SUBCONTRACTING THE AMERICAN DREAM

Just when we thought this whole craze of farming out good American jobs to third world countries couldn’t get any worse, the Air Force is now giving uniformed pilot work to Afghan and Iraqi subcontractors. The New York Times reported yesterday that the reconnaissance missions against the Islamic State and other terrorist groups are largely piloted by local drone contractors. And I thought it was bad when newspapers shipped out the copy editing function to people in India for $4.95 a day, even though they didn’t know if Snelling was a street, an avenue or a nail salon.

At least the defense department has some internal limits on subcontracting, a seemingly foreign concept in the private sector. According to the Times, the contracted drone pilots can’t be used to kill someone. They can go on spying missions and locate the target to be killed, but the button that actually obliterates the enemy – and any civilians who get in the way – must be pushed by a real, live Air Force employee. Still, it seems that we are perilously close to being able to completely contract out the next war.

Of course, that would be a real bummer for the economy. World War II was one of the country’s biggest economic booms. It created so many jobs, even women were allowed to work, at least until the guys came home. But, whether in war or peace, nobody in charge is really giving much thought to what happens when all the real jobs are gone.

The University of Michigan’s Gerald Davis has a new book (“The Vanishing American Corporation”) addressing what might well be the most urgent and perplexing problem facing our economy: the permanent disintegration of employment. Gone are the days, Davis says, when employees were the lifeblood of a corporation. Instead, they are anathema to the new corporate goal of serving only the economic interests of shareholders. And that, Davis notes, is much better done with contractors, collaborators and any other source that can be kept off a permanent payroll and benefit schedule. Following the lead of Nike, Apple, Sara Lee and others, the dominant industry trend right now is for companies to focus on design and brand management with a drastically scaled down employee force, and then contact out all manufacturing and other work to east Asia or a similar venue.

To make matters worse, according to Davis, the new digital startups all follow the same personnel architecture: a very limited number of employees and a gazillion-and-a-half freelancers and contractors. He offers a staggering illustration: the combined workforces of Google, Facebook, Yelp, Zynga, LinkedIn, Zillow, Tableau, Zulily and Box is less than the number of employees who worked for Blockbuster in 2005. In other words, millions of jobs have gone and are not coming back. The growing trend is quickly moving from stable employment to serial and multiple contracting gigs. Think Uber and Airbnb mixed with, say, freelance landscaping. For many, the American Dream has become a struggle to meet basic security needs.

The most frightening thing in this election year – well, one of them anyway – is the total silence on how to overcome this toxic structural employment problem. Hillary Clinton has proposed massive retraining programs for people needing a job, but has said nothing about where those jobs may come from in this employment-adverse economy. Bernie Sanders pushed for a major jobs program through infrastructure repair, a meaningful but incomplete and temporary fix. Donald Trump says he will create “really, really great, jobs, I mean totally terrific jobs” without offering a hint as to the how or what.

Meanwhile, the “sharing economy,” with its low-pay-as-you-go contracting and no retirement plan in sight, keeps right on growing and, by default, rewriting and rewiring the new American Way of Life. Surely there must be someone on Capitol Hill or in the White House who can stop this train long enough to figure out how to build an economy that serves us all. If there isn’t, maybe we can contract someone to do it for us.