Apparently I was a lazy girl my whole life, and didn’t even know it.
The Wall Street Journal provided a fairly succinct summary of a lazy girl job in July: “one that can be done from home, comes with a chill boss, ends at 5 p.m. sharp and earns between $60,000 and $80,000 a year — enough to afford the basic comforts of young-adult life, yet not enough to feel compelled to work overtime.”
Source: The New York Times
All through the 1990s I was waiting for the labor market to punish employers for their (then new) strategy of laying people off as soon as there was 15 minutes with no work to do, intending to hire them back (or hire somebody else) as soon as they had work again.
Capital markets forced employers to go that route. Any company that tried to resist—keeping on employees beyond the bare minimum—would see its stock price fall so much that it would be taken over in a leveraged buyout, and then the new owner would cut staff to the bone.
As I wrote for Wise Bread back in the day (in What’s an employee to do), it made me sad to watch. Surely, I thought, eventually the labor market would tighten up, and employers who had kept their employees on through a rough patch would have an advantage over employers who had to go out and recruit, hire, and train new employees.
But it never happened. Until, according to a recent article in the New York Times, now: Companies hording workers could be good news for the economy.
It’s a pretty good article.
Employers traumatized by not being able to hire enough people may not be quite so quick to lay them off:
“When the job market slows, employers will have recent, firsthand memories of how expensive it can be to recruit, and train, workers. Many employers may enter the slowdown still severely understaffed, particularly in industries like leisure and hospitality that have struggled to hire and retain workers since the start of the pandemic. Those factors may make them less likely to institute layoffs.”
Jeanna Smialek and Sydney Ember https://www.nytimes.com/2022/10/12/business/economy/companies-hoarding-workers.html
And, if employers do keep workers on as the economy slows, it will help the U.S. economy. As Federal Reserve Board Vice Chair Lael Brainard says:
“Slowing aggregate demand will lead to a smaller increase in unemployment than we have seen in previous recessions.”
https://www.federalreserve.gov/newsevents/speech/brainard20220907a.htm
Perhaps even more important than those things, it will make me happy.
After three decades in which the market was reinforcing exactly the wrong behavior, now maybe it will encourage the right behavior.
News reports and social media have been full of posts alleging that enhanced unemployment benefits make it more remunerative to remain unemployed than to seek a job, and that because of this employers are having trouble filling positions. I want to make some suggestions as to how those positions could be made sufficiently attractive to employees. I will omit the obvious suggestion that employers could raise wages, because that’s the least interesting tactic.
I want to begin my analysis by suggesting that there are actually very few people who will choose to live on meager government benefits, even if slightly less meager than usual. (There are some, of course. I wrote about that in Find Work Worth Doing, back in my Wise Bread days.) Most people prefer the live at the highest standard of living they can manage. In fact, most people build an inflexible household cost structure that provides that standard of living, despite the obvious risk of financial catastrophe in the event of any glitch in income. But that too leads one to the obvious, and still not very interesting, suggestion that employers could attract employees by raising wages.
So, what are some other possibilities? How could employers make hard-to-fill positions more attractive?
Well, every job I ever worked offered a pension. That’s something that almost no private-sector jobs offer any more, so it could be a clear value-add. Related, every job I ever worked offered a retirement savings plan with a generous employer match. That’s something that’s only come back slowly since the end of the financial crisis, but it’s another possible value-add for employers seeking employees.
When talking about things like this in the past (usually about the difficulty of getting Americans to work the sorts of jobs filled by migrant labor), I always asked if the positions being offered to Americans offered health insurance (which of course they never did), and suggested doing so could be a way to make the jobs more attractive to Americans. Now that we have Obamacare that’s much less of an issue, but offering health insurance would still be a value-add.
There are many other ways a job and workplace can be made more attractive:
I actually wrote this post though, to talk about one specific way in which unemployment assistance and other government benefits are better than a job: They depend on the law, rather than on the whim of an employer.
The current state of employment law in the U.S. is such that having a job this morning is no assurance of having a job this afternoon. Your employer can change nearly anything about the job for nearly any reason—cut your pay rate, cut your hours, change your duties, require you to work in a hazardous environment, etc. (Of course you have the option to quit at any time, but see above about inflexible household cost structures.)
Only a small fraction of households can afford to live on unemployment insurance, even with the pandemic enhancements—but any household could rejigger their household cost structure to do so, if they cared to. But—and this is the point I’m trying to make here—an employer could easily adjust the conditions of employment that they offer so as to provide exactly the sort of certainty to an employee that government benefits do: They could offer an employee a contract.
