Beyond The Big City Blues: The Importance of Low-Skilled labour


Photo: Flickr racoles

In my last post, I argued that we need to stop thinking about our inner city problems so heavily in terms of race. Racial problems in the U.S. contributed to the particular history of the urban underclass, and race can never be totally ignored in this country.

But the inner city today is haunted by three serious problems, none of which is racial in nature: a lack of jobs, an advanced state of social disintegration and decay, and the presence of the illegal drug industry.

There are no silver bullets for any of these problems; they were built up over many decades and progress at dismantling them will likely be measured on the same timescale. 

There are also no hundred per cent solutions to these problems; when Jesus said that the poor will always be with us, he knew what he was talking about.

Government is inevitably going to be part of the solution for these problems—if only by correcting so many of the misguided policies that in many cases make existing conditions worse. Drug policy and prison reform are inevitable parts of addressing inner city problems; the government’s role as the provider of medical services to the poor, and especially to poor children, should not go away.

But even as we work on getting the government side of the equation right, we need to realise that many of the most pressing problems of the inner city cannot be solved by the government. We can find ways to decriminalize drugs and to reform the legal system so that fewer young people are incarcerated for long periods for non-violent offenses, but government cannot mend broken homes or put addicts in touch with a higher power able not only to ease their craving for drugs, but to help them rebuild their lives. 

Government cannot take a nine year-old child who has never seen a healthy family and give the child the kind of psychological balance and strength children get from growing up in a loving and stable home.  All the social workers in the world can’t fix this stuff.

What goes on in some of these families and communities after generations of breakdown and decay needs a kind of healing and care that government programs can’t provide—especially in a country like ours, that for good and valid reasons, has chosen to separate church and state. 

Some demons only come out with fasting and prayer, and the U.S. government isn’t much good at either one.

Additionally, some of the government action required to change the inner cities is almost exactly the opposite of what urban advocates have historically supported. Blue model policies and their consequences often contribute to the problems of the inner city. Helping those cities often will require wrenching change in the way government works and in the assumptions behind government programs.

The one real policy success in many inner city neighborhoods in recent decades has been the restoration of some measure of safety and security by better police work. 

Thanks to smarter and faster law enforcement, the lives and property of the innocent and the weak are safer than they used to be. To get to that point, thinking and policy had to change. Some of these changes (like bringing more African-Americans onto the police force and improving relations between the police and community leaders) appealed to the left. 

Others, like having cops spend more time patrolling on foot or using computers to track crime so that police resources could be concentrated where they were needed most, were just common sense.

Others involved ideas from conservatives—like the idea that personal security is a civil right and that aggressive law enforcement in poor neighborhoods is a good thing. Government had an important role to play, but it could not play that role until the paradigm shifted, and government thought about its responsibilities in a new way.

To go beyond this success (and to get around some of its consequences including the very high incarceration rate of young Black men) we are going to need new thinking in a variety of fields. Stagnant ideas from the last century—some liberal, some conservative, some middle of the road—need to change.

Take economic development.

Currently, America’s largest cities are failing at the number one task that can help the inner cities: creating jobs. Between April 2001 and April 2011, Chicago, New York and Los Angeles lost more than 668,000 private sector jobs

Unless that changes and changes dramatically, our inner cities will continue to decay and millions of lives will be unnecessarily blighted. Worse, the millions of new immigrants now streaming into our cities in the latest Great Migration will form the nucleus of a new and larger underclass that could haunt this country for the next one hundred years.

The first and most important precondition for returning health to poor urban neighborhoods is the creation of large numbers of private sector jobs that relatively unskilled people can do. These jobs are unlikely to be in large scale manufacturing plants. The days when domestic manufacturing anchored an emerging urban working class and provided a ladder into the middle class are as dead as the days when family farms gave the majority of the American people secure livelihoods.

The idea that manufacturing will return and save us is, I fear, a snare and a delusion.  The road is closed.  Foreign competition is part of the story, but technology is the real driver. 

As factories become more automated, you can make more and fancier stuff with fewer people. Ending free trade will wreck our economy and the world economy, put the world on the road to World War Three, and give a boost to the robotics industry, but it won’t bring back the days of high wage unionized manufacturing labour in the United States.

Generally speaking, manufacturing employment is going to shrink in the U.S. over the medium to long term and large factories for big employers will be shedding workers as they update their technology rather than hiring. GM and GE will not propel the next generation of Americans into the middle class.

So where will the jobs come from?

Answer: if they come at all, they will come from small businesses, and many of these jobs will not be particularly attractive.

Businesses that hire low skilled workers without much experience or with checkered work histories are often smelly and noxious. They are unlikely to pay particularly well. There will be lots of casual day labour involved with not many benefits—and perhaps little information sent to the IRS. 

Casual construction work and small repair shops where people bang metal and use power tools all day long are the kinds of employers we need in the inner city. Working conditions are not always great—and these industries do not always attract the most humanitarian and generous people on earth. The factories that hired illiterate and unskilled urban workers 100 years ago were offensive from many points of view;  they did, however, actually hire those workers and put tens of millions of people on the thorny, difficult and uphill path toward middle class life.

Think of the path to successful middle class living as a ladder; the lower rungs on that ladder are not nice places to be, but if those rungs don’t exist, nobody can climb. When politicians talk about creating jobs, they always talk about creating “good” jobs.  That is all very well, but unless there are bad jobs and lots of them, people in the inner cities will have a hard time getting on the ladder at all, much less climbing into the middle class.

Many sensitive and idealistic people in our society work very hard to keep from connecting these dots and admitting to themselves that bad jobs are something we need. Quacks abound promising us alternatives (“green jobs” is the latest fashionable delusion), but ugly problems rarely have pretty solutions.

