The Great Recession: Are we looking at a repeat?

Ten years ago…

A decade ago, the world economy crashed. Fellow news junkies have no doubt noticed the surfeit of news articles reflecting back on the brutal unfolding of the Great Recession. For me, the Great Recession is such a defining chapter in my generation’s story that these pieces prompt vivid “where were you when…” remembrances of September 2008.

Watching from afar

I was in Hawaii at the time, and it was surreal.

I had been awarded a research sabbatical for that fall term. But before digging into my sabbatical work, I visited Maui for two weeks to help out and support a dear cousin who had lost her husband to cancer.

As we sorted through the many details that follow the passing of a loved one, regular TV programming was constantly interrupted by news coverage of the rapid economic collapse. It quickly became clear that this was no ordinary downturn, and that the world’s economic and financial structures were at risk of breaking apart.

To watch this unfold from one of the most beautiful places in the world, with a six-hour time difference between the East Coast and Hawaii, made for a disconnected and strange experience. You step outside into sunlight and palm trees and locals going about their business. You then watch the television news, with a lot of normally cool characters looking visibly shaken and fearful.

Today’s reality

So here we are, a decade later, looking back at the Great Recession and all the human and financial carnage it exacted. It would be nice to assume that we’ve learned from the massive debt bubbles and casino-style investing that helped to bring down the economy in 2008, and that somehow we’ve managed to reclaim those losses.

But there are two stark realities facing us today: First, although a booming stock market, record profits, and executive raises have fueled the net worths of the wealthy and upper middle class, a lot of middle-class, working-class, and poor people have never recovered from the last recession. As Alana Semuels wrote in “The Never-Ending Foreclosure,” a December 2017 piece in The Atlantic:

In the big picture, the U.S. economy has recovered from the Great Recession, which officially began a decade ago, in December of 2007. The current unemployment rate of 4.4 percent is lower than it was before the recession started, and there are more jobs in the economy than there were then (though the population is also bigger). But for some, the recession and its consequences are neverending, felt most strongly by families . . . who lost jobs and homes. Understanding what these families have experienced, and why recovery has been so evasive, is key to assessing the economic risks the nation faces. Despite ever-sunnier economic conditions overall, the Great Recession is still rattling American families. When the next economic crisis hits, the losses could be even more profound.

Secondly, a lot of knowledgeable people are saying that we are once again on the brink of a significant economic downturn. I won’t even attempt to link to the array of opinion pieces and analyses making this point. Just search “next recession,” and you’ll see what I mean. These assessments are coming from liberal, moderate, and conservative economists alike. Their biggest question is how bad will it be. It’s safe to say, however, that especially for the millions of people who never recovered from the last recession, the added punch will be extremely hard.

I know I’m sounding like a doomsayer, but I think we’re in for another rough go of it. My biggest question is whether we’ll come out of the next recession with a genuine civic and political commitment toward building an economy that works for everyone, not just for the wealthy and well-to-do.

…on-the-ground realities today

Have we entered an “era of empathy” at work? (Uh, well, at least not yet)

Four years ago, business school professor Rita Gunther McGrath (Columbia U.) suggested in a piece for the Harvard Business Review that we are entering an “era of empathy” at work. I wasn’t sure what to make of that assertion when I first read her commentary, so I kept the article on file and told myself that I’d return to it someday. I figured this Labor Day weekend is a good time to revisit it.

According to Dr. McGrath, “we’ve seen three ‘ages’ of management since the industrial revolution, with each putting the emphasis on a different theme: execution, expertise, and empathy.”

The rise of an industrial economy prompted the era of execution, focussing on “execution of mass production, and managerial solutions such as specialization of labor, standardized processes, quality control, workflow planning, and rudimentary accounting were brought to bear.”

Then came the era of expertise, signaled by the emergence of university business schools and the establishment of journals such as the Harvard Business Review during the late 1800s and early 1900s. These developments marked “progress toward the belief that management was a discipline of growing evidence and evolving theory.”

Now, wrote McGrath, we have entered a third era, that of empathy:

Today, we are in the midst of another fundamental rethinking of what organizations are and for what purpose they exist. If organizations existed in the execution era to create scale and in the expertise era to provide advanced services, today many are looking to organizations to create complete and meaningful experiences. I would argue that management has entered a new era of empathy.

