The Dirty Secret About Unemployment

The US economy is not creating enough new jobs. That’s true, but it’s not the whole story. The other side of the picture – the dirty secret about unemployment – is that we’re not creating enough people capable of performing all the jobs.

Liberals like to bemoan so-called “McJobs,” as though everyone is entitled to good pay and medical benefits and family leave time and so forth. They wish they could simply require businesses to thusly upgrade their jobs. Too bad they can’t simply require employees to upgrade their skills.

In a country where about 60% of people don’t have college degrees, and, shockingly, something like 25% don’t even finish high school, perhaps it’s not surprising that almost 10% are unemployed, and it’s absurd to do a Barbara Ehrenreich about how crappy some jobs are. Hello – if you don’t finish high school you ain’t gonna get one of them “good jobs at good wages” that liberals keep mewing about.

True, we used to have a lot of manufacturing jobs where someone with limited education could still do nicely. But times change, and people have to change with them. A century ago, most Americans worked on farms. Don’t romanticize that as Paradise Lost – it was a miserable existence, which is why millions fled the farm as soon as they got the chance.

What gave them that chance was soaring agricultural productivity, so we no longer needed almost everyone working on farms just to produce enough food. Today it’s less than 2% needed on farms. That vast change freed the other 98% to produce other things. And that was what made America rich.

Now we’re repeating the trick with manufacturing. Just as increased agricultural output freed people from farms, today increasing productivity means fewer people trapped in factories. With all the talk of “lost” manufacturing jobs, you might be surprised to learn that America’s share of worldwide manufacturing has not declined. We’re just making the same stuff with ever less labor.

And that’s a good thing. Just as increased agricultural productivity made us richer, likewise does improved factory productivity free up manpower (and womanpower) to do other things and make us richer yet. Provided that our workforce gets the necessary education.

Nothing is handed to us. Ultimately, there are no “entitlements.” In the past, we lifted ourselves by working hard. Technological advancement enables us to do it by working smart. The world of the future will belong not to those who work hard, but to those who work smart.

* * * *

I’m pleased to note a really good review of my book, The Case for Rational Optimism. Click here.

4 Responses to “The Dirty Secret About Unemployment”

  1. Lee Says:

    Liberals do recognize the value of government subsidized education. By my reading, it appears that your article says the opposite, or that there is a conspiracy to keep this aspect a secret….

    IMHO, the real disagreement is not about whether employers should be enabled to hire and employees should be enabled to get hired. Rather conservatives and liberals disagree as to whether the invisible hand of the market is sufficient to get us where we want to be. The safety net, including unemployment insurance, social security retirement, subsidized education, and subsidized health care*, is what liberals advocate to smooth out the bumps of the efficient but harsh free market.

    So, yes, let’s urge the workforce to get smart, and let’s subsidize it. Subsidies aren’t perfect, but they beat mass starvation, unending recessions, etc.

    *Not to be confused with the LiebermanCare plan we now have, which is more a boon to the insurance industry than the populace.

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  3. Rajesh Says:

    Very interesting!

    Its a fact that once the management knew that they can give the same or higher output without hiring back the workforce that got fired, they consider making this hiring freeze a permanent one. This means that the manpower requirement for business is recalibrated. Although such recalibration with a postive residue is indeed called ‘productivity”, I personnaly feel, any cost saving by reducing the manpower but without having an automation taking its place is a recipe for a long term problem.

    For example, if 10 typists are fired on account of computers comming in, the savings definitely can be bracketted as productivity!

    But throwing out some engineers even though the manufacturing of a particular part/product/component has been stopped cannot be called as productivity! This is because Human intelligence is an asset that protects the process! Experience, intellectual value adds and mere presence of skilled manpower gives long term stability to the organization. Hence I strongly feel this poses a long term danger to business practices in terms of doing business with standardised procedures and auditable methods.

    Your point on employability of certain Amricans is really shocking! USA still a leader in the world for business not having enough college grads is a pointer towards long term loss of expertise! In this globalised world such talentlessness will be replaced immediatly by people in China, India, Brazil and others. US govt should continue to invest heavily on quality education (of course USA still leads the world in quality education and research funding) and also ensure people dont drop out!
    Else, the competition from devloping world will hit them hard!

  4. bruce Says:

    Although I believe you are right on in essence, I must disagree on trying to over educate everyone. There are people who do not belong in college. There are people with low IQ. Those of us without university education may not possess the qualities needed to master a degree.
    Specialized schools with a defined agenda make much more sense getting workers to an entry point.

    Universities should become more select. Classes should become more worthwhile. The rounding of the student is legitimate and a boon to all, but instilling causes and not thought is suicidal.
    One through twelve students should be allowed vouchers. The present public education system is not suiting the needs of society. It may make sense to open up the monopoly and allow serious competition, letting the public decide where their children would do best.

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