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The Logic of Unemployment

Not all the unemployed are lazy.

By Petrarch  |  October 1, 2014

In a recent development that should surprise no one, House Majority Leader John Boehner put his foot in his mouth yet again.  The Christian Science Monitor tells us:

Speaker Boehner gave a response that was... not so favorable about Americans’ work ethic. He said in part: “I think this idea that’s been born over last ... couple of years that, ‘You know, I really don’t have to work, I don’t really want to do this, I think I’d just rather sit around,’ – this is a very sick idea for our country.”

Even this gaffe-tastic quote was clumsily put; CSM did a better job in their headline which read "Boehner says unemployed ‘don’t really want’ jobs."

Being election season, the media is trying to spin this as the usual unsympathetic fatcat Republican who has no idea of how bad things are for little people.  It's not gaining too much traction, though, because that would raise the question as to exactly why things are so bad down on the ground when the President is a Democrat, and the mainstream media won't touch that concept at all.  Odds are this line will soon be forgotten.

But it shouldn't be.  Because John Boehner is on to something - not what he thinks he's discovered, nor what the media casts it as, but even more important for its obscurity.

Jobs Americans Won't Do?

One of the more galling arguments used by open-borders advocates is that America requires the services of hordes of illegal immigrants to do important jobs which Americans refuse.  Somebody has to take out the trash.  Somebody has to dig the ditches.  Somebody has to pick the lettuce, or we won't have any to eat.

This points in the direction of a trenchant observation: in the past, all these jobs were done by Americans.  Now they mostly aren't.  Both the illegal-worshipping Democrats and the welfare-bashing Republicans put forward the same explanation: Americans are lazy and cossetted, "too good" for grunt manual labor.

We all know overeducated ignoramuses who live in their parents' basements for years on end waiting for the "perfect job" which will never come.  We've all heard the paeans to the inherent dignity of work no matter how lowly.  The implicit argument of the Right is that, instead of collecting welfare, the unemployed should simply get out there and take a McJob to keep body and soul together; the Left believes that Americans won't do that no matter what and shouldn't be forced to, hence the need for illegals and for massive welfare spending.

Both are mistaken.  Sen. John McCain accidentally demonstrated this during his misbegotten 2008 campaign, when he argued for open borders on the grounds that Americans would not do those jobs no matter what.

One audience member [asked] a pointed question on his immigration plan.  McCain responded by saying immigrants were taking jobs nobody else wanted. He offered anybody in the crowd $50 an hour to pick lettuce in Arizona.  Shouts of protest rose from the crowd, with some accepting McCain's job offer.  "I'll take it!" one man shouted.  McCain insisted none of them would do such menial labor for a complete season. "You can't do it, my friends."  Some in the crowd said they didn't appreciate McCain questioning their work ethic.

The problem is not that Americans won't do the work.  They simply are not willing to do it for the pittance being offered.

You Gotta Earn Your Pay

The Left's response to this is as predictable as it is apparently logical: Raise the pay!  The past few months have seen repeated strikes and demonstrations by fast-food workers demanding a $15 minimum wage for flipping fries.

If the minimum wage were raised significantly and enforced on jobs of all sorts, including those done by illegals, then yes, Americans would clearly be more willing to take those jobs.  The problem is that there would be a whole lot fewer of those jobs.

In the case of fast-food joints, there is an entirely automatic machine that prepares, cooks, packages, and delivers hamburgers more quickly, of better quality, and far more reliably than human workers.  It costs a fair amount to buy and install it, but if the payroll suddenly doubled, don't you think McDonald's would very quickly order up as many of these as the company can crank out?

When the Left agitates for increases in the minimum wage, they forget that every worker has to produce more value for their employer than they receive in salary or the job won't exist.  How much value is being produced in the preparation of a $1 hamburger?  Not much, which is why flipping burgers doesn't pay much.

Workers producing more profitable, bigger-ticket items tend to get paid more.  Autoworkers making $30,000 cars get paid more than fry cooks even though, for modern assembly-line work, the required level of skill isn't much different.  Boeing's aircraft assemblers are paid better than UAW lineworkers because they're working on multi-million-dollar airplanes.

Yes, the consequences for failure are different in each case, it's true.  A badly cooked hamburger might make a customer sick; an improperly assembled car could kill a person or two; a defective plane could kill hundreds.  All these potential mishaps, while very real, are also vanishingly rare.

Yet the principle holds true across the economy, even for jobs which are functionally identical.  Pilots of international 747s are paid nearly ten times what a local commuter pilot receives, even though the knowledge and skills required to fly two different types of modern plane are virtually identical.  The 747 pilot is more productive as he's moving 300 people around the world, whereas the other guy is merely taking a dozen to Dubuque.