This quest for empathy extends to customers, certainly, but also changes the nature of the employment contract, and the value proposition for new employees. We are also grappling with widespread dissatisfaction with the institutions that have been built to date, many of which were designed for the business-as-machine era. They are seen as promoting inequality, pursuing profit at the expense of employees and customers, and being run for the benefit of owners of capital, rather than for a broader set of stakeholders. At this level, too, the challenge to management is to act with greater empathy.

The era of empathy hasn’t reached the workplace yet

As Dr. McGrath suggests, all the research, knowledge, and analytical tools are in place to usher in this age of empathy into the workplace: We’re aware of burgeoning income and wealth inequality. We’re aware of negative changes in employment relations, especially the demise of unions. We’re aware that bullying, mobbing, sexual harassment, and other forms of worker mistreatment continue to inflict huge individual and organizational tolls.

We’re also aware that treating employees with a baseline of dignity is a great way to grow and maintain a stable, productive, and loyal workforce.

But here’s the disconnect. Despite all this research, knowledge, and analysis, too many employers are preserving the status quo, or doing even worse. On this Labor Day weekend:

  • Income and wealth inequality continue to expand, especially as measured by the widening gap between highest and lowest paid employees in organizations;
  • Employers, backed by inadequate enforcement of labor laws, continue to vigorously oppose unions and collective bargaining;
  • Work abuse in the forms of bullying, mobbing, and harassment continues to ignored and sometimes fueled by too many senior managers and executives.

I don’t think the era of empathy is going to become a reality without workers demanding so. While certainly there are employers who do the right thing by their employees and reap the benefits (Costco comes to mind), all too many of their counterparts operate in a much different manner. The latter includes some of the giants of our labor market (e.g., Amazon and Walmart), who set the pace for others and can do better.

Put simply, we need a revived, energetic, inclusive, and creative labor movement to usher in these needed changes. Unions will be a big part of that revival, but so will other worker advocacy, civil rights, and religious groups, as well as networks of individuals connecting in person and online. It will also require electing to office those who value the interests of everyday workers over the interests of those vested in concentrations of wealth and power.

It’s a big, challenging task. Labor Day is a good time to rededicate ourselves to it.

On being restlessly patient in advancing positive law and policy reforms

A piece in the current issue of the Economist, the venerable British news magazine, resurrects the tax policy positions of Henry George, an author and political economist who built a worldwide following during the last half of the 19th century:

ON A trip to New York in the late 1860s the journalist Henry George was puzzled. He found the rapidly growing city to be a place of unimaginable wealth. Yet it also contained deeper poverty than the less-developed West Coast. How could this be? George had an epiphany. Too much of the wealth of New York was being extracted by landowners, who did nothing to contribute to the development of the city, but could extract its riches via rents. The problem could be solved by a tax on land values.

George’s subsequent masterpiece, “Progress and Poverty”, sold more copies in America in the 1890s than any other book except the Bible. It spawned campaigns for land-value taxation around the world. It also inspired a board game, “The Landlord’s Game”, a precursor to “Monopoly”. The game was designed to show how property markets naturally tend towards monopolies in which one player can extract all the rent.

Examining the current state of tax policy, the Economist concludes that a stronger reliance on land taxation might be a good thing.

I’ve been interested in George’s land tax proposal ever since reading about it in Robert L. Heilbroner’s The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers back in college. (Heilbroner has passed, but his book — last revised in 1999 — remains, in my opinion, the most engaging, lucid, and accessible introduction to the history of economic thought.) As the Economist piece suggests, Henry George’s ideas would fade into obscurity. They have been kept alive by a small but determined band of economists and social activists, coalescing around a group of independent Henry George Schools dedicated to providing continuing education and scholarship about Georgist economic principles.

But the purpose of this writeup isn’t to convince you, dear readers, on the merits of Henry George’s taxation theories, even though I believe they are worth considering. Rather, it’s to point out that important ideas about law reform and public policy sometimes take years to percolate, in some cases beyond our lifespans.

