Having said that (that Noam could be the "allowed critic" but that has no impact in a discussion of ideas), I looked up what this Alan Greenspan did say.
Remember : that's how Noam proves his theory:
Greenspan:
"Atypical restraint on
compensation increases
has been evident for a few years now,
but as I outlined in some detail
in testimony last month,
I believe that job insecurity
has played the dominant role."
Noam's conclusion:
"Keep workers insecure,
they're going to be under control."
(Taken from the subtitles found
here.
This is a rather dubious conclusion. Especially so since the "live cam" scene is used as a rhetorical tool to make the quote and conclusion even more believable.
But viewing in context, Greenspan speaks about inflation and analyses which factors caused the inflation not to rise.
Manuscript of his testimony in full.
Sorry for this long quote - but it saves us from clicking and scrolling through possibly irrelevant stuff. Also, at the end of the quote, Greenspan says something interesting - at least for me. He says the workers' fear of automation and job loss lead to low job fluctuation, low wages, and long unions contracts covering 6 years instead of the usual 3. Here in Germany and some other EU countries I follow the main news headlines in, "digitalisation" and "industry 4.0" are terms thrown about for a few years now, and are creating fear of a monster in the shadows. No one credibly analyses their potential on particular job areas. Politicians and guest commenters from "think tanks" (read "Mont Pelerin Scoiety/Atlas Network") suggest "life long learning" as a remedy - but then fall short of actually suggesting or putting in place policies supporting that alleged necessity. Well, without analysis on where that monster in the shadow will show its ugly face - how could they?
That inaction on their part has had me befuddled. Greenspan's words might point towards an explanation. Because today, Germany is in some respects in the very situation Greenspan describes. Low unemployment, longstanding low salary increase, long union contracts (for those workers still organised in unions - that number was intentionally decreased by the Socialst Democrats who turned neoliberal in the early 2000s) , low CPI inflation.
Quote:
Thus, the FOMC continues to see the distribution of inflation risks skewed to the upside and must remain especially alert to the possible emergence of imbalances in financial and product markets that ultimately could endanger the maintenance of the low-inflation environment. Sustainable economic expansion for 1997 and beyond depends on it.
For some, the benign inflation outcome of 1996 might be considered surprising, as resource utilization rates--particularly of labor--were in the neighborhood of those that historically have been associated with building inflation pressures. To be sure, an acceleration in nominal labor compensation, especially its wage component, became evident over the past year. But the rate of pay increase still was markedly less than historical relationships with labor market conditions would have predicted. Atypical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity. In 1991, at the bottom of the recession, a survey of workers at large firms by International Survey Research Corporation indicated that 25 percent feared being laid off. In 1996, despite the sharply lower unemployment rate and the tighter labor market, the same survey organization found that 46 percent were fearful of a job layoff.
The reluctance of workers to leave their jobs to seek other employment as the labor market tightened has provided further evidence of such concern, as has the tendency toward longer labor union contracts. For many decades, contracts rarely exceeded three years. Today, one can point to five- and six-year contracts--contracts that are commonly characterized by an emphasis on job security and that involve only modest wage increases. The low level of work stoppages of recent years also attests to concern about job security.
Thus, the willingness of workers in recent years to trade off smaller increases in wages for greater job security seems to be reasonably well documented. The unanswered question is why this insecurity persisted even as the labor market, by all objective measures, tightened considerably. One possibility may lie in the rapid evolution of technologies in use in the work place. Technological change almost surely has been an important impetus behind corporate restructuring and downsizing. Also, it contributes to the concern of workers that their job skills may become inadequate. No longer can one expect to obtain all of one's lifetime job skills with a high-school or college diploma. Indeed, continuing education is perceived to be increasingly necessary to retain a job. The more pressing need to update job skills is doubtless also a factor in the marked expansion of on- the-job training programs, especially in technical areas, in many of the nation's corporations.
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