What the JetBlue Guy Says About the Economy

Mark Lennihan / AP Photo

On Aug. 9, Jetblue flight attendant Steven Slater gave new meaning to the term "exit interview." Angered at the boorish behavior of a passenger, he picked up the intercom, loudly submitted his resignation, grabbed two beers, and slid down the escape chute.

The same day, a front-page article in The Wall Street Journal documented the plight of employers who were shocked that people weren't interested in the jobs they were offering. The aggrieved included an Illinois company offering skilled machinists a below-market $13 per hour (about $26,000 per year), and an airline in Dubai that couldn't grasp why Americans weren't rushing to take up residence in a nondemocratic emirate halfway around the world for the irresistible annual wage of…$30,000.

For people of a certain age, such anecdotes evoke something like nostalgia. It was 1976, a time of similar economic hardship, when stressed-out newscaster Howard Beale—as played by Peter Finch in the movie Network—urged his viewers to stick their heads out the window and scream: "I'm as mad as hell, and I'm not going to take this anymore!" Two years later, Johnny Paycheck had a hit with the song "Take This Job and Shove It."

It may seem ironic that signs of employee dissatisfaction should emerge at a time of high unemployment, but it's hardly surprising. For the two phenomena—the poor labor market and workers' antagonism toward employers and customers—are actually connected. Employees are sick and tired of tough conditions and crummy salaries.

A history of notable airplane freakouts. Andrew Theodorakis / NY Daily News via Getty Images

The economy has been growing for a year, and corporate profits have surged—Standard & Poor's estimates that income of the S&P 500 rose nearly 52 percent in the second quarter of 2010 over the same period in 2009. Much of that impressive growth has been driven by the remarkable gains in efficiency and productivity that corporate America has notched since the recession took hold. Last year, productivity—the ability to produce more with less—soared 3.5 percent, up from 1 percent growth in 2008 and 1.6 percent in 2007. Yes, companies have embraced the Gospel of Cost Cutting with missionary zeal—printing on both sides of the page, eliminating bottled water, turning off the lights. But most of the gains came straight out of payroll. Companies slashed salaries and curtailed benefits, all while asking shellshocked veterans to pick up the slack for downsized colleagues. Even as business picked up, companies have been extremely slow to hire; the private sector has added just 630,000 jobs so far this year. And when it comes to wages and benefits, corporate America's bean counters could make Scrooge blush. Many of the firms that slashed pay or cut 401(k) matches haven't restored them even though their balance sheets and profits are now healthy.

Look, unemployment can be enormously stressful. But under today's conditions, employment can also get on your nerves. In fact, Slater's cathartic meltdown came several hours before a government news release signaled that companies have pushed workers about as far as they can go. For the past year, the U.S. economy has been whipping roughly the same number of workers to do more, produce more, serve more, with each passing week, without much assistance, and without much of a raise. Over the past four quarters, the Bureau of Labor Statistics reported, "unit labor costs fell 2.8 percent as output per hour increased faster than hourly compensation." But when the BLS reported the second-quarter productivity numbers on Tuesday, Aug. 10, the results were a little shocking. For the first time in several years, productivity actually fell—at a 0.9 percent annual rate. Workers put in more hours, but output didn't keep up. They simply can't run any faster.

Slater's self-ejection vividly illustrates the personal story behind the numbers. The last couple of years have been a golden era for employers—they've found that they can hire whom they want at lower wages, and that it's easier to retain folks without having to boost salaries. But at some point companies that want to grow will have to break down and hire new people, or turn part-timers into full-timers, or put contractors on the payroll. Many employers are treating existing and potential employees as if they're desperate for work. And plenty of Americans are. But desperate times can lead to desperate measures. Push your workforce too hard without adequate reward, and someone just might tell you to take this job and shove it.

Daniel Gross is also the author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation and Pop!: Why Bubbles Are Great For The Economy.