With that reality in mind, I have favored an attitude of restless patience in advocating for desired changes in law and public policy. In this context I think of restless as being dissatisfied with the status quo. I think of patience as being smart, persistent, and determined. I have had to give myself this advice on at least three areas of law and policy reform very dear to me:

Workplace bullying and law reform

Some 20 years ago, my first law review article on the legal and public policy implications of workplace bullying was accepted for publication, and it would be published by the Georgetown Law Journal in 2000. Among other things, it surveyed potential legal protections for targets of workplace bullying under American employment law and found them wholly wanting. I proposed the parameters of what would become a model workplace anti-bullying statute, eventually dubbed the Healthy Workplace Bill (HWB).

For some 15 years, the HWB has been the main template for law reform efforts concerning workplace bullying, but it has not yet been enacted in its full form by any of the 30 states in which it has been introduced. However, in recent years we have had some breakthroughs, with several states and municipalities enacting workplace bullying legislation and ordinances drawing heavily from the language of the HWB. Unions and government entities are also using the HWB language to collectively bargain over workplace bullying concerns and to design internal agency employment policies.

Here in Massachusetts, we continue to work hard to make our state the first one to enact comprehensive workplace anti-bullying legislation. The HWB once again stalled in the just-completed session of the MA legislature, despite dozens of legislative sponsors and a positive report out of the committee overseeing it.

Advocacy work can be frustrating and sometimes demoralizing. But if you believe deeply in something, you keep going. Maybe you change strategies or tactics, but you persevere. And come January, when the 2019-20 session of the legislature begins, we’ll be ready to go.

Like an unwanted holiday fruitcake

In 2002, the Connecticut Law Review published my article on the legal status of interns, in which I looked at the burgeoning intern economy and concluded that many unpaid internships are running afoul of minimum wage laws. I hoped that the piece would quickly stir some interest, but for many years it pretty much sat there, like an unwanted holiday fruitcake.

This changed when a writer named Ross Perlin authored the first comprehensive examination of the explosive growth of unpaid internships, Intern Nation (2011). He referenced my 2002 law review article and called it “the single best source of information for American internships and the law.” (Thank you again, Ross, for pulling my article out of depths of Westlaw and Lexis-Nexis.) One of Ross’s readers, Eric Glatt, chased down my law review article and concluded that his unpaid internship with Fox Searchlight Pictures just might’ve been in violation of minimum wage laws. Eric would become the lead plaintiff in a federal lawsuit seeking compensation for that internship.

To our disappointment, federal courts have not been friendly to these claims brought by unpaid interns, adopting a very pro-employer legal test for exempting interns from the minimum wage. However, the door has not been completely closed on such legal claims, and the considerable publicity generated by these cases has caused many employers to opt to pay their interns. The debate over unpaid internships, once a non-existent one, continues to reverberate in business and legislative settings.

Should law be therapeutic?

In recent years I’ve allied myself with a much broader effort to change our laws and public policies, an interdisciplinary field of philosophy and practice called therapeutic jurisprudence. “TJ,” as it is commonly referred to, examines the therapeutic and anti-therapeutic properties of laws, legal systems, and legal institutions. It favors outcomes in legal disputes and transactions that advance human dignity and psychological well-being.

TJ was founded in 1987 by two American law professors, David Wexler and Bruce Winick. Although it has grown into a global network of scholars, lawyers, judges, and other practitioners, it has yet to enjoy a mainstream presence in legal academe or legal practice. To help expand TJ’s influence, we have formed a new non-profit, membership organization, the International Society for Therapeutic Jurisprudence. I am serving as the ISTJ’s first board chair.

I hope that someday, sooner than later, TJ will be recognized as a primary framing theory for the design and application of the law. In the meantime, I find myself inspired by that cohort of scholars, educators, and activists who have kept the flame of Henry George’s ideas alive for so many years.

On being restlessly patient

Indeed, I’d like to think that the spirit of Henry George is pleased to see his ideas about land taxation knocking on the door of greater mainstream reception. Of course, in my case I’d rather not wait for some 130 years to see workplace bullying laws widely enacted, interns being paid for their work, and our laws and public policies embracing human dignity and psychological well-being. But at least it’s a reminder that good ideas can’t be suppressed forever.

