How the job market got so broken

31:57They can now get the work done so cheaply by low-paid workers over there. Plus, the Chinese government is eager to bring the jobs, gives them all kinds of help. It's so profitable, they're still ahead, even though they now have to pay the cost of a shipper of freight, a boat, to bring all that crap back. You can see how profitable it was. Jobs are gone. Second, automation. It's the era of the computer. First, the computer, then the robot, and now artificial intelligence. Three major technical breakthroughs allowing the employer to fire the worker and replace the worker with the machine. And this is as old as capitalism.

32:46It's really important that you understand this is profit-driven. And who are the workers? If you understand this, you can do an enormous service to American politics. Who are the workers that the employer is most interested in getting rid of by either moving to another country or replacing him or her with a machine? The answer, the highest paid worker. That's the one you want to get rid of. Well, who were the highest paid workers in the 1970s, 80s, and 90s? Here we go. White, male, Christian union members. Those are the ones who had risen to the top in our sexist, racist culture for the last 200 years.

33:34Women, service jobs, lower paid jobs, retail jobs. Come on. Black people, same story. Brown people, same story. So who gets really hit with this capitalist move? Answer, the mega world, the core constituency of Mr. Trump. White, male, Christian union workers. Maybe not so many union workers. That depends on the power of the union to influence them. But plenty of union workers have been voting for Mr. Trump to the chagrin of the labor movement and of the Democratic Party, who took all those people for granted. But those are the two major things that discombobulated the whole thing. The Democrats could have become the champions of stopping this.

34:27They didn't. It's very important. They failed. They are a failed political party. The Republicans cashed in. The Republicans are just as responsible. They were cheerleading, going abroad. That was globalization. And we were all going to have the benefit of cheap underwear because it was made in China. And we do. You've noticed that, right? Our underwear, really, seriously, is cheap. Our clothing is cheap. Our shoes are cheap. Very important to American capitalism. Why? Because it's over. The Chinese aren't going to send us cheap anymore. They don't need to. They're a bigger, more powerful economic unit now than we are.

35:11The world is completely different from what it was 20 years ago. But most Americans live in what my psychotherapist wife teaches me is denial. Americans do not want to see this. They don't see it. So, you know, they have 800 theories of what's going on. But you can see the disorientation if you understand the economics. Because, of course, what should have happened is that the white male Christian union men should have pointed the figure of blame at the corporate CEOs, who are the ones who made the decision to automate or to leave. Those corporate CEOs have American flags on their truck, but they abandoned the United States when it proved profitable to do so.

36:02But white male Christian Americans never got the chance to blame the corporations. Why? Because it's not allowed to talk like that in the United States. The Republicans don't talk like that. The Democrats dare not talk like that. Who do you have? You have socialists and people like me. We talk about it all the time. But what happened instead was genius. I mean, not Mr. Trump, but some of his advisors who saw in the rage of those white male Christian unionists a political opportunity unlike anything else available to them. So they jumped right in, and they had an answer for the white male Christian union man.

36:50You know what causes your problem? Two things. Number one, immigrants. What? A country of 330 million people is not having its economy shaped by 10 to 12 million undocumented immigrants. That's total bullshit on a scale that if a student handed that in, my right-wing professor would give him an F, let alone me. But the genius you made it were, invasions are coming. They're taking away our job. You spoke to the rage by scapegoating some person you made a plausible evil. And then the Democrats, they're bringing them in to get votes from those immigrants, you'll see. So it's a plot of the immigrants and the Democrats.

37:41They're the ones you should hate. So they do. And the big corporations give them a pass. And the Democrats, who had the chance of a lifetime, be the ones to stand up and say, it's the corporate leaders. You know that. You go to work every day. You know who makes the decisions because you know it's not you. They tell you what door to come in and out. They tell you what bathroom to pee pee? Stop. You know what the story is. The Democrats could have come in. They could have. Two of them did. Bernie and Alexandria Ocasio-Cortez. They at least said it. Didn't say it as often as they could have, but give credit where it's due.

38:24But they are two little voices in a Democratic party that tries to keep the lid on them all the time anyway. Meanwhile, Trump had the public relations sense to be able to at least speak to the feeling of disillusionment that people had, speak to their economic suffering and then divert their attention away from the corporations to immigrants and other groups. He saw the opportunity and he took it. You know, it is so pathetic. And I don't want to waste your time, but a tariff, which is his signature thing, a tariff is a tax. So notice with me that the Republican Party, of which Mr. Trump is the leader, has distinguished itself for the last century in being the political party against taxes.

