Archive for November 6, 2010
The Myth of Iowa Jobs
by Paul Deaton
mythology is being created of a small business owner, who gains
experience in making a payroll and is self sufficient. It is a modern
day re-enactment of the stories of Thomas Edison, the Ringling Brothers
and Horatio Alger. According to economists, these entrepreneurs will
drive job growth during the recovery…“
The days since the election have been busy with work delayed until “after the election.” For some of us, it is the work of peace and justice, of veterans, of labor and of faith. It is work on how we will resolve conflict in our community on issues that include immigration, clean air and water, and simple things like dogs barking in the neighborhood and backyard burning of household trash. There is plenty of work to do.
The focus of the recent election has been on another kind of work, “jobs.” By that, the politicians mean work that pays a living wage, enabling people to get by, maybe prosper, and pay taxes into the state and federal treasuries. According to them, the economic recovery depends on jobs. The rhetoric of jobs has shifted to the idea of small scale entrepreneurship from working for someone else. Read what you want into this, but in most cases, it does not mean union jobs, as unions continue to be in decline. It means individuals taking more of the risk of finding paid work upon themselves. This rhetoric of jobs seems more myth than reality.
A mythology is being created of a small business owner, who gains experience in making a payroll and is self sufficient. It is a modern day re-enactment of the stories of Thomas Edison, the Ringling Brothers and Horatio Alger. According to economists, these entrepreneurs will drive job growth during the recovery, something politicians from the president on down mentioned as being important before the election. These myths are flawed.
According to Scott Shane, author of The Illusions of Entrepreneurship, “most people like these myths. Some of them appeal to our love of the heroic…Others appeal to our sense of voyeurism, giving us a window on a life that seems exciting and exotic.” Because we like these myths, they get repeated time and again to each other, in books, magazines and in other mass media. With repetition, we start to believe the mythology of the sole proprietorship entrepreneur who will save the economy. If that's the case, we had better buck up for a harsh future.
According to Shane, “the typical American entrepreneur is a married white man in his forties who attended but did not complete college. He lives in a place like Des Moines or Tampa, where he was born and has lived much of his life. His new business is a low-tech endeavor, like a construction company or an auto repair shop, in an industry where he has worked for years. The business that a typical entrepreneur has started is a sole proprietorship financed with $25,000 of his savings and maybe a bank loan that he guarantees personally. The typical entrepreneur has no plans to employ lots of people or to make lots of money. He just wants to earn a living and support his family.” As Blog for Iowa has written, this typifies the Republican outlook for the future, a return to the past.
During a recent conversation with a neighbor and real estate agent, we discussed the state of the housing market. What he said was revealing. Large, well financed companies will survive and thrive, while small scale entrepreneurs who build spec houses have gone out of business. This is true in real estate, and in other industries. Being a well capitalized corporation carries inherent advantages, the most significant of which is survival in difficult economic times. The small scale business operator lives a life of bust and boom in which the future is uncertain. He is vulnerable to market forces that favor the wealthy and well capitalized. Small scale entrepreneurship can be a life of worries, more complicated than punching a time clock. Do people even punch time clocks any more? That's the point. We are heading away from hourly wage earning jobs as they are exported or off-shored.
In 1832, Lydia Child wrote the book The American Frugal Housewife. In it she wrote, “self denial, in proportion to the narrowness of your income, will eventually be the happiest and most respectable course for you and yours. If you are prosperous, perseverance and industry will not fail to place you in such a situation as your ambition covets; and if you are not prosperous, it will be well for your children that they have not been educated to higher hopes than they will ever realize.” In a consumer society, where many leverage their credit to live beyond their means, it is difficult to accept Child's view that lowering expectations for our children is something we should consider. It may be where Iowa is heading.
As Governor Branstad takes office, Iowa will be entering such a world of diminished expectations, especially when we peel away the myths being perpetuated by the talk about jobs, self reliance, traditional family and the second amendment. In the end, the Republican vision for our future is a place where the rich get richer and the rest of us do work that is increasingly underpaid and geared towards serving the joint masters of government and monied interests. There will be plenty of work for middle class people. The question is whether we will be able to earn a living wage while doing it. That remains an open question.