In the U.S. almost no (non-union) employees have a contract. Instead they have a job, the terms and conditions of which are usually determined by an employer-written “employee handbook,” which has rules about procedures the employer promises to follow before firing or otherwise disciplining an employee. But they could sign contracts with their employees, committing to such things as minimum hours and term of employment.
They won’t, because they prefer to have maximum flexibility in adjusting their labor costs as circumstances change. But refusing to offer employees any sort of legally enforceable promise about the conditions of employment, makes saying “Nobody wants to work any more” mere spin.
Many people do want to work, and enormous numbers of people want to earn enough money to have a high standard of living. Employers are just playing to the crowd, hoping to maximize their flexibility, minimize their costs, and convince customers to blame “lazy workers” when the company fails at various aspects of providing good service.
I spent the whole decade of the 1990s hoping that the economic upturn would prove that the strategy of letting employees go the instant there wasn’t any work to do was unwise. Surely, I thought, those companies would suffer—missing out on business because they didn’t have the skilled employees to do the work (and screwing up on what business they did get, because rushing to hire new employees would result in picking up some duds).
My hopes remained unfulfilled. Oh, probably plenty of companies did suffer from an inability to hire skilled, reliable workers at reasonable wages. Certainly employers complain that they can’t, especially when they’re lobbying Congress for an expansion of the H1 visa program. But it didn’t matter, because the company’s were profitable. (Profitable companies may do as they please; unprofitable companies must kowtow to the financial markets.)
I’ve written about this before, in a two part series at Wise Bread called “What’s An Employee To Do?” Part 1 laid out the issue in some detail, and part 2 talked about the best strategies for an employee to follow. (There’s actually a lot of opportunity for employees in the current situation, as long as they don’t make the mistake of thinking of themselves as employees.)
Prompted by Tobias Buckell’s recent post Working culture, though, I wanted to talk a little about the broader impacts of the way we’ve come to arrange society, because there were other reasons that employers kept employees on during a business downturn. Business owners kept employees on during a downturn because they cared about them as people, because they were friends and neighbors, because the whole community suffered when one person lost a job.
A small part of the reason that things are different now is that this is less true. Managers are not as likely to live in the same neighborhoods as their employees. They don’t shop in the same stores. Their kids don’t go to the same schools. In any case, the decisions are being made far away. (The local managers were completely out of the loop when the site where I used to work was closed down three years ago.)
But that’s just been an enabler of this shift. The real cause is the behavior of the financial markets, which since 1990 have crushed any employer that tries to resist, by driving its stock price low enough that someone could acquire them and bring in new management—management that would lay off plenty of workers.
This isn’t new, of course. Business owners knew that going public meant putting their business in the jaws of the financial market nutcracker—but they made so much money it was worth it. You occasionally hear about the rare business owner who has declined to go public for just that reason—but you hear about it because it’s rare enough as to be news.
As Toby describes, Germany has structures and institutions in place to support businesses that are small and local. Unions are a big one—including the government support for unions that encourage and enable unions to work together in a block. Also important are rules that lean against market pressures for business consolidation, offshoring employment, etc.
Personally, I used to support a purely market-based approach. That’s why I spent the 1990s waiting for markets to punish the bad actors. I’ve changed my mind. It’s fine to leave the fate of the companies up to the markets, but it unacceptable to leave to the markets the fate of whole communities.
Similarly, I used to support the notion that the right way to address this sort of issue was education (because I believe in free choice). Yes, stuff made by prisoners, slaves, and children costs less. Yes, stuff made by heavy industry costs less if the manufacturers are allowed to wreak environmental destruction all across their supply chain. But surely people would make different purchasing choices if they understood that they’re not only paying to have all this harm done, they’re also putting their friends and neighbors (and themselves) out of work. There again, I’ve changed my mind. It turns out, I simply didn’t understand how much cheaper that stuff was than stuff made locally.
Given the option to have the accoutrements of a middle-class standard of living—clothes, dishes, furniture, gizmos—it’s become clear that most Americans will cheerfully accept any amount of slave labor and environmental destruction (as long as they don’t have to see it) and tolerate the destruction of local businesses and the bankruptcy of their neighbors.
They’ll complain about how it affects property values and how it makes it tough to find a job. But then they’ll take their unemployment check and food stamps and go buy the cheapest stuff they can find at WalMart.
Neither markets nor eduction are going to do the job. The U.S. needs to create institutional support along the lines of what Germany provides.