39:13They're forever running. I'll lower your tax. Mr. Trump is hitting the American people with an enormous new tax. Talk about showmanship. He's getting away with that. Everybody who used to support the Republicans because they were anti-tax now supports them with a tax. Now, he's had to do some extraordinary things. For example, when you listen to him, he keeps saying, tariff, I'm going to get the Chinese with this tariff. Chinese people don't pay tariffs in America. The only people who pay tariffs to the United States are Americans. So he fudges it, right? He needs to tax everybody, which is why, by the way, our prices are going up.

40:01This is a tax on the American people and American business by the Republican anti-tax party. And no one says anything. Talk about ideological befuddlement. And the Democrats, where are they? They're asleep. They're not doing anything. You know, Italy, I don't know if you follow these things, Italy had a general strike last week. The whole country shut down. Why? Because the unions who led the general strike were in turn led by the very large and powerful dock workers union. And why? Because the dock workers union had already stopped loading any boat that was going to or from Israel in protest against the horror of Gaza.

40:50I mean, whether you agree with that or not is not my point, but you're seeing the French government collapse yesterday morning. This is a prime minister who had been in the job 26 days, and he's already resolved. Everything's falling apart. All I want you to get in your heads, please, we're falling apart. This society is not different. It is the same thing. And for the same reasons, we're turning on each other, pointing the finger of blame rather than figuring out, whoops, we got a problem here, which we can either handle by beating each other up or by getting together and sitting down with who the new big kid on the block is.

41:39Unless anyone misunderstand me, it's China. It's the brick. That is the up-and-coming part of the world. And again, whether you like them or not, I could care less. Are there problems in China? Loads of them. They're not a perfect society. No one needs to imagine that, least of all the Chinese. They're very smart. They work very well. They're doing fantastically. The record of the last 40 years, as grim as it is about the United States, is virtually euphoric about China. And I'd be the last one to tell you that. But it's true. And what's the point in pretending otherwise? The average wage in China of the worker has gone up four times in the last 25 years.

42:27The average wage of the United States has gone up about 10 percent. You understand, this is not a sustainable arrangement in the world. And we're living through a half-blind denial refusal. And we have a president will act like he's somebody from the 1960s or 70s when the United States did have the dominant position. It doesn't have it anymore.

43:09I just wanted to jump in with a follow-up that we had about everything we were just talking about with the tariffs. You know, as you're saying, obviously, this is like a big part of his economic agenda, you know, ostensibly to raise more money for the government, strong arm businesses into bringing jobs back home. But, you know, ideally bringing about what he's touted as a kind of reindustrialization of America. You've been very outspoken both on here and elsewhere about how this will not work. But can you talk a little more about is the issue with using tariffs in and of themselves? Like we know that leftists like Bernie and even Joe Biden have also supported forms of economic protectionism.

43:47Or is it more the specific way that Trump is using them? No, I'm afraid Mr. Biden was not one inch closer to solving the problems than Mr. Trump. That's why Mr. Biden, or for that matter, Kamala Harris, lost. Because a lot of the people that normally would have voted for them didn't. They had no reason to. Nothing was happening that was giving them a better feeling about their own situation or what was facing their children down the pike, et cetera, et cetera. And Mr. Trump doesn't either. What you're watching is lots of well-choreographed political theater that has nothing to do with the reality.

44:28I can show it to you very easily. If Mr. Trump is going to succeed, or if Mr. Biden was, in bringing industrial jobs back to America. He would have to make America a very attractive place to do that. Now, he didn't do that. Putting a tariff doesn't make the United States attractive. What it does is make it more expensive if you're producing the shirt in China, because when it's sold at Walmart or Target, it has to carry the tax on it. Meanwhile, however, the same Mr. Trump, who's trying to get the businesses, he says, to come back and doing it by hitting them with a tariff is doing things inside the United States that make it monumentally unattractive for any executive in his right mind to come here.

