pinion More than Meets the Eye in Bush's Longer Hours Comment

GOP presidential candidate Jeb Bush caught hell from working class Americans after suggesting they'd have to start working longer hours in order for the economy to fully rebound. In the age of soundbite politics, such a statement is never going to play well, but let's take a look past the politics and into the policies. Bush was actually addressing some important dynamics, even if he was coming at them from the wrong angle.

In a newspaper interview in Manchester, New Hampshire's Union Leader on July 8, Bush said, “My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see. Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours.”

Predictably, Democrats and progressives pounced. Bush was born into a wealthy family, made much money from his family connections, most notably while his father and brother were Presidents, and routinely earns $300,000 to give boring speeches in the right circles. Obviously, he's easy to paint as being out of touch with the typical American.

That being said, most of what Bush said was true; however, there are two sides to the coin. According to a recent Gallup poll, Americans with full-time employment are working an average of 47 hours per week, much more than they reported in previous decades. However, that poll also showed that an increasing number of Americans are underemployed, meaning they have only been able to find part-time work. After the dust-up, Bush said he was talking about the second group—and maybe he was.

Bush also correctly pointed out that labor participation rates were at historic lows, meaning a smaller percent of the population is working at all. The labor force participation rate is the percentage of people 16 or older who are not in the military, a prison, a mental hospital or a nursing home who participated in the labor force by either having a job or actively seeking one in the past month. As long-term unemployment has rendered those numbers less accurate (those who drop out of the search for employment disappear from the "unemployed" pool), this metric has become viewed by many economists as a better indicator of economic well-being in our current circumstances.

Because the U.S. labor force is expanding at a slower rate than our population, the participation rate is going down. But because the number of unemployed are dropping as the labor force expands, the unemployment rate is also dropping. Boomers also skew the historic participation rate, because of an inordinate percent of the overall population reaching retirement age (or being close enough to retirement not to seek new work once they're displaced).

The more interesting aspect of Bush's statement and the response to it, however, relates to employee productivity. Bush said we need to be more productive as workers, but productivity is at an all-time high—and by all-time, I'm talking the history of human beings. It's also up an amazing 300 percent since 1948. Here's the rub, and it's not an ideological, corporate or even intentional rub. It's more like an unintentional (if perilously ignored) side-effect inherent to our economic system.

If a worker becomes more productive, basic economic theory would suggest that their labor becomes more valuable. However, the opposite is true. Here's why. As workers become more productive, there is ultimately less work to be done. This means less total demand for labor even as the population (and labor pool) continue to grow, distorting the difference in supply and demand of labor in the employment market.

Much of the increase in employee productivity is owed to technology. By the same token, many employment opportunities have been lost to automation, further compounding the deficit in labor demand, compared to labor supply. There is no mechanism in our economy for employees to share in the profit of increased efficiency and because it ultimately leads to more labor supply, it eventually creates downward pressure on wages.

This dynamic is at least partly responsible for the ever-increasing wealth gap, as the ownership class reaps nearly all of the benefits of technology increasing productivity. It's also a prime contributor to the historically high level of Americans receiving social welfare benefits. If a big box store is only hiring workers for less than 30 hours a week and paying the minimum wage because high demand for employment allows them to do so, those workers are in most cases going to end up qualifying for benefits like Medicaid and food stamps.

Half a century ago, we imagined a future in which machines and computers had us working four-hour days (but for full pay), with more time to dedicate toward other more enriching and meaningful pursuits. Some predicted that this would be the key to the next great advancement in society, a world that would benefit from citizens who were less stressed, healthier and had time to constantly learn more. This sort of vision discounted the idea that the benefits of technology are not automatically distributed evenly (or at all).

Today, 58 percent of all new income in the American economy goes to the top 1 percent of earners. While the most common wealth gap stat to throw around used to be that the top 1 percent control more wealth in the U.S. than the bottom 90 percent, today, the top tenth of the top 1 percent controls that much.

As technology continues to make employees more efficient and automation continues to displace workers in the labor force, even a U.S. economy growing at 4 percent might not mean much for the typical American worker's economic well-being. What Bush—and every other serious 2016 Presidential candidate must explain—is how an economy that continues to promote bipartisan trade agreements that promote off-shoring jobs, while not addressing the losses that occur by way of automation and increased individual productivity, and is supported by a tax code that rewards rather than discourages all of these practices can be recalibrated to sustain a viable middle-class.

It's a very difficult question that the world's top economists haven't yet come up with a good answer to. That being said, I wouldn't expect more than additional partisan talking points on these issues from anyone in the candidate pool who isn't named Bernie Sanders, though a serious societal debate is certainly in order.

Dennis Maley is a featured columnist for The Bradenton Times. His column appears each Thursday and Sunday. Dennis' debut novel, A Long Road Home, was released in July, 2015. Click here to order your copy. Click here to read previous columns by Dennis.