from my home here in Chicago, the Skokie Lagoons. We still benefit from this 9-year effort, which removed 4 million yards of earth, and created a nature conservancy full of fish and wildlife that otherwise would have been a perfect marshland for mosquitoes. As you might know from my previous posting, we now have a need for a major flood control project to protect our homes and businesses. We could use these young people again, for a very concrete purpose.
I am sure that some of you are saying jobs are the responsibility of the private sector, not the government, but the truth is that it has to be both. In 1935, there were 10 million unemployed, one-third of who found employment through the WPA. That might be about the right ratio for leadership on job stimulus geared at increasing consumption quickly.
Robert Reich, the former Secretary of Labor under Bill Clinton, has recently excoriated US corporations for not doing more hiring. But let’s face it, the purpose of business is to maximize profits, and in an era where raising capital in the stock market and getting credit at banks might become increasingly difficult, any responsible company executive is going to be very careful about spending on hiring. By the way, I checked: Dr Reich has never worked for the private sector. Pretty much no one in our current government has had the responsibility of meeting a payroll, or has ever had to lay off anyone, so they don’t understand the hesitation of the private sector.
Present circumstances being what they are, we need government to take the lead on jobs, not just here in the US but everywhere. The political achievements of the Arab Spring will fade away, unless their new leaders can offer what previous rulers were unable to achieve—employment for those who wish to work, and a sense of purpose and belonging which is positive rather than destructive.
What’s Next? Unconventional Wisdom on the Future of the World Economy by David Hale and Lyric Hale is available now from Yale University Press.