Food for Thought on Jobs: Tidbits from Solow, Gershon, Mokyr

July 21, 2017

Food for Thought on Jobs: Tidbits from Solow, Gershon, Mokyr

The US unemployment rate has been 5.0% or lower for nearly two years, since September 2015, and the most recent estimates for June 2017 show it at 4.4% in June. For most of my life, an unemployment rate at this level would have been cause for near-riotous celebration. But it’s also a time where many workers have had little growth in wages, where labor force participation has fallen, where many jobs are replaceable contract work without any clear career path, where many jobs feel under threat from foreign competition and technology, where the control of employers over workers often feels as if it’s on the rise, and where inequality has been on the rise. I’ve recently run across three comments on US labor markets which get at some of these concerns in various ways, which I’m passing along here. As always, there is more discussion at the links.

Here’s Robert Solow, as part of an “In Conversation” feature with Heather Boushey at the Washington Center for Equitable Growth blog (July 20, 2017):

“I’d like to find some way of enlarging and improving the way workers, wage earners, are represented in their firms. Unions used to do that, but even with the best will in the world, you could not restore the trade union movement. If it’s true, what we all think, that the nature of workers changed, that people who work for many employers in different industries, and different occupations, really have changed, then neither the craft union nor the industrial union is the right policy vehicle.

“But of course, the online workers that everybody talks about are the prize case in this. They never have contacts with their employers, who change from day to day, and they have no contact with the other people who work for that employer. … There’s no shop floor, but for the online worker, it’s clear who the boss is. The boss is the one who pays, as usual.

“So what’s the correct, valid form of representation they could have? How could we do something about their voice and about the web of rules in which they operate? Or something about retirement for people who don’t have a single employer for any length of time? What is the right form of representation? I don’t really think it’s having someone on the board of a corporation. It might matter, but it can’t be the whole thing. I think that you need some kind of substitute. Maybe you need a substitute for the shop floor. How can you be part of a group that you never see, never communicate with or anything like that?

“It’s that part of the inequality issue that I think doesn’t attract enough thought, and I don’t know how to go about encouraging that. Who would be good at it? Or what happens in other countries? … I do think the economics of this is important because the object here is not merely to make people feel good but to make them feel effective and be effective in pursuing their own interests. So that, to me, is part of the inequality issue. It’s not so much a quantitative inequality, it’s a fact that the relationship between the boss and the bossed is getting more and more biased toward the boss, and that makes people feel unhappy.”

Here’s Ilana Gershon in a 20-minute podcast interview on “The Biggest Mistakes Job Seekers Make Today” (July 10, 2017) at the Knowledge@Wharton website. Gershon has a book out (which I have not yet read) called Down and Out in the New Economy: How People Find and Don’t Find Work Today. Gershon says:

“People are becoming extremely canny about doing research on the companies that they are interested in being hired into, and they’re thinking more carefully about what kinds of jobs that they would like to have. This is the thing that I’ve been really impressed by: People are getting more and more clever about figuring out whether the workplace that they are perhaps about to join is really a workplace that they want to be a part of. …

“The other thing that people seem to be doing — and it took me a while to realize why and how this was taking up a lot of people’s time — was focusing on weak ties or weak links in order to be able to get jobs. Weak ties and weak links used to be the ways that people were getting jobs. It used to be very effective in the 1970s, but nowadays, technology has changed so much that the pain point in getting a job has really shifted from trying to find out that the job exists in the first place to figuring out how to have hiring managers or recruiters notice you amid a pile of resumes. It’s more a question of getting noticed rather than finding out that the job exists. Weak ties aren’t so helpful for that. It turns out that workplace ties — having someone who knew you from a previous job and can talk about what you are like as a worker — was very helpful for people. …

“In San Francisco, where I was doing most of my research, people expected a job tenure of two or three years; in the Midwest, people were expecting more like five to eight years. So when people in the Bay Area were looking at a job applicant from the Midwest they would say, “But wait a minute, you stayed too long. You were too static.” This was really a problem. Then I talked to people who were interviewing for jobs in Chicago, and they found it really frustrating because they kept being told, “But you’re a job-hopper, you don’t commit.” And they would say, “But this is the right length of time in my region.” …

“[T]here isn’t that much pressure on companies right now to do as well as they can by their job applicants — to give them information about when the job is no longer available; to give them enough information about what the job will actually be like. There are a lot of complaints among job seekers about how badly they are being treated in the hiring process. … As advanced as we are technologically, you will see jobs actively posted that were filled a month, two months, three months before, and they’re still out there showing up as potential jobs for people.”

Finally, the Knowledge@Wharton website has also posted a 54-minute podcast in which Jeremy Schwartz moderates a discussion between Robert J. Gordon and Joel Mokyr on the subject  “Can the U.S. Economy Recapture Its Past Growth?” (July 20, 2017).  It’s interesting throughout. Mokyr announces at one point: “I’ve been an economic historian all of my life, but I’m going to say something that cuts off the branch on which I’ve sitting: I think the past is not a terribly good guide to the future.” Here’s are some thoughts from Mokyr on how technology will affect future jobs:

“There’s two kinds of techno-pessimists. There are ones … who basically say, the best is behind us, and from now it’s going to be slow going. And then there’s the other techno-pessimists who say, this is going to accelerate and it’s going to destroy us. It’s going to destroy people, it’s going to destroy jobs, it’s going to make us all the slaves of these supercomputers. They can’t both be right. Maybe the truth is somewhere in the middle.
The problem you are underlining has been around for basically 200 years. In 1821, [economist David] Ricardo wrote a famous letter to [economist John Ramsay] McCulloch in which he basically said, the way labor-saving technology … has been going, very soon nobody will be working. Well, that was 200 years ago and people are still working. I think the nature of work will change, and machines will replace more arduous, routine, boring work. Now, we may reach a situation where the only people who will work are the people who want to work. …

I think what you will see if the participation rate declines is an increase in volunteer work, which is already a very large sector of the economy. People who do work because they feel good about it, and they want to do it, and it gives them a chance of participating in society, to meet people, and all the other benefits of work. That I think you will see. And then of course the big issue becomes how do we actually pay people some kind of citizen’s wage, and that’s an issue about distribution that everybody is sort of scratching their head over, and I don’t have an immediate answer to that. …

I just want to say that economic growth will be slowed down because of people dropping out of the labor force, people retiring, and so on. That takes advantage of the fact that we actually don’t count leisure as part of our national income accounts. And so if you’re not working because you don’t want to work — the national income goes down, that is bad. But of course it isn’t bad because we all understand that leisure itself is a desirable thing. …

Now the other thing of course is that it’s not so obvious that these people aren’t going to work. I refer both of you to a survey essay that was published last week in The Economist, in which they basically point out that we may be looking at a large proportion of the population, particularly people in the 65 to 74 age bracket, who are basically fit to work, want to work, and there is no reason why they shouldn’t work — but only if we can change the institutions of society that have been systematically discriminating against them.



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