As I find myself urging upon those who are understandably frustrated with the pace of social progress and justice, we cannot control outcomes, we can only try to influence them. This is an especially important reality for the times in which we live. Buoyed by a spirit of restless patience, our job is to dig in, plant the seeds for positive change, and take part in moving our society toward something better.

***

You may freely download my law review articles on workplace bullying, intern rights, and therapeutic jurisprudence from my Social Science Research Network page. At the risk of being immodest, I have been told by many folks who are not lawyers or academics that they are very readable and accessible, which I consider to be a supreme compliment.

Networks vs. hierarchies

Historian Niall Ferguson has written a very interesting book for anyone interested in the intersections of power, institutional hierarchies, and social networks. It’s titled The Square and the Tower: Networks, Hierarchies, and the Struggle for Global Power (2018). Here’s a snippet from the publisher’s description:

Most history is hierarchical: it’s about popes, presidents, and prime ministers. But what if that’s simply because they create the historical archives? What if we are missing equally powerful but less visible networks – leaving them to the conspiracy theorists, with their dreams of all-powerful Illuminati?

The twenty-first century has been hailed as the Networked Age. But in The Square and the Tower Niall Ferguson argues that social networks are nothing new. From the printers and preachers who made the Reformation to the freemasons who led the American Revolution, it was the networkers who disrupted the old order of popes and kings. Far from being novel, our era is the Second Networked Age, with the computer in the role of the printing press. Once we understand this, both the past, and the future, start to look very different indeed.

I’ve spent some time with this book, and although its focus is on the grander sweep of history, it’s a thoughtful and provocative read for anyone who wants to contemplate the hierarchy vs. network dichotomy generally.

In fact, the book’s main theme may have special significance for those of us in “underdog” roles with the ideas and causes we’re advocating for, in a world where political, economic, and social power can feel so stubbornly concentrated. In essence, The Square and the Tower invites us to think about how we can use our horizontal networks to overcome entrenched hierarchies. It’s not easy, but it can happen, and access to digital communications can help us do it. Technology is not a panacea, but it can be an accessible and relatively affordable connector, not to mention a welcomed complement to face-to-face communications.

Of course we shouldn’t err in assuming that all networks are good and all hierarchies are bad. Structures can be created and activated for positive and nefarious purposes alike; human motivations and actions give them their meaning.

This theme is but one element of the much larger conversation of how we can change an increasingly plutocratic society, with its enormous hierarchies of wealth and power. Nevertheless, it puts some historical “oomph” behind the notion that networks matter and can impact change.

Work, savings, retirement: Generation Jones is getting hammered

If you were born between 1954 and 1965, then you may identify as a member of “Generation Jones,” that large cohort sandwiched between classic Baby Boomers and classic Generation Xers. The thesis is that Gen Jonesers, on average, have had very different life experiences than those of folks in the two iconic groupings. Indeed, with a 1959 birthdate, I am a card-carrying member of Generation Jones, and I have long believed that, on balance, our group is different than the mainstream Boomers with which we are often categorized.

Gen Jonesers now range from their early 50s and early 60s. And currently, this age group is getting hammered by economic conditions and policies, personal financial circumstances, and frequent age discrimination in the workplace.

To some extent, this Generation Jones has been snakebitten by broader events. During the early 1980s, many graduated into a terrible recession that limited entry-level job opportunities. This was also a time when America’s industrial jobs base went into sharp decline (a trend continuing to this day), wages started to flatline (ditto), and employers began eliminating pension plans (ditto again).

Fast forwarding, the Great Recession hit during what should’ve been Gen Jonesers’ strongest earning years, the heart of their 40s and early 50s. Many lost jobs and livelihoods during that time and have struggled to recover. Some have never recovered. Gen Jonesers are now hurtling toward what have been considered traditional retirement years; most are within 10-15 years of that time. But as I have written often on this blog (here, for example), America faces a retirement funding crisis of major proportions.

My own interest in this topic relates to my work on workplace bullying. I’ve witnessed the challenges that face those in middle age who have lost jobs and livelihoods due to bullying, mobbing, and abuse at work. The ongoing specter of age discrimination often undermines their efforts to seek new employment.

