Finding Jobs

Former Reason editor Virginia Postrel on "vanishing" jobs:

In a quickly evolving economy, in which increased productivity constantly makes some jobs redundant, we notice the job losses. It is much harder to spot where new jobs are emerging. Our mental categories tend to be behind the times. When we think of jobs, we see factories, secretarial pools, police officers, lawyers. We forget all about jobs we see every day.

The official job counters at the Bureau of Labor Statistics don't do much to overcome our blind spots. The bureau is good at counting people who work for large organizations in well-defined, long-established occupations. It is much less adept at counting employees in small businesses, simply because there are too many small enterprises to representatively sample them. The bureau's occupational survey, which might suggest which jobs are growing, doesn't count self-employed people or partners in unincorporated businesses at all. And many of today's growing industries, the ones adding jobs even amid the recession, are comprised largely of small companies and self-employed individuals. That is particularly true for aesthetic crafts, from graphic designers and cosmetic dentists to gardeners. These specialists' skills are in ever greater demand, yet they tend to work for themselves or in partnerships.

Manicurists and massage therapists are a couple of examples. Read her whole article here.

Comments

[Critic]

Uh huh. Many are afraid, yet our standard of living keeps rising. This is where common sense comes in handy. Election year fear-mongering notwithstanding, how many Americans would prefer the economic policies (and unemployment rates) of France or Germany?

[Kevin Carson]

This is typical of people like Postrel. They'll tip their hats to the idea that this isn't really a free market, and that government intervention reflects the interests of rent-seeking corporations. But five minutes later, they're back to defending the actions of those same corporations on the basis of "how our free market system works."

No discussion of the jobs question, if it is to be legitimate, can ignore the following:

1) the "new" jobs emerge from the relatively competitive small and medium-sized business sector;

2) this small and medium sector is heavily handicapped by competition from government subsidized, protected, and cartelized big business;

3) the state capitalist sector has "downsized" over a third of its employees over the last decade, partly because of massive government subsidies to R&D for less labor-intensive production technologies, and partly because of massive government subsidies to the relocation of their production operations overseas;

So, to sum it all up: Because of government intervention in the economy, old-style manufacturing jobs are being rapidly dismantled--and you're paying for it. The economy is shifting from higher-paying manufacturing to lower-paying service jobs, not through the spontaneous working of the market, but from government intervention--and you're paying for it. The sectors of the economy that are creating the most new jobs are hamstrung by the government in alliance with big business--and you're paying for it.

[Jason Ligon]

"So, to sum it all up: Because of government intervention in the economy, old-style manufacturing jobs are being rapidly dismantled--and you're paying for it."

You overstate your case. Old style manufacturing jobs are being replaced in an environment of some government interference, but the effects of that interference are not straightforward. Plenty of small businesses rely on licences, patents, and so forth, and large and small businesses pay taxes. If bigger were always better due to the protection of government, more mergers would be successful. You have the advantage of criticizing the current competitive environment by comparing it to a hypothetical one in which, apparently, no one would seek to reduce labor costs.

"The economy is shifting from higher-paying manufacturing to lower-paying service jobs, not through the spontaneous working of the market, but from government intervention--and you're paying for it."

Again, job migration from manufacture to service is occuring in an environment of SOME government intervention, but you assign causation too easily. Manufacturing jobs and wages are protected by absurd "fair labor" laws, for example. This isn't a one variable problem.

"The sectors of the economy that are creating the most new jobs are hamstrung by the government in alliance with big business--and you're paying for it."

I am curious about the subsidies to moving operations overseas. Do you have a reference I can use? Companies pay to build plant and equipment here, and they pay to build plant and equipment somewhere else. What is the nature of the subsidy?

[isildur]

It seems as though what this article snippet is suggesting is that I encourage my out-of-work sysadmin friends, whose jobs have indeed vanished, to seek retraining as... manicurists? (No thanks, I won't be giving the NYT my information to read the rest).

On every issue I'm vigorously libertarian, but it really seems as though Reason's constant pounding of the free-trade drums in relation to the shrinking tech sector is a misplaced and simplistic answer to a much more complex problem.

It doesn't solve anything, either, to point out that the complexity comes from government meddling. Of course it does. That doesn't really help my unemployed friends. Suggesting that they retrain as beauticians, or gardeners, or cosmetic dentists doesn't help, either.

[Jason Ligon]

isildur:

If you are vigorously libertarian, you should appreciate that there is demand for labor at a price, and if your friends are unable to locate a job they trained for at acceptable terms, yes, they need to retrain.

Ten million college graduates with technical backgrounds that will work for a fourth what your friends do is tough to argue with for any employer.

The big picture is, contractors for IT services used to pay $1000 for those services, and now they pay $250. They have $750 they didn't use to have. Figure out where they are spending that money and get a job there. Wage protection is the broken window fallacy.

[Jon H]

So, basically, the dull, repetitive jobs like software development are going overseas, so that American will be able to take exciting, high-tech, creative jobs like giving manicures and massages to frumpy bored housewives, or cutting stone into relatively uniform polygons and ovals, with occasional beveling.

