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Tuesday, January 06, 2015

'Job Quality is about Policies, not Technology'

This was in the daily links not too long ago, but just in case it was missed (it is from the Growth Economics blog):

Job Quality is about Policies, not Technology, by Dietz Vollrath: Nouriel Roubini posted an article titled “Where Will All the Workers Go?”... The worry here is that technology will replace certain jobs (particularly goods-producing jobs) and that there will literally be nothing for those people to do. They will presumably exit the labor market completely and possibly need permanent income support.
Let’s quickly deal with the “lump of labor” fallacy sitting behind this. ... We’ve been creating new kinds of jobs for two hundred years. ... The economy is going to find something for these people to do. The question is what kind of jobs these will be.
Will they be “bad jobs”? McJobs at retail outlets... We can worry about the quality of jobs, but the mistake here is to confound “good jobs” with manufacturing or goods-producing jobs. Manufacturing jobs are not inherently “good jobs”. There is nothing magic about repetitively assembling parts together. You think the people at Foxconn have good jobs? There is no greater dignity to manufacturing than to providing a service. Cops produce no goods. Nurses produce no goods. Teachers produce no goods.
Manufacturing jobs were historically “good jobs” because they came with benefits that were not found in other industries. Those benefits – job security, health care, regular raises – have nothing to do with the dignity of “real work” and lots to do with manufacturing being an industry that is conducive to unionization. The same scale economies that make gigantic factories productive also make them relatively easy places to organize. ... To beat home the point, consider that what we consider “good” service jobs – teacher, cop – are also heavily unionized. Public employees, no less.
If you want people to get “good jobs” – particularly those displaced by technology – then work to reverse the loss of labor’s negotiating power relative to ownership. Raise minimum wages. Alleviate the difficulty in unionizing service workers.
You want to smooth the transition for people who are displaced, and help them move into new industries? Great. Let’s have a discussion about our optimal level of social insurance and support for training and education. ...
Any job can be a “good job” if the worker and employer can coordinate on a good equilibrium. Costco coordinates on a high-wage, high-benefit, high-effort, low-turnover equilibrium. Sam’s Club coordinates on a low-wage, low-benefit, low-effort, high-turnover equilibrium. Both companies make money, but one provides better jobs than the other. So as technology continues to displace workers, think about how to get *all* companies to coordinate on the “good” equilibrium rather than pining for lost days of manly steelworkers or making the silly presumption that we will literally run out of things to do.

    Posted by on Tuesday, January 6, 2015 at 11:52 AM in Economics, Income Distribution, Unemployment | Permalink  Comments (24)


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