These are difficult topics, but they are vitally important, and they should be front and center in our national political and policy debates, even though anyone following the news knows they are not. For those who want to learn and think more, however, I’ll make two suggestions:

First, watch Elizabeth White’s TEDx talk, “Fifty-five, Unemployed, Faking Normal.” It’s an 18-minute reflection on what it means to have lost your job at middle age and to face the financial challenges that can follow. I’ve written about her important work before, and I’m a big fan of her book, Fifty-Five, Unemployed, and Faking Normal: Your Guide to a Better Life (2016). Richard Eisenberg, writing for the Next Avenue blog, previews White’s TEDx talk:

White’s TEDx Talk, filmed earlier this year in Richmond, Va., is a composite of her story and her friends’ — women and men in their 50s who are “faking normal.” By that, White’s talking about people who had good careers and lives until they didn’t. She describes them in the TEDx Talk as people who “entered the uncertain world of formerly and used to be.”

Second, read Elizabeth Olson’s New York Times piece, “Shown the Door, Older Workers Find Bias Hard to Prove,” which explains the legal challenges facing laid off workers who are alleging age discrimination:

Yet, even as the work force has a large number of older employees, one of the principal tools to fight such discrimination, the Age Discrimination in Employment Act — which Congress passed a half-century ago — may not be up to the task, said Laurie A. McCann, a lawyer with AARP Foundation Litigation, which is providing legal counsel to the Wichita plaintiffs.

“Ageism unfortunately remains pervasive in the American work force,” she said. Only two of the cases the E.E.O.C. filed in court last year involved the federal age discrimination act, according to a list assembled by AARP, the nonprofit older citizens group.

They were among a total of only 86 workplace discrimination cases litigated in court last year, AARP found. Few cases are taken to court because such complaints are complicated and expensive; it can take a long time to assemble relevant evidence and testimony.

How do social and economic class differences impact workplace bullying?

Do social and economic class differences impact workplace bullying and mobbing behaviors? If so, how?

America continues to think itself as a classless society, despite deep and worsening wealth divisions. Now, however, it appears that a combination of the ongoing effects of the Great Recession and the tumult associated with the election of Donald Trump has prompted some closer looks at class distinctions. For example, The Guardian newspaper has launched an ongoing investigative study of class and inequality in the U.S.:

We’re calling it On the Ground: reporting from all corners of America. The series is funded in part by a grant from the Rockefeller Foundation to support the Guardian’s reporting on wealth inequality in America. The Rockefeller grant will fund a broader Guardian project called Inequality and Opportunity in America, focused on economic disparities due to work, class and inequality.

Also, Annie Lowrey, writing for The Atlantic, spotlights a new book by Richard V. Reeves, Dream Hoarders (2017), that points a finger at America’s upper middle class as a major culprit in reinforcing inequality. While recognizing the extreme wealth concentrations enjoyed by the top one percent, Reeves argues that the top twenty percent have also enjoyed considerable success in recent decades, leaving the others in their wake. He further posits that these advantages are being passed on to their children in ways that will only harden social and economic class inequalities.

I’d like to take a closer look at these commentaries in a future post, but for now let’s return to bullying and class distinctions. I did a quick search for studies examining potential relationships between workplace bullying and social/economic class and didn’t come up with much. But the more I ponder the question, the more I’m convinced that class can play out significantly in this realm. It may manifest itself in a well compensated manager or highly degreed professional who looks down at less educated, lower paid co-workers and treats them accordingly. It may involve a group of co-workers who see a peer as not being from their side of the tracks (whichever side that may be) and bully, harass, and ostracize that individual because of it.

In any event, this topic is ripe for more research and understanding. Workplace bullying, mobbing, and abuse may occur due to many reasons. Class distinctions definitely belong on the list.

The 4-hour workday vs. no work at all: Utopian and dystopian visions of laboring

Could we be more creative and productive by working only four hours a day? If the work habits of folks like Charles Darwin are any indication, the answer may be a resounding “yes.”

