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Joseph Stiglitz, Nobel Prize-winning economist and Columbia University professor, is my guest on this episode of Work in Progress.
The ability of the economy to return to where it was at the end of 2019 is going to become more and more difficult—and the long-term effects on the economy will be more devastating—if we don’t do something now to protect the most vulnerable workers among us now, Stiglitz tells me.
The most vulnerable are the home health care workers, the retail clerks, restaurant workers, delivery people—anyone who makes the current minimum wage, he says.
“One of the real ironies is that workers we deem ‘essential’ are among the people who are the lowest paid and are at the greatest health risk. Let me just emphasize that inequity because it shows up not only in low compensation, but they are getting the disease because they have preexisting conditions, and they are more exposed. So the inequities are one on top of the other,” he says.
Stiglitz argues that health care is important economic factor, equal to livable wages.
“One measure of the health of a society is looking at the health of the people. If the people aren’t healthy, you don’t have a healthy workforce…Health inequalities in the United States are enormous, much larger than in other advanced countries.”
We discussed how the COVID-19 pandemic has exposed some of the already-existing weaknesses in the labor market, including underemployment. While the headline numbers showed a 3.8 percent jobless rate in the early part of the year, the fact that there were so many people who were struggling by on low-wage jobs, low-skill jobs, working multiple jobs, was often overlooked in the conversation around employment.
So, what will the workforce look like—and what needs to be done to restart the economy—post-pandemic?
“Clearly the pandemic has really made us aware that we don’t have to do as much traveling as we used to. We can do a lot of things through Zoom and other technologies. But it’s also made us appreciate how valuable real person-to-person interactions are. We miss them. So we’ve learned both,” he tells me.
“I don’t think we’re going to move totally onto Zoom, or totally leave our brick and mortar stores, but there’s undoubtedly going to be a shift. That change may actually make the problems that existed before the pandemic even worse. It will reduce some of the demands for the unskilled labor and at the same time, help those who have the skills and the kinds of jobs that can be done through the Zooms and these kinds of technologies.”
Upskilling that under-skilled labor force is necessary, but it’s not sufficient, Stiglitz says.
“We have to upskill, but we also have to change the rules of the game. 40 years of writing the rules of the game to advantage those at the very top. We now have to reverse that and rewrite the rules to make our economy work for ordinary Americans.”
That, Stiglitz argues, will mean raising the minimum wage for essential workers and providing health care for all.
If not, he says, “I see a lot of suffering. One of the things we know is that that suffering has long term consequences. The children in the families are going to suffer and when they suffer, that means our productivity in coming years will be lower than it otherwise would have been.”
It won’t just be the individual who suffers, he argues. “From the macroeconomic point of view, the ability of the economy to return to where it was at the end of 2019 is going to become more and more difficult. It will be longer and longer and longer before we get back to December of 2019.”
You can listen to the full conversation with Stiglitz here, or download the podcast wherever you get your podcasts. Thanks for listening.
Photo of Joseph Stiglitz courtesy of Daniel Baud and the Sydney Opera House.
Episode 150: Joseph Stiglitz, Nobel Prize-winning Economist, Columbia University
Host: Ramona Schindelheim, Editor-in-Chief, WorkingNation
Producer: Larry Buhl
Executive Producers: Joan Lynch, Melissa Panzer, and Ramona Schindelheim
Music: Composed by Lee Rosevere and licensed under CC by 4.0.
You can check out all the other podcasts at this link: Work in Progress podcasts