Which brings us back to the question of the lazy unemployed.  Are people who refuse to accept just any old job no matter how low, truly lazy or spoiled?

Not always.

The Psychology of Experience, Investment, and Loss

What's the stereotype of the unemployed that Boehner's depiction calls to mind?  A middle-aged man who's lost his comfortable middle-class paper-pushing job and can't find another one remotely in the same ballpark.  Boehner is arguing that he needs to get his expectations aligned with the new reality and start flipping fries instead of simply eternally answering electronic want ads that go nowhere.

Perhaps that's true.  There are some jobs that have gone away and which are never coming back, manufacturers of buggy-whips being the classic example.  We've never had such a widespread loss of whole categories of jobs, though.

At the same time, almost any modern middle-class job requires a massive investment in education and training which leaves most people staggering under crushing debt loads.  These debts are manageable with the expected type of employment, but hopeless without it.

This is a relatively new phenomenon.  Until quite recently, very few people had any significant school debts, and most companies had sizeable training budgets for keeping their employees current.  Most companies didn't expect new hires to already know everything they needed on Day 1; the expectation was that they'd arrive with basic familiarity with the general nature of the job, but would receive specific training as needed.

With the ongoing Obama Depression, training budgets have been cut or eliminated.  Companies today expect new hires to have specific experience doing exactly what the job entails, down to the last particular, so as to be profitable from the moment they walk in the door.  They can get away with this because so many people have been downsized that they're often able to find just exactly the right fit, a historical anomaly.

The flip side of this is that nobody expects any particular job to last terribly long.  The employees know they'll be laid off eventually; the employer knows the same, so why invest in developing the skills of someone who'll just take them to your competitor?

The result is that the risk and cost of education and training is increasingly borne by the employee.  What happens to someone who invests a great deal of time and effort getting trained for a job which, when they're ready for it, doesn't exist anymore?  Too bad.

Here we enter the realm of psychology.  Logically, once you've spent the money on education, it shouldn't matter to you anymore - you can't get it back so it's irrelevant.  It's a "sunk cost."

That's contrary to human nature though, and we see it everywhere.  We even have an expression for it: "throwing good money after bad."

The logical strategy for an unemployed sociology graduate would be to recognize that they have no more useful skills than someone with only a high school diploma, and start expecting pay and positions with that in mind.  Their bad choice of college and major has permanently ruined their life and that's that.  The logical strategy for the unemployed middle-manager is similar, which is what Boehner is getting at.

But that would be very much unlike the way real human beings think and act.  Boehner, being a politician, also knows that when human beings are forced to act in a way contrary to their nature, they tend to get very angry and take it out on their elected leaders.  This makes economic reality and political reality collide.

Out of the Trap?

So how do we escape our current economic trap of unemployed people vastly overeducated and indebted compared to any job they're likely to find; companies which won't invest in employees they know will leave shortly; and individuals responsible, not only for paying for their own education, but somehow accurately foreseeing what college majors will be a worthwhile investment and what majors will be a bankrupting disaster or worse?

The fast food machine shows the way: every day we see new technology that doesn't do anything we couldn't get done before, but now does it without people.  The Google self-driving cars won't drive (much) faster than a cabbie, but they won't need a cabbie so cab drivers all lose their jobs.  Microsoft Word and Google eliminated armies of secretaries and researchers; improved algorithms are doing the same for paralegals, managers, even some doctors and diagnosticians.

Science fiction authors have long imagined what a future automated society would look like.  Sometimes it's a Utopian world of total wealth, as in Star Trek.  More recently, it's been an ultimate-inequality dystopia like Elysium where a handful of rich people own everything and everybody, and the vast masses contribute nothing because they have nothing of value to contribute.

If that's the future, and if you've dropped out of the running for becoming one of that handful - why not just "sit around"?  If there's no hope, you may as well be comfortable on a day-by-day basis.

What we need is some reason to cheer up, to get up off the couch, to think that there can be hope and a brighter day, a "Morning in America."  Reagan was the master of making Americans feel better; FDR was even greater, since he was able to do it without giving them any actual substantive reason to feel better.  Today we have neither.

Our current president offers doom and gloom, Hillary has no vision for the future, and none of the Republican candidates have offered much in the way of hope.  Although they're pretty gloomy, very few Americans have absolutely given up all hope forever, and we're sick of being told how bad it is.

All this country needs is for someone to communicate a Reagan-like vision, and he'll get elected 2 years from now.  It worked for Obama even though it