Head of Columbia business school wants to flood labor market to suppress wages

From the solutions he offers to the labor challenges facing the U.S. economy in his article titled “Where Have All the Workers Give,” Glenn Hubbard must think that the problem is a lack of workers, not a lack of jobs.

Hubbard, dean of Columbia Business School, economic advisor to Mitt Romney and former chair of the Council of Economic Advisors under Bush II, is merely expressing the deepest fears of the business establishment: that when the Baby Boom generation retires, a shortage of labor will drive up wages as fewer people compete for a similar number of jobs.

Now to most people, the problem with the economy is that it is not producing enough jobs. The unemployment rate is still 6.7% and even Hubbard admits that large numbers of the long-termed unemployed have stopped looking for jobs. Plus there are all those underemployed, the hordes of twenty-something baristas and call center operators with college diplomas.  Now common sense would suggest that we need more jobs, but Hubbard believes the real challenges is to get those long term unemployed back looking for jobs—and driving down wages even more than the nose dive in buying power that most people’s compensation took over the past 30 years.

The article, which leads the Wall Street Journal’s Saturday “Review” section, bemoans all government efforts to stimulate the creation of more jobs except one: lowering corporate taxes.  Studies have of course long ago disproven the idea that lowering taxes gives job creators the funds to create more jobs, and that in fact raising taxes creates more jobs. But Hubbard prefers to live in a world of false notions passing as ideas, not one of facts. Or maybe the world of sound bites he mouths on his Fox News TV appearances.

While ignoring job creation, the good professor describes a complete program for creating more job-seekers:

  • Remove the so-called disincentives to work created by the Patient Protection & Affordable Care Act.
  • Make it harder to qualify for Social Security disability benefits, since without benefits, the disabled will have more incentive to seek employment.
  • Turn much of unemployment insurance into job training—in other words, take the money that those on unemployment insurance were going to use on food and rent and give it to community colleges and for-profit vocational schools for tuition. Keep in mind that a relatively small percent of employers are having trouble finding people with the skills their businesses need—maybe 15-20% of all unfilled jobs.
  • Eliminate taxes on those receiving Social Security and still working, so that seniors who rejoin the work force will be able to keep more of what they make, supposedly an incentive for the old warriors to strap on their gear again and earn a paycheck.

Of course, those seniors won’t be making that much, and certainly much less than now if Hubbard’s proposals became law.  Hubbard wants to force feed more workers onto the job market, but he proposes nothing to create more jobs.

Like most mainstream Republicans, Hubbard’s underlying interest in advocating these positions is to suppress the cost of wages, which in effect takes money from the poor and middle class and gives it to the owners and operators of businesses AKA the wealthy.  He is trying to undermine the first decent break that Generation X and the Millennials are getting from the 21st century economy—a shrinking work force.

Hubbard’s essay boils down to a declaration of class warfare—or should I say, to a strategic plan for the next phase in the 30+-year war of the wealthy on everyone else in the United States.

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