Makin' Money

It’s Not Your Fault

Chris Farrell Oct 14, 2011

Some 23 million Americans are unemployed and working fewer hours than they would like. The worst labor market since the 1930s is harsh on everyone from newly minted college graduates to laid off production workers.

Paul Osterman is an advocate for strong actions to ignite job growth by getting the econonmy going again.

The professor of human resources and management at MIT is also deeply concerned about the economy’s longer term inability to create lots of jobs that pay a good enough wage to support a family, own a home, save for retirement and participate in other aspects of a good life in America.

He recently co-authored a book with the late Beth Shulman, Good Jobs America: Making Work Better for Everyone.

The authors vigorously argue for a much greater government role in constructing incentives that would lead employers to create better jobs and employees live better lives. They’re tackling the right problem.

Still, the first thing to do is to get people back to work.

Paul Osterman: Fourteen million Americans are unemployed and nine million are working in part-time jobs although they want, and need, full-time employment. Obviously people are not succeeding in today’s job market. What should they be doing to improve their prospects? Too often we, and they, focus on self-improvement. The challenges we face today are collective and political, not private and individual.

A core American value is self-reliance, a theme that has resonated from the refined world of Emerson to the rough environment of the frontier. In our individualistic culture we assume that we are responsible for our success, or failure. There are many virtues to this view, not the least of which is the high level of American entrepreneurship that has created millions of jobs. But this focus on individual responsibility can also blur reality and lead people into privatized individual efforts to solve what is really a common problem.

The private individual response to unemployment and underemployment is to get more education and training and to improve job search strategies by doing everything from networking with friends and acquaintances to writing a better resume. There is nothing wrong with any of this and clearly self-improvement is a good thing. But these strategies simply will not solve the problem. If everyone got more schooling and wrote better cover letters the unemployment rate would hardly budge.

Today’s unemployment and under employment can only be addressed through national policy. The call to get government out of the way is exactly wrong. The claim that if government stood aside, or eliminated regulatory uncertainty, firms would hire and produce more implies that there is unmet demand out there for goods and services yet this is implausible on the face of it as any store owner or home seller will tell you. The fact that prices are not rising, as they would if people were trying to buy more goods but can’t find them, only serves to seal the point. The reality is that there is not enough demand for products. Government needs to prime the pump.

American belief in individual responsibility is in many ways a very good thing. The fluidity and mobility that in normal times we see in our job market is a source of great strength. But this belief can also get in the way of clearly seeing what needs to be done in times of crisis and this is very much one of those times.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.