As I See It: There’s No Place Like Work
November 29, 2010 Victor Rozek
Way back in the last century, 13 years before the world was scheduled to end because of a computer glitch, William Greider published a book. It was an 800-page scholarly tome that, I suspect, not many people actually read, but which today is more relevant than it was back when nobody was reading it.
The size and subject matter may have discouraged more than a few potential readers. Only Ivy League grads like Greider would think that the inner workings of the Federal Reserve would be compelling to the casual bibliophile. But the story, it turns out, was not only fascinating, but eye-opening, in an ignore-the-guys-screwing-with-the-country-behind-the-curtain sort of way.
One of the enduring factoids I remember from Secrets of the Temple: How the Federal Reserve Runs the Country is the relationship between interest rates and suicide rates. The Board of Governors of the Federal Reserve system apparently understands that every time they vote to raise interest rates, the suicide rate in the nation rises in response. For some subset of the financially overextended population, an increase in rates guarantees their financial ruin and their response is fatalistic and final.
If the Fed cares about such unintended consequences, it has managed to keep its concern sub-rosa. As Vito Corleone, a fiscal policy maven in his own right, once observed: It’s nothing personal, just business. But setting interest rates is just one way the Fed impacts the health of the citizenry. Promoting employment is another, and here the body count is rising. Twenty-three years after Greider’s book hit the nightstands, someone employed by the Fed finally got curious about the numbers, if not about the people.
According to an article by Michael Luo, published in The New York Times, Daniel Sullivan, director of research at the Federal Reserve Bank of Chicago, and Till von Wachter, an economist from Columbia University, correlated death and unemployment records for Pennsylvania residents during the recession of the early 1980s. What they found, reports Luo, was “sobering.” Within a year of losing a job, “death rates among high-seniority male workers jumped by 50 percent to 100 percent,” depending on age. But the ordeal of unemployment casts its malignant shadow far beyond a 12-month period. “Even 20 years later,” writes Luo, “deaths were 10 percent to 15 percent higher.” Which meant that a worker whose employment was abruptly cut at age 40 had his life expectancy cut by 12 to 18 months.
Such are the wages of stress.
Numerous studies also confirm that body counts and illnesses are the handmaidens of involuntary job loss. Luo reports that within 10 weeks of the announcement that a steel mill in Lackawanna, New York, was closing, three men had heart attacks, two of them fatal. Two others committed suicide when a galvanizing mill closed. A 2006 study by epidemiologists at Yale University confirmed that “layoffs more than doubled the risk of heart attack and stroke among older workers.” Especially for people over the age of 50, losing a job “is a major life event with social, economic, behavioral, and health outcomes.” The true costs of late career unemployment, the authors conclude, “exceed financial deprivation, and include substantial health consequences.”
Among them are a slew of illnesses and conditions exasperated by stress. Kate Strully, a sociology professor at the State University of New York in Albany, found that “a person who lost a job had an 83 percent greater chance” of developing a health problem like diabetes, arthritis, depression, or other psychiatric issues. It’s adding injury to insult for people who lose their health insurance along with their job. And worse, merely the threat of job loss can spawn serious illness. Research suggests that “persistent perceived job insecurity” was itself “a powerful predictor of poor health and might even be more damaging than actual job loss.” From which we can assume that almost everyone is or will be experiencing potentially debilitating stress during this extended period of economic blight.
Given the mounting evidence that, on many levels, layoffs are bad for humans, the Fed finds itself in a quandary. By law it’s required to pursue policies that promote maximum employment. But its single-minded support of deregulation paved the way for much of today’s meltdown (think unregulated derivatives, particularly swaps which enabled the growth of the toxic subprime securities). But if a sagging economy is responsible for widespread layoffs, which in turn cause widespread health problems, how can the Fed’s policies be tempered with compassion for those not wearing Armani? And is compassion even economically viable? After all, by GDP accounting standards, a heart attack is great for the economy. All those healthcare dollars flowing into the system. What could be better? A bridge collapse? Another Katrina? If only those people who committed suicide had chosen long-term illness over death. But they probably weren’t economists working for the Fed.
For those whose stress meter is nearing the red zone, projections are bleak. The Associated Press reports that “Federal Reserve officials have become more pessimistic in their economic outlook through next year and have lowered their forecast for growth.” Essentially the Fed is admitting that it has run out of tricks. In any event, it works on behalf of people who champion complete deregulation because it allows them to periodically loot the country. So, common sense remedies will not be applied.
And, if you think that burdens are shared in the post-bailout economy, think again. The Commerce Department announced that corporate profits are at their highest level in U.S. history! Between July and September, business recorded $1.7 trillion dollars in profits. And the bulk of those profits went to the financial industry–to the same people who first cheated and then were bailed out by the middle class. The only thing trickling down is the middle class standard of living.
What’s desperately needed is a large scale jobs-creation program, but politicians would rather hold their breaths and turn either blue or red than cooperate and craft solutions to the nation’s problems. So, for the foreseeable future, unemployment will remain high (at least two years by Fed estimates), and Fed policies will only be mildly successful in promoting job creation. Meanwhile, the new Congress has, so far, refused to extend unemployment benefits. Oh, what a Merry Christmas we’ll have.
As an already-stressed workforce enters the normally high-stress holiday season, it’s a good time to consider ways to manage stress and protect the great gift of good health regardless of inequities and economic outcomes. There are two basic ways to regulate stress: You can either change your situation or your reaction to it. And that will be the topic of my next article.
In the mean time, I leave you with this thought from William Greider. “A profound political question is suddenly on the table: Must the country continue to give precedence to private financial gain and market determinism over human lives and broad public values?”
How we answer that question will tell us a lot about who we’ve become.