Here's the final paragraph from a Harold Meyerson WaPo op-edder on downward mobility in the modern US-
Our economic woes, then, are not simply cyclical or structural. They are also - chiefly - institutional, the consequence of U.S. corporate behavior that has plunged us into a downward cycle of underinvestment, underemployment and under-consumption. Our solutions must be similarly institutional, requiring, for starters, the seating of public and worker representatives on corporate boards. Short of that, there will be no real prospects for reversing America's downward mobility.
One of the problems of avoiding downward mobility is that it tends to restrict upward mobility as well. If your wages and benefits are guaranteed indefinitely, few new opportunities for people will open up, for jobs become fixed costs that can't be easily shed; firms will tend to use mechanization rather than human labor since you don't have to pay a robot benefits or severance pay. The people with jobs might like such a set up, but the people on the outside looking in will be stuck looking.
I was reminded of the old Chinese term of the iron rice bowl-"an occupation with guaranteed job security, as well as steady income and benefits." When China modernized in the 1980s and moved away from the old Maoist collectivization, Deng and his reformist bloc scrapped the iron rice bowl.
Iron rice bowls are nice, but most of us would want a more varied diet. That requires some upward mobility to earn a living that gets more than rice on the menu.
It also requires the prospect of some downward mobility if a business needs to retool; one of the downsides of the iron rice bowl of the Mao era was that money-losing operations sucked money from the government to stay open. Market economies saw such money-losers scrapped and their workers moved to more fruitful spots.
The solution to downward mobility is a combination of good education, a thriving economy and enough of a safety net to catch people on the wrong end of Shumpeter's creative destruction. A European-style worker-owner condominium is an institutional response, but one that institutionalizes the economy, sapping upward mobility in the process.
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