We need entry level jobs that will get people into the workforce, and we need ways that they can learn useful skills at affordable prices that will help them climb the ladder and move on.

To get these jobs, we have to change the way our cities work.

Essentially, we have created urban environments in which the kind of enterprises that often hire the poor—low margin, poorly capitalised, noisy, smelly, dirty, informally managed without a long paper trail—can’t exist. The kind of metal bashing repair shops that fill the cities of the developing world are almost impossible to operate here. 

Plumbers, carpenters, electricians, pushcart vendors and day care operators need licenses; construction work has to comply with elaborate guidelines and city bureaucracies disgorge the required permits slowly and reluctantly.

I know of a day care centre here in our ultra-glamorous borough of Queens that wanted to expand the services it provided to mostly low income families. To do that the centre needed to use a church basement.  The last I heard the staff had been trying for several years to get a definitive answer out of the city bureaucracy about whether this would be possible and under what conditions.

They had hired an “expediter” (a person who specialises in getting New York City bureaucrats to act slightly less slothfully than usual) for a cost they could not afford and still had no answer.

As a member of a coop board, I have learned that the building I live in frequently spends months and even years simply trying to get questions answered from the city about how to proceed with needed repairs.

Rich people and established businesses can survive this kind of thing; small businesses with no capital cushion and untrained, perhaps poorly educated proprietors cannot—but these are the only people who can generate the jobs the urban poor so desperately need.

The combination of a tangled thicket of regulations that interact with one another in unpredictable ways and a bureaucracy that for whatever reasons cannot manage the process in a timely way is a massive job killer.

The number of small enterprises that have not started, of small businesses that have given up on expansions or on simple repair jobs deferred is incalculable but large. Our cities are strangling themselves in red tape; we need to a better job of balancing the legitimate need for safety and health regulation with the need to promote enterprise and the kind of jobs that our fellow citizens can actually get.

Changing the way cities work matters a lot. If we want new businesses and new jobs in our inner cities, we are going to have to declare war on the cost structures of cities like New York and Chicago. The tax load must come down drastically, implying both a reduction in government activities and a revolution in the way services are provided. 

The forest of regulations that makes everything from opening a new business to repairing a building complex and expensive must be dramatically thinned. If we are serious about creating conditions in which workers with poor skills can make a living inside great cities, we have to move away from regulations and practices which make it prohibitively expensive to do business there.

When you travel around the world one thing you notice is that very often the worst countries in the world are the hardest to get into. Try getting visas for North Korea or Myanmar. Many of our cities act exactly like this: they are not very good places to do business—and they make you fill out pages of applications and wade through oceans of red tape before they will let you in.

The process of debating and evaluating regulations in our society is broken. We do not measure the full costs in lives blighted and hopes denied when employment dries up in poor neighborhoods and regions.  This imbalance in our measuring system needs to change.

Just as ecologists look at the externalities of factories and power generation, we need to measure the externalities of regulation: who pays for the cumbersome set of overlapping and usually illogical regulations that hamper business (and small business especially) in urban areas?  Who benefits?  Is this decent and fair and is it really what we want?

The air on the Upper West Side is sweet, and the fish are returning to the Hudson River. I am glad. The Hudson is now said to be safe for swimming; I plan to take a dip one of these days up by my rural retreat in the glamorous Dutchess County hunt country. 

But in New York City, throughout the Hudson River watershed and across the Erie Canal to Buffalo, large inner city populations have had their futures killed. The blue social model of high regulation, high cost economies is strangling America’s cities and wrecking the hopes of the poor.

The bien-pensant gentry politics that dominates political discussion in respectable circles has lost touch with the realities of American life and no longer really comprehends the issues at stake. To some degree this impoverished policy conversation reflects the declining financial and intellectual firepower of the private sector labour movement—itself a consequence of the automation driven transformation of American and world manufacturing. 

The “clean” wing of progressive politics has almost entirely driven the “smokestack” wing out of business, so that liberal policy discussions tend to revolve around quality of life issues primarily of interest to the upper middle class.

Adding to this problem is the capture of Democratic party power by the producers of government services as opposed to the (intended) beneficiaries. From New England to California, we are witnessing a series of bitter battles that pit the interests of public sector employees against the interests of those who depend on the services government provides: teachers’ unions versus schoolchildren, healthcare providers versus patients and so on.

Because public sector workers are among the best organised and most voluble constituency groups and poor people are among the least organised, the balance of benefit in many government activities has shifted over time to the deliverers.

“Progressive” policy now increasingly means policy that benefits genteel upper middle class liberals and public sector government workers; the resulting mix of complex and poorly applied regulations, high costs and high taxes throttles the only kind of job creation that could offer most inner city residents a feasible step up.

The answer is not a return to the sweatshops of the early twentieth century or to the rampant pollution of the past. 

The answer is a reconfiguration of government and a new commitment to rapid economic growth in our cities. Cities once prospered because they were the places where entrepreneurs found the best opportunities. Writers like Joel Kotkin have been exploring these ideas for some time and looking at ways in which cities, suburbs and exurbs can grow faster.

Kotkin grasps the most important facts about urban development today: Without rapid, small business led growth, there is no way that the residents of our inner cities can escape the cycle of poverty that has them in its grip. And progressive blue politics as conventionally understood systematically squeeze and crush growth in our cities. The bluer a city, the bluer a state, the fewer private sector jobs it tends to create.

Until our urban leaders grasp these truths, conditions in the inner city will continue to go downhill as more and more cities start to look more and more like Detroit.

None of this will help the underclass; none of this will help the poor.

This post originally appeared at The American Interest.

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