Sounds like the foundation of a world-leading superpower to me.

[Kevin Carson]

Jason,

You should know that I sometimes argue by overstatement. I agree that there are counteracting variables. And there's certainly some market pressure to reduce labor costs. I would just argue that capital-intensive forms of production are adopted to a *greater degree* than they otherwise would because of subsidies to R&D, training, etc.

Subsidies to the export of capital refers to financing of road, utility, etc., projects with government funds through the World Bank or U.S. foreign aid, whose main purpose is to make the countries in question a more hospitable environment for U.S. capital looking for overseas outlets.

For example, according to Gabriel Kolko, about 2/3 of World Bank loans went to promote transportation and electric power infrastructure needed to support local investment by American capital.

Kolko, Confronting the Third World (New York: Pantheon Books, 1988), p. 120.

A U.S. Treasury report wrote in positive terms of the effect of such taxpayer-financed projects, which "often yield high external economies in the form of lower costs of production, distribution, and/or marketing in a wide range of industries."

US Department of the Treasury, "United States Participation in the Miltilateral Development Banks in the 1980s" (Washington, 1982).

[Rick Barton]

Jon H,

The US gets outsourced jobs as well:
http://news.com.com/2010-1028-5162847.html

Virginia Postrel substantiates her case well; that the government under records domestic employment. But, to engender more of it, it's pretty straight forward. We should stop the government from taxing and regulating domestic jobs, literally to death.

Also, as has been mentioned, our government should not be giving subsidies to corporations, which make overseas production artificially cheap.
There is a government program who's name I can't recall and am to lazy to Google at this instant that provides funding for infrastructure in other nations which defrays critical costs for overseas production by American concerns.

Of course, there are no corporate subsidies that should exist in a free society.

[Jon H]

"The US gets outsourced jobs as well:
http://news.com.com/2010-1028-5162847.html"

The references article mentions Siemens: "The German company Siemens, which makes electronic and electrical products, employs 65,000 people in this country. "

But Siemens announced recently that it will be moving 15,000 software development jobs from the US and Western Europe to India, China, and Eastern Europe.

[Jon H]

"The US gets outsourced jobs as well:"

Also, many people in the US who work for foreign companies probably became employees of foreign companies through mergers and acquisitions. The jobs didn't move from overseas to the US, the ownership of their employer moved from the US overseas.

Simply counting workers employed by foreign companies isn't very useful unless you account for this.

Anyway, just hiring people in another country doesn't make it outsourcing, or offshoring.

[Mo]

One thing I don't get is how this affects unemployment numbers. Part of how unemployment numbers are calculated is by a phone survey. You get a call from the friendly Census employee and when they ask you if you are employeed, you answer yes. They don't count you as unemployed if you give massages, cut granite or give manicures.

Critic,
Not that I would prefer European policies, but I'm sure there are plenty of Americans that would because of the increased gov't benefits (part of what causes the higher unemployment).

[Rick Barton]

"But Siemens announced recently that it will be moving 15,000 software development jobs from the US and Western Europe to India, China, and Eastern Europe."

That's still 50,000 jobs plus however many of those 15,000 jobs to be moved that are now in Western Europe, for the US just from Siemens.

"(Some) jobs didn't move from overseas to the US, the ownership of their employer moved from the US overseas."

True, and yet another reason that we don't want our government penalizing out sourcing by American concerns is that it could cause political pressure to build in other nations to do the same, which could hit the category of jobs you're speaking of .

If, instead, our government terminates of subsidization of outsourcing and reduces the government, imposed costs of domestic production we will not see retaliation by other governments.

[MALAK]

Don't knock manicurist. A friend's wife was down-sized from her drone job at one of our big five banks. She started working part time doing manicures with her sister until she found a new job. It's been two years and she now makes 40-50% more than her bank job, works fewer hours, and about 1/3 of that income is tax-free (tips).

[Shannon Love]

All science begins with measurement. The reason economics is the "dismal science" is that we really don't have reliable means of measuring the totality of the hyper-complex interactions between people that we term "The Economy." With no ability to measure accurately, even a theory that in principle is a perfect description of a phenomena is useless.

Supposed metrics like GDP and Unemployment rates are really just statistical miss-mashes of arbitrarily chosen activities. For example, unless it has changed recently, selling software or media over the internet is not counted in either the GDP or trade balance metrics. Worse still, the definitions change overtime and vary significantly from country to country, rendering historical and regional comparisons useless.

I think we pretend that we can measure and predict the economy because it is so important to us. The idea that nobody understands it is to frightening. Its like those seeking treatment from an 18th century doctor. We would rather be bleed, purged, irrigated and have a feather shoved down our throat than be forced to admit that nobody knows why we're sick or what to do about it.

[Geotech]

My father has an engineering degree and was a marine engineer for years. Now he makes knives for a living for more money than he ever made using his degree. Smart people know how to make money.