45:25Let's start. The government shut down. That's the biggest red flag you could wave in the face of a CEO of any company. I'm John Smith. I'm the CEO of something with a factory in China. I see that my president wants me to put it back in Chicago and leave China. I'm not going to do that if the government isn't working here, if the two major parties are at each other's throats, threatening each other with prison or worse. That's a red flag. Here's another one. The country is sending its own troops into its own cities. What? What? You want me to move my factory closer to that? You got to be crazy.

46:10I'm not doing that. I'm not in a million years am I doing that. I don't care what Mr. Trump says. He wants me to go into a war zone. Mr. Vance, his vice president, spoke glowingly about hoping to see troops in many of America's larger cities. Oh, really? That's what the vice president wants? I'm not going there. That'd be crazy. You can't predict what he's going to do from one day to the next. Why would you make that costly move to relocate your factory if the next day Trump's going to say something different? That's right. Not just, I mean, I advise, in my life, I've advised corporations to move a factory loses you six months to a year.

46:52You've moved, right, from one apartment to another. It's disorienting. You ought to put shit in boxes and take it out, all the rest. To move a factory is a big deal. It's very costly. You lose all the workers where you're leaving. You need to find a new group of workers where you're going. That's going to take training and a job. Nobody in their right mind is going to do that. If you were to undertake it now, your factory wouldn't be up and running until Mr. Trump is no longer the president. And therefore, who the hell knows what comes next? And as if this weren't enough, the largest city in the country, New York, is about to elect a Muslim socialist as its mayor.

47:36What? Again, this is not to do with whether you like or don't like socialism. It's about these are not the circumstances you're looking for to situate your investment. We haven't begun yet to see what the rest of the world is going to do. So the uncertainty, which I could give you a lecture about, in economics, it's well understood. The biggest thing about holding back a movement of a factory or an office or a store is uncertainty. Now that maybe we've settled down to what the tariffs are actually going to be, and I think they've settled down because Mr. Trump's advisors have told him, this is a colossal mess that you have made.

48:22Now we're going to see, however, what the reaction in the rest of the world is. And that reaction is going to be retaliation. It's going to be all the other governments in the world, all the other corporations in the world, trying to figure out how best to navigate this new world economy, one in which the United States and its key allies, the G7, are the smaller economic unit relative to China and its BRICS allies, who are the larger, quite a bit larger economic unit. And those companies and those countries are going to take steps that impact our economy more than his tariffs ever did. We are going to have people lose their jobs because foreigners are not going to buy from the United States.

49:18They don't want to have anything to do with a country as messed up as this one. Again, I'm going to just give you two examples. There's a complete crisis in the farm sector of the United States. The whole, you know, Midwestern part of the United States that grows the grain, you know, the wheat and the corn and soybeans and all of that. Why? Just to give you an idea, soybeans is a major crop in this country. Many, many farmers, and therefore many, many communities, depend on growing soybeans and selling them. The largest single consumer of soybeans in the world is the People's Republic of China.

50:02China this year decided to buy no American soybeans anymore. They used to buy them all. It turns out China can get soybeans from Brazil. Now, you know, Brazil is an immense country and very fertile land and all the rest. Okay, Brazil is part of BRICS. So is China. Brazil is overjoyed. Mr. Lula, a socialist who's in charge in Brazil, can go to the Brazilian farmers and say, now you know why you supported me. I'm building an alliance with China, and China is going to buy your soybeans into the indefinite field. Wow. Mr. Trump is now promising the American farmers$10 to$20 billion in a payoff to compensate them so they don't go out of business.

50:56You want to move into a country doing that? Really? Now the United States exports all kinds of things. Countries and companies all over the world are saying, I don't want to do business. Even if I do business with America, I want to do less than I used to. I don't want to get caught if this crazy Trump guy does even more weird stuff than he's already done. You can't do this, play this theatrical game for your white male Christian union workers who are angry, and imagine it doesn't have any other consequences you need to worry about. That's wrong. You're not solving America's economic problems.

51:39Or let me put it this way. For anything you're solving, I can show you six problems you're making worse. One more example, just to show you, because there's a little bit of economics here. 15 years ago, a competition began to produce electric vehicles. You know, the electric car, electric truck. The car companies we all know participated in that competition. Ford, General Motors, Chrysler, so forth. Okay, now 15 years later, it's over. We have a winner. The cheapest, highest quality electric vehicles are made, in case you don't know, by the BYD Corporation. If you never heard of it, that's because you're an American.

