Saturday, August 11, 2012

NYT Blames Petty Theft and Old Workers for Prolonging the Recession

Yes, they really believe that the answer to the recession is, at least in Italy, liberalization of the labor market. In an article previously titled "Italian Business Potential Thwarted as Crisis Persists," Liz Alderman describes a microcosm to justify new labor laws that make firing employees easier in Italy:

"In Ms. Pallini’s own factory, an employee suspected of stealing had to be watched for two years before being caught in the act. Videotape that had captured his thefts was not admissible in court, so her father and two employees had to spend countless hours gathering watertight evidence to ensure that judges would not eventually reinstate the man. By contrast, a private sector employer in the United States could have terminated the worker as soon as a theft was detected, unless a union contract was involved or antidiscrimination laws were violated." Source
Dean at the Center for Economic and Policy Research missed the point by focusing on a polemic about how accurate it was to say that US businesses can fire workers after theft is "detected":
"Actually, a private sector employer can terminate a worker who it thinks is stealing, even if they never caught the worker. In fact, they can fire the worker just because they think they are the type of person who might steal or just because they don't like him or her. Workers who are not protected by union contracts or civil service guidelines can be fired any time for any reason that does not violate anti-discrimination laws." Source
Of course, he is right about that point, but its a rather narrow argument to make and it doesn't even start to address the real problems that created and are perpetuating the crisis.

Small businesses are suffering as a consequence of a global recession caused by fraud at the level of the financiers who are squeezing them, making profits off of the work of businesses and by extension the workers employed by them. It's simply missing the point to talk about high labor costs or burdensome regulations on labor relations when the financial sector has done far more damage to these businesses: it created the atmosphere of weak employment (of both labor and capital!) and deliberately defrauded countless businesses and governments, on top of which many in the finance sector have made profits far disproportionate to their investment of funds and labor in these businesses.

But I guess its hard or financially inconvenient to talk about why these issues (especially in Italy) are more pressing than labor costs. The NYT has been basically the mouthpiece of the Democratic Party since Wilson's candidacy, and having a political regime so embedded with the finance sector means an atmosphere of pro-finance reporting, be that enforced or not.

I'm sure employers every where would like nothing more than to slash labor costs, after all, its gotta be easier to fight the proles for the scraps from the financier's smorgasbord. And as journalists, I guess its only fair to report on that dynamic. But it is bad reporting to talk about any dynamic like this without giving the proper context or weighing the interests of stake-holders proportionally: for instance, shouldn't we be concerned about legislation making firing easier at the time that an austere economy is being imposed on an ever-weaker working class?

Why is the potential growth of a small business more important than the potential loss of consumer demand that lower wages and more firings implies?

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