In a feature article for The Week, Alex Soojung-Kim Pang, author of Rest: Why You Get More Done When You Work Less (2016), looks at the work habits of highly accomplished creative people through history and finds that they:

…all shared a passion for their work, a terrific ambition to succeed, and an almost superhuman capacity to focus. Yet when you look closely at their daily lives, they only spent a few hours a day doing what we would recognize as their most important work. The rest of the time, they were hiking mountains, taking naps, going on walks with friends, or just sitting and thinking.

As for Darwin specifically, he authored 19 books, including the paradigm-making Origin of Species. Once a workaholic, he settled on a daily schedule that looked something like this, as Pang writes:

  • “After his morning walk and breakfast, Charles Darwin was in his study by 8 a.m. and worked a steady hour and a half.”
  • “At 9:30 he would read the morning mail and write letters.”
  • “At 10:30, Darwin returned to more serious work, sometimes moving to his aviary or greenhouse to conduct experiments.”
  • “By noon, he would declare, ‘I’ve done a good day’s work,’ and set out on a long walk.”
  • “When he returned after an hour or more, Darwin had lunch and answered more letters.”
  • “At 3 p.m. he would retire for a nap; an hour later he would arise, take another walk, then return to his study until 5:30, when he would join his wife and family for dinner.”

So, if you want to know how to write 19 books and fundamentally change the way we think about human evolution, you might start by cutting back on the work hours! Alright, maybe it’s not that simple — I’m guessing that Darwin’s mind was hard at work even during his “down time.” In any event, Pang’s full article is a thought-provoking read and challenges the notion that a constant nose to the grindstone makes us more creative.

When technology eliminates jobs

The idea of the four-hour workday may be enormously appealing to those who enjoy flexibility in their work schedules and who are involved in creative endeavors that generate income based on the result rather than the time clocked in on a job. But what about the vast majority of workers whose livelihoods require being present on the job for x hours a day? What if their work literally disappears? Yuval Noah Harari writes for The Guardian:

Most jobs that exist today might disappear within decades. As artificial intelligence outperforms humans in more and more tasks, it will replace humans in more and more jobs.

 . . . The crucial problem isn’t creating new jobs. The crucial problem is creating new jobs that humans perform better than algorithms. Consequently, by 2050 a new class of people might emerge – the useless class. People who are not just unemployed, but unemployable.

If you want a prime example of how this is already occurring, consider corporate responses to fast-food workers who are advocating for a living wage: These workers are at risk of being replaced by robots. As Kate Taylor reports for Business Insider:

“It’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging french fries,” former McDonald’s USA CEO Ed Rensi said in an interview on Tuesday on the Fox Business Network’s “Mornings with Maria.” “It’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe.”

According to Rensi, rising labor costs are forcing chains to cut entry-level jobs and replace workers with machines. Currently, Wendy’s, McDonald’s, and Panera are rolling out kiosks across the US, in part because of the rising cost of labor.

Long hours by choice…or not

Here in America, we love to extol the virtues of the work ethic, and for better or worse, it shows. For example, Ben Steverman reported for Bloomberg last fall on a new study by economists Alexander Bick (Arizona State U), Bettina Bruggemann (McMaster U), and Nicola Fuchs-Schundeln (Goethe U) shows that Americans put in some of the longest work hours per week compared to their European peers:

A new study tries to measure precisely how much more Americans work than Europeans do overall. The answer: The average person in Europe works 19 percent less than the average person in the U.S. That’s about 258 fewer hours per year, or about an hour less each weekday. Another way to look at it: U.S. workers put in almost 25 percent more hours than Europeans.

This study adds to the continuous string of research studies documenting the long work hours put in by Americans, including a 1997 International Labour Organization report showing that “US workers put in the longest hours on the job in industrialized nations.”

Of course, many of those working long hours aren’t doing so by choice. As has been reported over and again in the news media, the overall state of the American economy and labor market is such that millions of workers have been compelled to take two or three lower-paying, part-time jobs in order to make ends meet.

I think we’re in quite a pickle here. Overwork — by choice or challenging circumstance — is sapping creativity, health, and overall well-being. Technology — a term that instantly causes some people to experience paroxysms of awe and wonder — threatens to make a lot of people unemployable. At the very top, a small number of people (think the McDonald’s ex-CEO in Taylor’s article) stand to grow increasingly wealthy from this dynamic.

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