Say Goodbye to the Middle Class

New York Stock Exchange (Photo by Maurice Pinzon)

New York Stock Exchange (Photo by Maurice Pinzon)

By Maurice Pinzon
Mayor Michael R. Bloomberg announced today that private developers would invest $175 million for a facility to be built at the site of the former Flushing Airport in Queens. According to a statement from the Mayor’s Office, 420 new jobs are expected to be created between five and seven years from now, as a result of this project.

Mayor Bloomberg is taking his role as CEO of New York City very seriously (at a recent event the developer Bruce Ratner called him a good politician and the greatest businessman of the last 50 years) and announcing project after project to stimulate direct and subsidiary job creation. But it is not clear whether they are the types of well paying jobs the city needs to stem the loss of higher paying jobs over the last four years.

Indeed, Mayor Bloomberg’s central role in projects such as the Nets Arena in Brooklyn, the Jets Stadium on the West Side and the quest for the Olympics, indicates how much help the private sector needs from government to create any new jobs.

In an analysis New York City Comptroller William C. Thompson Jr. issued late last month, he said, “The City lost 800 private sector jobs, seasonally adjusted, in December, as the City’s unemployment rate rose to 7.9 percent.” He added, “Furthermore, these decreases were from a November base that was revised downward by 500 jobs by the U.S. Bureau of Labor Statistics.”

It is ironic that as Mayor Bloomberg touts a city with historically low crime rates, a portion of the middle class may be disappearing, not because it is fleeing crime in the city as it did during the 70’s, but because it may not be able to sustain itself economically in New York City.

Stanley Aronowitz, a sociology professor at the CUNY Graduate Center, explained why in an extensive interview with New York New Network.

Professor Aronowitz, who is the author of numerous books, including The Jobless Future, said that in his upcoming book he argues that there are three main reasons why people are confused by a recovering economy that creates few jobs ”” jobs that pay little.

Mr. Aronowitz argued: “The whole outsourcing phenomenon distorts the picture of what the relationship is between economic growth and job growth.” Companies may be spending more money on production, but the production is taking place in Mexico, and even Mexico is not competitive when it is compared with the lower wages in China.

The lost jobs, however, are not only in manufacturing, but also in high-end technology. Mr. Aronowitz said, “India and China have software engineers and systems analysts and programmers as competent as anybody we’ve produced in the United States.” Mr. Aronowitz said that people receiving technical training at community colleges and senior colleges alike to become workers in this country’s new economy will have to ask themselves whether choosing a narrow technical education at the expense of a broad, flexible liberal arts education was really a sound social decision.

Mr. Aronowitz said the dot-com bust and the argument of Robert Reich, the former Secretary of Labor in the Clinton administration, that higher paying analytical work would supposedly take place in the United States, did not happen for very long. “That happened for a flip of the eyelash, but it basically went down the drain in the early part of the turn of the 21st century,” Mr. Aronowitz said.

In addition, retail sector jobs, which pay only minimum wages and provide few benefits, are not growing at a very fast pace, Mr. Aronowitz said

Mayor Bloomberg has insisted at numerous economic development announcements that since manufacturing jobs are no longer available, he is supporting development projects across the city. He said that these positions, which include tourism and jobs of the future, are the types of jobs the mayor said new immigrants will use as their new economic stepping stone. But these jobs are not the jobs the middle class lost in the recent recession.

According to Mr. Aronowitz, the reason why most jobs will neither return nor be created, is that “productivity is really about technological change,” which means that new technologies are cheaper than workers. In addition, employees are working more hours, allowing the company to freeze hiring so that they do not have to pay for new employees’ accompanying benefits.

Economic indicators have charted a dramatic increase in productivity. Mr. Aronowitz said that this is all possible “because technological change is really about destroying jobs.”

Mr. Aronowitz added: “So the jobs that are being created during this last three years of the Bush administration are fundamentally low paid, close to minimum wage jobs ”” in the majority ”” and at the same time, they are much, much fewer than the jobs that were created in the Clinton era.”

Bruce Bernstein, president of the New York Software Industry Association, said that technology created more jobs because “the percentage of overall value added to the world economy represented by software only increases over time because more and more products have technology embedded in them.”

Mr. Bernstein added, “It becomes a competition among regions in and outside the U.S, between China, India and other regions within the U.S. But the overall value added in the world economy increases, hence the jobs.”

How this will play out in the worldwide economy is a complex question of rapid change.

Nevertheless, a report issued by the Fiscal Policy Group early last month supports Mr. Aronowitz’s more specific argument. The report states that “the average wage for the industries losing job share was much greater, $54,537, since three broad industries paying above average wage (Durables, Manufacturing, Information Services and Professional and Business Services) together lost 118,000 jobs from November 2001 to November 2003.”

The report also said the following: “On average, industries gaining jobs in New York State pay $20,500, or 38 percent less [in salary] than the industries losing jobs in the two years since the national recession officially ended.”

A call to New York City’s Economic Development Corporation was not returned before this article was posted.

This entry was posted in Economy, Government & Politics. Bookmark the permalink.