52:23A few weeks ago, I was in Paris, France. All the taxis that I encountered were BYD. They were Chinese cars and trucks. Why? Because they're the cheapest and the best. It means that everywhere in the world where there is a transition going on from gasoline-fueled vehicles to electric, battery, et cetera, vehicles. What everybody wants to buy, what every producer who needs cars or trucks wants to buy are BYD, because it's the best quality at the lowest price. You can get a fully functional truck for$30 ,000 and you can't do that anywhere else. It's the same with phones too, right? I've been hearing the same thing.

53:08There's a smartphone that's supposed to be a million times better than the iPhone and all that. And it's like, I'm forgetting the name right now, but it's wildly popular everywhere else. The camera's better. The service is better. Blah, blah, blah. And it's - You're watching the same with TikTok. As soon as the deal is made, Americans get TikTok. The Chinese will develop Big Bang and that will replace TikTok and we'll get the whole horse shit over again. But let me finish with the cards. BYD, why those letters? They're English. Stands for Build Your Dream. It's the name of a Chinese company that took those English words and adopted the initial BYD for the company.

53:49Mr. Trump in his first term put a 25 % tariff. So if you want to buy a$30 ,000 car here in America, you'd have to spend$30 ,000 to bring the car here and then pay a 25 % tariff to the local dealer before you could pick it up. Mr. Biden raised that tariff under pressure from Ford and GM to 100%, which meant that when Mr. Biden left office and Kamala Harris promised not to touch it, if you wanted that car and you were an American, you had to pay$30 ,000 to get the car shipped and another$30 ,000, 100%, to Uncle Sam as a tariff, so the car would end up, or the truck would end up costing you$60 ,000 if you're an American.

54:38To your competitor, anywhere else in the world, that truck is available for$30 ,000. You know what that means over the next few years? Americans are going to go out of business because they can't compete. Because the stupid, stupid tariff was a process in which you're watching a man shoot himself in the foot and you're screaming at him, that's your foot, you moron. It's going to hurt. No, no, he says, blam, blam. And then we are all sitting here five years later and we know, of course, why his foot hurts. This is ridiculous what he's doing. The United States is more intertwined with the world than ever before.

55:25Why is that? Because we just had 50 years of globalization in which we cheered everybody going abroad and we thought it was wonderful and we celebrated multiculturalism. Here's one more thing, looking at the two of you that I've got to say. During the very time that those white male Christian unionists were losing their jobs and feeling bitter that nobody listened to them, neither of the major parties gave a damn that they could see. They did notice that the whole country was involved in things like Black Lives Matter and the Me Too movement. What did they notice? That people, including politicians, seemed to be concerned about black and brown people and how they were treated, and female people and how they were treated.

56:17What was not cared about was white, male, Christian. That's why they're so angry at women. That's why they're so angry. That's why white supremacy is coming back. Because the Republicans not only turned them against the immigrants, it used that Democrats only care about women, and they only care about black and brown. Recipe for success. You've got to understand that, otherwise we will not undo this stuff. And who knows how far it will go. Vice President Vance wants you women to be breeders again. I didn't make this up. Please go look it up. It's not me. Not me. You have to have babies, lots of them, and spend, you know, your years from 18 to 40 doing that.

57:12That's your job. We don't care what happens before. We don't much care what happens to you after that. But we need more babies. It's extraordinary what we are going through. Is there some sense of women and people of color are taking our jobs? Is that what it is? Like we want them out of the workplace and we want immigrants gone so we have more jobs? Yes, you can never pull these things off without there being a grain of truth. You can't make it up completely out of nothing. I mean, sometimes they do that and sometimes that works. But you're much safer if you're going to pick a scapegoat that you can make some sort of plausible case of it.

57:54Yeah. One of the ways capitalists deal with workers, if they're paying them more money than they want to, is not just to go abroad to find cheaper workers, but go find cheaper workers and bring them here. If you're the capitalist who does a service, you can't export your local Starbucks. Starbucks is a service. It's got to be down the street from where you live so that people can get their coffee. So how are you going to make that profitable if people are used to high wages? Answer, immigrants. Bring immigrants in. The poorer the country, the more desperate they are, the better. And here's what you do.

