4 ms·

"Insecurity" in that quote is describing a perception on the part of workers which, the quote discusses, doesn't seem to be validated by actual job market data.

"Insecurity" in that quote is describing a perception on the part of workers which, the quote discusses, doesn't seem to be validated by actual job market data. In particular, Greenspan is offering it as a reason why there isn't as much wage inflation given the relative tightness of the labor market. He says workers aren't changing jobs to capture increases because they'd rather stay put. It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. A related, worthy question is why increasingly lower unemployment rates in the 90s (and even the 2010s) didn't show up in the Phillips Curve predicted increase in wages. My read of this quote is Greenspan speculating at an answer. I don't know if it's correct. I don't even know if economists today agree on an answer. In any case, he certainly doesn't seem to be cheering for precarity.

vkou 6y ago
> It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. [1] The answer to your puzzle may be that employers have become a lot better at bargaining, lobbying, and union suppression than they were a few decades ago. It may also be the case that the government has become better at maintaining a high enough level of unemployment (through monetary policy) to prevent workers from gaining too much in a boom economy. [1] Any of the tech folks on HN try asking to not be subjected to an open office hell, prior to this COVID thing? How great of a bargaining position did the software-engineer shortage give you in that conversation?
- shuckles 6y ago
  Plausible. Do you know if healthcare, higher ed, and housing are industries where cost trends are convincingly explained by neoliberalism, i.e. some combination of deregulation and promotion of free trade and free markets? Or are you saying that the problem of affordability in these sectors can and should be entirely resolved by higher wages?
  - dillonmckay 6y ago
    Well, all three are heavily subsidized by the government, so I would argue it is the opposite of the promotion of a free market and deregulation.
  - vkou 6y ago
    I wouldn't blame education costs or housing costs on neoliberalism, I'd blame them on availability of low interest, little down credit for housing and student loans. Which, while being a bit of a neo-liberal policy is not a cornerstone of neo-liberalism (nor is even controversial among the left, much to my chagrin). Medical care is, of course, it's own awful mess. Higher wages wouldn't fully solve either problem on a society-wide level. If you chang nothing else, I'd expect that costs of all three would rise until they soak up every spare penny of the middle class.
- nl 6y ago
  > Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. Noting that this was in 1997, this is basically the same point Greenspan was making - he is speculating they felt insecure and so weren't willing to do things like go on strike. It seems a reasonable theory although it's difficult to test if it is correct or not. Either way, it most certainly doesn't indicate that Greenspan saw this insecurity of workers as a goal.
  - vkou 6y ago
    So, to make a different criticism from Chomsky, I will note that regardless of whether insecurity of workers is an end goal, an explicit goal of the fed is to maintain 'low' but non-zero unemployment. This, at least, is well-documented. The left, naturally, points to that as an example of how the government is actively taking steps to depress the labour market (during good economic conditions). Would you find that criticism to be more on-the-nose than Chomsky's claim?
    - shuckles 6y ago
      The Fed’s goal is in fact to promote maximum employment, and a non-zero unemployment rate is necessary for that: https://www.federalreserve.gov/faqs/money_12848.htm https://www.federalreserve.gov/faqs/money_12848.htm Related to the discussion on insecurity, it is a good outcome to have an economy where people quit jobs and spent months on a careful job search. 0% unemployment means that nobody does that.
      - vkou 6y ago
        The link fails to argue for why it is necessary for that. Instead, it just says that's the fed's mission. > it is a good outcome to have an economy It's a good outcome for employers, not employees. If I can quit my job in the morning and get one I'm happy with before lunch, that's good for me - but it also means that employers are desperate for labour. A sober, careful, multi-month job search is not a good thing for most people. They can't afford it, because they have bills to pay this month, not next year.

vkou 6y ago

> It's worth asking why workers felt insecurity when the statistics suggested there shouldn't be any. Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. [1] The answer to your puzzle may be that employers have become a lot better at bargaining, lobbying, and union suppression than they were a few decades ago. It may also be the case that the government has become better at maintaining a high enough level of unemployment (through monetary policy) to prevent workers from gaining too much in a boom economy. [1] Any of the tech folks on HN try asking to not be subjected to an open office hell, prior to this COVID thing? How great of a bargaining position did the software-engineer shortage give you in that conversation?

shuckles 6y ago
Plausible. Do you know if healthcare, higher ed, and housing are industries where cost trends are convincingly explained by neoliberalism, i.e. some combination of deregulation and promotion of free trade and free markets? Or are you saying that the problem of affordability in these sectors can and should be entirely resolved by higher wages?
- dillonmckay 6y ago
  Well, all three are heavily subsidized by the government, so I would argue it is the opposite of the promotion of a free market and deregulation.
- vkou 6y ago
  I wouldn't blame education costs or housing costs on neoliberalism, I'd blame them on availability of low interest, little down credit for housing and student loans. Which, while being a bit of a neo-liberal policy is not a cornerstone of neo-liberalism (nor is even controversial among the left, much to my chagrin). Medical care is, of course, it's own awful mess. Higher wages wouldn't fully solve either problem on a society-wide level. If you chang nothing else, I'd expect that costs of all three would rise until they soak up every spare penny of the middle class.
nl 6y ago
> Probably because they aren't saving enough to be able to weather bad times, because a serious medical issue may ruin them, because no matter how much you save, housing, college, and medical costs will grow in tandem, and because despite official unemployment being low, most employers aren't willing to compromise on worker-hostile policies. Noting that this was in 1997, this is basically the same point Greenspan was making - he is speculating they felt insecure and so weren't willing to do things like go on strike. It seems a reasonable theory although it's difficult to test if it is correct or not. Either way, it most certainly doesn't indicate that Greenspan saw this insecurity of workers as a goal.
- vkou 6y ago
  So, to make a different criticism from Chomsky, I will note that regardless of whether insecurity of workers is an end goal, an explicit goal of the fed is to maintain 'low' but non-zero unemployment. This, at least, is well-documented. The left, naturally, points to that as an example of how the government is actively taking steps to depress the labour market (during good economic conditions). Would you find that criticism to be more on-the-nose than Chomsky's claim?
  - shuckles 6y ago
    The Fed’s goal is in fact to promote maximum employment, and a non-zero unemployment rate is necessary for that: https://www.federalreserve.gov/faqs/money_12848.htm https://www.federalreserve.gov/faqs/money_12848.htm Related to the discussion on insecurity, it is a good outcome to have an economy where people quit jobs and spent months on a careful job search. 0% unemployment means that nobody does that.
    - vkou 6y ago
      The link fails to argue for why it is necessary for that. Instead, it just says that's the fed's mission. > it is a good outcome to have an economy It's a good outcome for employers, not employees. If I can quit my job in the morning and get one I'm happy with before lunch, that's good for me - but it also means that employers are desperate for labour. A sober, careful, multi-month job search is not a good thing for most people. They can't afford it, because they have bills to pay this month, not next year.