Today’s post is brought to you, belatedly, by this lovely post over (link should work now) at Gin and Tacos and my thoughts thereon. Long story short: the post is an, er, scathing critique of James Sherk’s (of the Heritage Foundation*) recent appearance on Hardball. (note: much of the audio on the latter half of the video is ruined by Matthews laughing his ass off the soundstage) Sherk asserts that, basically, the Science of Economics Proves having unemployment insurance discourages people from sucking it up and getting a job, any job, ASAP–even if that means moving to where the jobs are, or taking something out of your field and way below your former pay grade. Or all three. And, we are to believe, that’s a Bad Thing, because unemployed people are using Your Tax Dollars to hold out for jobs like their old ones, rather than accepting that the invisible hand of the marketplace has booger-flicked them out of the middle class.
One thing I’ve always wondered: Isn’t it maybe better, long term national economic policy-wise, for the abruptly unemployed to have a chance to hold out for whatever their definition of a ‘good job’ is? Having someone who’s highly trained–whether they have a Ph.D or 20 years experience as an underwater welder–take work way out of their field puts their skills to waste. I’m guessing Sherk would say they’re welcome to keep looking for another teaching or welding job while they flip burgers, but taking that minimum wage job is bound to slow down their job search waaaay down–it’s not like their new boss has any incentive to let a newly-trained employee leave, and they’re not under any mandate to give employees time off to go to interviews. I’m not just speculating, this was been a problem for me when I was in food service and looking to get out. The longer you’re out of a profession, the harder it gets to get back in. At 6 months, you’re an unemployed welder. At 2 years, you’re a former welder.
And for people who don’t have the education or experience to get out of shitty jobs, a sudden influx of formerly-white collar workers is bad, bad news. To take this to a bit of an extreme, consider this: when the last 5 people a McDonald’s hired have a BA or an MBA, there’s a good chance HR will start skipping over applicants sporting a GED. You can see this in places with chronic over education and high employment–isolated college towns and Portland, OR come to mind.
The percentage of Americans with college degrees has meandered ever-upward over the last few decades, and with it, the minimum qualifications for many jobs have gone up incrementally too. Office drone & secretarial type listings often demand a bachelor’s degree rather than a HS or associate’s degree, unskilled workers are expected to have graduated high school, and skilled labor has slowly swung from on-the-job training toward a tech school first, employment later model. I think this downturn will push that trend a little further, as the unemployed people with MBAs settle into office jobs a tier or two below their last position, the people with undergrad degrees go down another notch or two, and so on. People who are highly educated aren’t going to be unemployed forever, they’ll just wind up pushing everyone below them down a notch.
Human-interest stories about the crappy economy always focus on the former banker who now works as a gas station attendant. But what about the guy who can’t get a job as a gas station attendant because all those jobs are now going to college graduates?
I’m guessing Sherk hasn’t had much experience being unemployed without good prospects. So he sat down and thought real hard about it, read some intro economics texts that say things will all work out so long as everyone makes ‘rational’ choices and people have perfect information. And using his Rational Power, he deducted people should go where there are jobs.
But he obviously didn’t talk to anyone in the ‘real world,’ (or even in the rural poverty hot zones of Real America (TM)) or he’d have noticed that he’s full of shit. For starters, there’s no where in the US right now where business is booming and jobs are plentiful. And if he’d talked to anyone actually dealing with unemployment,* he’d know that the whole ‘rational decision’ model isn’t what’s actually sensible for people to do. In a model, moving for a crappy job is better than staying put with no job. But in practice, there are all kinds of costs–the cost of moving, of giving up your friends, family, professional network, etc. If only one person in a couple is unemployed, moving just to see if a state with 7% unemployment is better than one with 10% unemployment is especially stupid. I could go on, but I’m sure everyone gets the point.
*Yeah, I know, the Heritage Foundation fancies itself more conservative than libertarian, but in this case, the economic argument is pure free-market freebasing, which both teams support but libertarians do so with less social finesse. Sherk’s fuck-you-and-your-kids attitude is a stellar example of that kind of malicious social cluelessness. So there.
**At one point he cites his well-off unemployed friends, who he doesn’t seem to have talked to at all, and who are exempt from his admonitions to take jobs they currently consider beneath them.