58:35Not only do you pay them less, but you won't even see that, again, with the statistics, like our earlier discussion. Why? Because the employer knows that this is Maria. She's an undocumented immigrant from, I'll pick something, El Salvador. door. So now it's Friday and you're supposed to pay her her wage. It's supposed to be$284. So you hand her an envelope and she opens it up and it's$200. It's not$284. What is she going to do? She has to come back to the job. She has no other way to live. She may have a couple of kids depend on her. Can she go to the police and complain since it's against the law?

59:12She dare not do that. She's an undocumented immigrant. The police are the last people she wants to have anything to do with. The employer knows that. The employer has been doing that for years. It's standard operating practice in retail, in fast food, in construction, in all those industries where immigrants abound. Is there therefore a white worker who walks by the Starbucks or walks spy, whatever else, and notices a black or a brown or a female worker and wonders, is that the job I could have had? Sure. Does that happen? Yeah. It doesn't account for anything significant in our economy. By the way, those industries, retail, fast food, construction, and what's called entertainment, the restaurants and stuff like that, they had been complaining bitterly to Mr.

1:00:11Trump, trying to get deportation of immigrants stopped. For them, it is an enormous headache and a problem. They don't want it. They never did. They want those people here because they know they're going to have much more problem ripping off a native-born who will go to the police, who has friends, who isn't intimidated, all the rest. So that kind of brings us to our next question, which is that seemingly the economic theory underlying Trump's scapegoating of immigrants is that if we let fewer foreign workers into the country or deport the ones that are already here, this will somehow magically create more and better paying jobs for American born citizens.

1:01:00Is this in any way economically realistic, this idea at all? That's just make believe. There are people who really believe this. Yeah. Look, I can show you polls about Americans who believe that the earth is flat. It might worry you, but it's a large percentage. And when you ask them, how do you know it's flat? And their answer is because I never fell off the end. Okay, all right. Let me put it to you this way. The vast majority of undocumented immigrants have no wealth, which means the only way they survive here is by going and getting a job, which the overwhelming majority do. They get a job.

1:01:42It's a lousy job. The conditions stink. stink, the salary stinks, etc., etc., but they have a job. And as I told you before, when you get a job in the private sector, which is where they get the job, they produce a profit for their employer, because otherwise they wouldn't have that job. So who is the beneficiary of the immigrant? It's not just the immigrant who gets a wage, it's the employer of the immigrant who gets the profit without which there would be no wage paid to that worker. So the damage by getting rid, by deporting that person, you're not just depriving him or her of the wage, but you are depriving whoever they spent that money on of the income they earned that way.

1:02:35The local bodega, the local bowling alley, the church into which a few pennies are put in the basket on Sunday, or whatever, and you're depriving the business that hired them of the profit. And that will have consequences, you idiot. Don't you have to at least ask the question. The damage we're doing to the immigrant has to be set against the damage we are doing to our own economy by not having the profit and not having the wage spent by that person. If the employer can't find a Native American to do the work at that price, the employer may go out of business. And then what? Say a little bit more about what impact you see these policies having on the job market currently into the future?

1:03:32Well, let's see. The job market has been declining roughly eight or nine months. Mr. Trump's crusade against immigrants is going on roughly eight or nine months. Oh, might there be a relationship? Of course there is. Of course there is. It's not the only thing going on. I don't want to, you know, A doesn't cause B. There are too many other things going on that impact both A and B. But sure, it's a factor. It's making the job market lousy. Look, you're deporting people who were a source of demand. Millions of people being rounded up. Those people were buying, you know, Twinkies at the store, and they were buying, you know, little shoes for their children.

1:04:19They're not buying anything. They're back in El Salvador, or Brazil or Paraguay, wherever they came from. By the way, the country to which most immigrants are sent back is Mexico, because they all, not all, but most of them came through Mexico. Okay, what's happening in Mexico? It used to be with the millions of people from Mexico who worked in America, that they would send back a part of their money to the family they left behind. In economics, these are called remittances. If you go to any Hispanic neighborhood in Philadelphia, in New York, anywhere else, you'll see stores that offer the service of wiring money back to Mexico or the other Central American countries.

