Research finds the domestic outsourcing of jobs leads to declining U.S. job quality and lower wages — Kate Bahn

The domestic outsourcing of jobs in the United States is fast becoming a dominant explanation for the destruction of the social contract of work, a historic concept in which norms of fairness and solidarity between firms and their employees played a major role in wage setting and workplace standards for some U.S. workers—though of course many others such as African American workers were consistently more marginalized. The destruction of this social contract, detailed in Brandeis University economist David Weil’s book The Fissured Workplace, describes a labor market structure in which workers are employed at firms with core competencies and then those firms subcontract out all other duties or specific functions in the production process.

Within daily work activities, U.S. workers may directly interact with other workers across a variety of firms with different levels of job quality. One prototypical example is janitorial work, where most office cleaners today are employed by a janitorial services company that is contracted by the building owner where individual office places lease their space. These kinds of fissured employment patterns have led economists and other social science researchers to examine a variety of empirical research questions about what has caused domestic outsourcing, what the impacts have been and for whom, and what the future of the firm will be.

This body of research lays the groundwork for U.S. policymakers to understand the impact of this domestic outsourcing phenomenon and what sort of policy solutions can ensure that economic prosperity is broadly shared as workers and firms alike consider “the future of work” in the United States....

The bottom line is that "the American dream" was based on a significant portion of the population being employed in relatively secure and well-compensated in manufacturing. Foreign outsourcing changed that and the US economy has been in flux ever since. The trend is toward concentration at and near the top, that is, the upper quintile, while the rest of the population available for work either stagnates or sinks. Another trend is domestic outsourcing, which has disrupted the previous concept of a secure job, essentially for life.

These are obvious trends in a liberal economic model ("capitalism") since they reduce costs and increase efficiency. However, they are also having a profound social impact, and therefore a political one as well, as life for many becomes more precarious. 

WCEG — The Equitablog
Research finds the domestic outsourcing of jobs leads to declining U.S. job quality and lower wages
Kate Bahn

Bill Mitchell — All net jobs in US since 2005 have been non-standard

The Australian labour market has been characterised over the last 12 to 24 months by the dominance of part-time employment creation with full-time employment contracting. Over the last 12 months, Australia has produced only 84.9 thousand (net) jobs with 107.2 thousand of them being part-time jobs. In other words, full-time employment has fallen by 22.2 thousand jobs over the same period. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development to name just a few disadvantages. Further, underemployment has escalated since the early 1990s and now standard at 8.3 per cent of the labour force. On average, the underemployed part-time workers desire around 14.5 extra hours of work per week. 

If we look at the US labour force survey data quite a different picture emerges, which is interesting in itself. Does this suggest that the US labour market has been delivering superior outcomes. In one sense, the answer is yes. But recent research based on non-labour force survey data (private sampling) suggests otherwise. That research finds that “all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.” That is, non-standard jobs have disappeared and are being replaced by more precarious, contract and other types of alternative working arrangements. The trend in the US has not been driven by supply-side factors (such as worker preference) but reflects a deficiency in overall spending. Not a good message at all.

Deconstructing the narrative that the US economy has returned to or is closely approaching "full employment."

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Bill Mitchell – billy blog
All net jobs in US since 2005 have been non-standard
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Bullshit jobs – the essence of capitalist control and realisation

... in the last few days I have done a few media interviews (radio) on an article that appeared in the local Fairfax press, but was originally published in the Strike! magazine as – On the Phenomenon of Bullshit Jobs by LSE anthropologist, David Graeber. The title in the local article had changed to “nonsense jobs” – a sign of the conservatism of our press. The interviews I did were interesting because the article brings together a number of strands that further expose the weakness of the economic theory taught to students in most universities. That is much more interesting to write about here than the tawdry realities of Australian politics at present which can be described as indecent ignorance.



David Graeber article seeks to investigate why the 1930 prediction by John John Maynard Keynes that by the Year 2000, “technology would have advanced sufficiently that countries like Great Britain or the United States would have achieved a 15-hour work week” has not materialised.

He might have just concluded – Capitalism and realisation of surplus value.....

Does he really answer his basic question – to explain why we are not all working within the technological limits – that is much less hours? He clearly doesn’t provide a good explanation despite the Op Ed being much longer than most. 

To really answer the question and to understand why neo-liberalism has become dominant we have to ground the explanation in the dynamics of the capitalist system, which is why most of the competitive neo-classical theory fails. The latter doesn’t differentiate between the unique characteristics of production systems and thus ignores key dynamics, which yield explanatory capacity.

Bill Mitchell – billy blog
Bullshit jobs – the essence of capitalist control and realisation
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia