Wednesday, September 7, 2016

What's Wrong With Greensboro?

Our local economic development "gurus" and elected "leaders" will be quick to give you all kinds of excuses as to what has gone wrong in Greensboro. Some will say it is the loss of tobacco, textiles, furniture.... you name it, whatever we used to do here that is no longer done here.

But when you look at total employment since January 2008 as shown in this graph by local economist Andrew Brod, it becomes apparent that our part of North Carolina lags behind not only the rest of the nation but the rest of the state as well.

So what happened locally? To figure that out we must first ask ourselves what happened nationally.

In an article titled, ‘X’ Marks the Spot Where Inequality Took Root: Dig Here. Stan Sorscher. Board Member of the Economic Opportunity Institute writes:

"The Depression and World War II defined that generation’s collective identity. Our national heroes were the millions of workers, soldiers, families and communities who sacrificed. We owed a national debt to those who had saved Democracy and restored prosperity. The New Deal policies reflected that national purpose, honoring a social safety net, increasing bargaining power for workers and bringing public interest into balance with corporate power.

In that period, the prevailing social contract said, “We all do better when we all do better.” My prosperity depends on your well-being. In that period of history, you were my co-worker, neighbor or customer. Opportunity and fairness drove the upward spiral (with some glaring exceptions). Work had dignity. Workers earned a share of the wealth they created. We built Detroit (for instance) by hard work and productivity.

Our popular media father-figures were Walter Cronkite, Chet Huntley, David Brinkley, and others, liberal and conservative, who were devoted to an America of opportunity and fair play.

The sudden change in the mid-70’s was not economic. First it was moral, then social, then political, ….. then economic.

In the mid-70’s, we traded in our post-World War II social contract for a new one, where “greed is good.” In the new moral narrative I can succeed at your expense. I will take a bigger piece of a smaller pie. Our new heroes are billionaires, hedge fund managers, and CEO’s."

Mr Sorscher goes on to write with a couple of well done graphics of his own:

"In this narrative, they deserve more wealth so they can create more jobs, even as they lay off workers, close factories and invest new capital in low-wage countries. Their values and their interests come first in education, retirement security, and certainly in labor law.
We express these same distorted moral, social and political priorities in our trade policies. As bad as these priorities are for our domestic policies, they are worse if they define the way we manage globalization.
The key to the treasure buried in Figure 1 is power relationships. To understand what happened, ask, “Who has the power to take 93% of all new wealth and how did they get that power? The new moral and social values give legitimacy to policies that favor those at the top of our economy.
We give more bargaining power and influence to the wealthy, who already have plenty of both, while reducing bargaining power for workers. In this new narrative, workers and unions destroyed Detroit (for instance) by not lowering our living standards fast enough.
In the new moral view, anyone making “poor choices” is responsible for his or her own ruin. The unfortunate are seen as unworthy moochers and parasites. We disparage teachers, government workers, the long-term unemployed, and immigrants.
In this era, popular media figures are spiteful and divisive."

He also writes:

"Our policies have made all workers feel contingent, at risk, and powerless. Millions of part-time workers must please their employer to get hours. Millions more in the gig economy work without benefits and have no job security at all. Recent college graduates carry so much debt that they cannot invest, take risk on a new career, or rock the boat. Millions of undocumented workers are completely powerless in the labor market, and subject to wage theft. They have negative power in the labor market!
We are creating a new American aristocracy, with less opportunity – less social mobility and weaker social cohesion than any other advanced country. We are falling behind in many measures of well-being."

So what happened to Greensboro? We just got a bigger dose of the illness Mr Sorscher describes than the rest of the country did. Our local elites are more entrenched and have greater control than in most other parts of the country and therefore push us farther down as shown by the graph supplied by Andrew Brod.

And finally, Mr Sorscher closes with:

"X marks the spot. In this case, “X” is our choice of national values. We abandoned traditional American values that built a great and prosperous nation. Our power relationships are sour.

We can start rebuilding our social cohesion when we say all work has dignity. Workers earn a share of the wealth we create. We all do better, when we all do better. My prosperity depends on a prosperous community with opportunity and fairness."

Funny, that's exactly what my platform for Mayor of Greensboro is all about.