Creative Destruction Hurts US Workers Most
Keeping Business and Employment Strong

A. Capitalism leads to Creative Destruction
    1. First described by 20th century sociologist and economist
Joseph Schumpeter
        was an important new idea of capitalism. 
    2. Change involves new technology, improved economic structures and the 
        destruction of inefficient economic structures.
    3. Results
        a. high economic growth
        b. participant insecurity, political dissatisfaction and a move toward socialism


B. How Workers Affected by Creative Destruction

Wage Shares Down in Many Countries


C. Causes Are Numerous


US Workers Took the Biggest Hit





 Lawrence Summers on jobs

" The core problem is that there aren't enough jobs.
 If you help some people, you could help them get the jobs,
 but then someone else won't get the jobs. "

"...the idea that you can just have better training
 and then there are all these jobs,
all these places where there are shortages and
we just need the trained people is fundamentally an evasion."

Listen to On Manufacturing Effort and Inequality audio

D. Creative Destruction Hurts America's Workers Most
Trump's Many Creative Destruction Policies

1. Trump attacked worker wages using federal agencies

Department of Labor-DOL
DOL prevented Roughly 8.2 million workers from receiving overtime pay with
a weaker 9/19 overtime rule.
Editor's Nope: A 2016 proposal would have been more generous but it was blocked by a Texas Federal Court. Trump's rule went to affect on 1/1/20.

Trump's DOL, on in 1/20, finalized a new joint-employer standard under the  Fair Labor Standards Act (FLSA). This narrowed the set of circumstances whereby a firm could be liable as a joint employer under FLSA. It reversed a DOL ruling under Obama. On 9/8/20 the U.S. District Court for the Southern District of New York struck down as arbitrary, most of the “joint employer” rule. Workers saved more than $1 billion annually.

DOL’s proposed “tip stealing” rule which would allow employers to pocket the tips of their minimum wage employees. It was stopped by Congress when they amending the Fair Labor Standards Act. Worker annual gain was $5.8 billion.

National Labor Relations Board-NLRB
1. Narrowed
joint-employer standards

2. Obstructed worker rights to fair union elections

3. Hindering worker organization efforts during non-work hours

4. Allowed for the misclassification of workers.

Trump's executive orders for federal workers

1. Limited use of official time for collective bargaining activities

2. Weakened due process protections for federal workers subjected to discipline

2. Trump attempted to take away some workers’ health care

Affordable Care Act-ACL
Attempted to repeal the Affordable Care Act-ACA.
Asked the Supreme Court to rule the ACA unconstitutional.
Weakened the ACA as part
the 2017 tax cut for corporations.
Workers losing Employer Sponsored Insurance are not helped into ACA insurance.
Losing ACA would hurt workers with Employer Sponsored Insurance
1. Large firms with no insurance would not be penalized.
2. Benefit caps for essential health services would return.
3. Individual out-of-pocket spending caps would return.
4. Child coverage until the age of 26 would slowly disappear.
5. Maternity coverage and free preventative care mandates would slowly disappear.
6. Waiting periods limits would slowly be extended

3 Occupational Safety and Health Administration-OSHA
   refused to issue

1. Emergency Temporary Standard to protect workers during the pandemic
2. OSHA failed to enforce the Occupational Safety and Health Act despite nearly 10,000 CV-19 complaints.
3. Only 
issued a handful of citations for failure to protect workers

4. Centers for Disease Control-CDC guidelines allowed essential workers to continue working with asymptomatic provided employer implements additional precautions.

Department of Labor (DOL) excluded millions of workers from paid CV leave provisions including 9 million health care workers and 4.4 million first responders, before revising the rule after a federal judge invalidated parts of the original rule in August. Further, at first Trump vehemently opposed the extension of the $600 increase of unemployment insurance benefits and additional aid to state and local governments.
5. The Real Fake News Warning
Pay eligibility will vary depending on selected price index.
Most people select the index that helps their point of view.

Prophetic Prediction Edward Luttwak 1994

Why Fascism is the Wave of the Future source

Capitalism unobstructed by public regulations, cartels, monopolies, oligopolies, effective trade unions, cultural inhibitions or kinship obligations is the ultimate engine of economic growth is an old-hat truth now because relentless competition destroys old structures and methods, thus allowing more efficient structures and methods to rise in their place reported by Schumpeter.  Finally. structural change can inflict more disruption on working lives, firms, entire industries and their localities than individuals can absorb, or the connective tissue of friendships, families, clans, elective groupings, neighborhoods, villages, towns, cities or even nations can withstand, is another old-hat truth.

Resent increased consternation comes from accelerated structural change that accompany economic growth. They causes personal upheaval and social disruption. Change is now quite rapid, though slower with slow growth.

Destructiveness of the capitalist process increased with the worldwide retreat of public ownership, central planning, administrative direction and regulatory control with all their rigid hostilities to innovation, structural change, economic growth, individual dislocation and social disruption alike. State ownership of economic enterprises is no longer accepted as the guarantor of the public interest: It is now seen as the guarantee of bureaucratic idleness, technical stagnation and outright thievery. Central planning, once the arithmetic highway to assured prosperity, is impossible simply because no group of mere humans can predetermine next year’s demand for anything. Administrative direction once gloriously successful in  Asia, at least helpful in France, and a failure in Brown’s Britain is ineffective or corrupt, and being abandoned. 


Regulatory controls still increased
 because  many recent technical novelties entail regulation, and some positively demand it.

Globalization removed import barriers1
 when mass-media imagery/advertising was allowed to create a single mass market.

Competitive production expand beyond the limits of the domestic markets.

Related employment
could be displaced at any time by cheaper production from someplace else in the world.

Disproportionately rapid structural change
arrived with the sudden long-anticipated but delayed increases in administrative and
clerical efficiency from electronic computation, data storage, and internal communication.

Increased efficiency of office-work
exposed white-collar workers to dislocations as office-work productivity
finally increased at a fast pace which allowed increased worker displacement.