1:05:04Okay, that meant for Mexico that people for whom Mexico did not have enough jobs, could now leave Mexico, cross the border into Texas or Louisiana, and find jobs. So they solved the problem of unemployment by exporting, you might say, the unemployed. But that brought them a double benefit, because the people who went to the United States made enough money not only to sustain themselves here in the United States, but to send money back to the grandma or the wife or the children or whatever back home. And so it was last time I looked at Mexican statistics, the second or third largest source of foreign income flowing into Mexico were the remittances.

1:05:58Okay, now let's ask the question, what happens when you reverse, when the ice drives terrified people back into Mexico. They have nothing. These are the poorest people we have. So they arrive in Mexico. They have nothing. Now they need a job. There isn't one. And now Mexico, which can't give them a job, has lost the remittances it counted on. You know what you're doing in Mexico? You're producing a social revolution. it will blow up. And that will either mean a left-wing shift or a right-wing. And in their country, a right-wing shift brings you the following. An explosion of the drug business, which is the only thing you can do in Mexico if you can't get a regular job.

1:06:49Pays reasonably well. It's a bit risky, but everybody's got an understanding with the Mexican police and army and everybody looks the other way. I mean, it's a very sad story. They have a left-wing government, the woman, Scheinbaum, who's the president of Mexico. So she's an unknown how she's going to navigate this. But this is a very serious problem. And not just for Mexico, for Guatemala, Nicaragua, all of those countries are watching a tsunami of returning unemployed and a drying up of the remittances. You know, the United States has a responsibility. It has said it controls Latin America since the Monroe Doctrine of 1830, 200 years of domination by the United States.

1:07:43they can't now say oh we're nothing we're spectators you're not a spec you helped shape the economies of this part of the world that have no work for people that starve people that put them in impossible dangerous guerrilla warfare situation so they leave and come here of course they do and now you punish them by throwing them back you know the morality of this is so disgusting You don't even know where to start. But it is also a program that cannot work. Look, I'll even go further. If you're a serious Christian, or for that matter, any religion, it doesn't matter, and you take your ethical commandments, whatever you call them, seriously, you don't hurt other people.

1:08:37You don't take joy in other people's suffering and so on. You want to tell me how the American people are going to understand what they are doing to immigrants? Come on. What? But I must tell you, over the last three weeks, I have watched, as I'm sure you have, pictures on the television of the American military shooting boats in the Caribbean near Venezuela. Four boats in which human beings were literally blown to death four different times. The excuse given by our president and by his defense secretary was that these people were in the drug business. Okay, I'm an American. Being in the drug business is not a capital crime.

1:09:29We do not execute people who are arrested and convicted of being drug business people. We imprison them and we don't kill them. Mr. Trump, without any evidence, who knows what's in that boat? Without evidence, functioned as the police, the jury, the judge, and the executioner. Wow. You are on the road to fascism. not because of this or that policy. When that happens, when you don't even know whether there were children in the boat, you didn't bother to arrest them, and you are proud, and you're telling the Venezuelans, we're going to do it again. Wow. I don't know what it takes for a population to rise up.

1:10:22No one ever does until it happens. It's coming closer. There isn't the outcry that there needs to be. And there isn't the outcry that I think is coming. When it comes, it'll be very strong. I may not even remember when it comes how it felt about those boats, but they're in there somewhere. It's one of those things that novelists say, once you see it, you can never unsee it. It's imprinted on your brain. And I think that's happening. And watching another child terrorized in some ice rain. You know, wow. Wow. There's some concern over the past few weeks whether we'll even be able to safely have these kinds of conversations in public anymore over here.

1:11:06I mean, hopefully we will. I have friends who are telling me, and they mean it, that they turn me on and they say, the day comes I turn you on and you're not there, I'm leaving. And I say, where are you going? And then I get New Zealand, Canada, Europe, Asia. Americans, in a way I have never seen in my lifetime, are thinking about leaving. I still teach at the university. I have students who are changing their doctoral dissertation topic halfway through in order they can do something that will require research in Europe. They want to get out of here. They're afraid. And they're not out there publicly.

1:11:53They're just afraid. All right. Thank you so much, Rick. It's been a pleasure. Take care. Same here.

1:12:07was produced and edited by Emily Friedlander and me, Andrea Dominic. Our theme music is by Mark Donica. To check out more, head to our Substack. That's theculturejournalist.substack.com. And if you like what you're hearing, leave a rating or review on Apple Podcasts or share us with friends to help support independent journalism.