Thursday, April 28, 2011

Crappy, Low-Wage Jobs - and Why We Need Them.

Jobs at places like this are not great, nor do they pay well.  However, it is foolish to think we can mandate high wages for unskilled jobs.

In a recent CNN Article, a bleeding-heart liberal decries the rise in the number of crappy, low-wage jobs.  And her take is the one that the far left uses every time - how can the head of a family of four  put food on the table and keep a roof over their head at $8 an hour?

And if you aren't terribly bright and you don't think very hard, that argument makes a lot of "sense".

But of course, there are some major holes in the argument - and when examining any argument, examine the underlying assumptions or premise, as that usually is where the holes are.  And here, you can drive a city bus through those holes.

The presumption here is that every job has to support a family of four and that every person working has a family to support or even that every person working has to make a living from their wages.

But this is often not the case, and a huge number of people working low-wage jobs are not doing so to support themselves entirely, but rather to make some extra income - or even to just keep busy.

For example, the following people don't need to support the mythical family of four:

1. Teenagers and College students looking for extra money to buy things at the mall or buy a car:  Kids get after-school jobs to earn extra cash.  I did, starting at age 13, delivering newspapers (for far less than minimum wage!) and later on, at age 17, working in restaurants (for minimum wage) and later on, in college, delivering pizzas and chicken wings.  These jobs simply wouldn't have existed for me, if the government forced people to pay me enough "to support a family of four" - and I didn't have a family of four to support, anyway.  In college, I worked as many as three jobs at a time, and you know, it didn't hurt me all that bad.  In fact, it persuaded me that getting an education was a good idea, as I didn't want to work such jobs - for the rest of my life.

2.  Retirees Looking for Extra Income, Keeping Busy:  This is a growth sector of the job market.  And yes, I know a lot of retirees who work jobs like this, not just for the money, but to feel productive and to keep busy and to meet people.  Handing out putters at the putt-putt, or washing the golf carts at the golf course is not worth $20 an hour, to be sure.  And if we had to pay people "a living wage" to do these jobs, the cost of playing putt-putt would go to $40 a game.

3.  Multi-income families, children living at home:  In many families, both husband and wife work, and adult children living at home work as well.  While you can't support your family with ONE of these jobs, if multiple people living together work at multiple jobs, they can make enough to live on.  Are they going to get rich?  Of course not.  But getting rich is not a guaranteed right in the Constitution.  You have to work at it - and try for more than entry-level jobs.

4.  People starting out (new hires):  A new hire is often not very productive, as you have to train them in nearly every aspect of the job.  So, for an employer, hiring new people is a money-losing proposition.  Throw in all the government regulations we saddle employers with (enforcing immigration laws, collecting taxes, providing health insurance, retirement plans - everything Congress cannot or will not do, they foist off on employers) and it is amazing anyone gets hired at all.   It doesn't make sense to pay someone with no skills, $20 an hour or more, just for the privilege of learning.

If you take these sort of entry-level jobs and mandate higher wages, what ends up happening is that these sort of jobs go away  - or the cost of goods rises precipitously.

As I have noted, I have worked a number of low-wage jobs in my life, and would take one again, in retirement, with no qualms.  Mark recently took another such job, working part time at the gift shop at the lighthouse, mostly as a favor to the manager there.  Prior to that, he worked part time at the wine shop, which, while it did not pay a lot, was a good thing for him in a number of ways.   Do we need the money?  Sure we do.  And it does pay the grocery bill - no small feat.

And as I noted in my Disposable Income and Part-Time Work posting, the additional income from such a job may represent less than a 10% increase in our gross combined incomes, but in terms of disposable income it may be closer to 25% to 50% - which is nothing to sneeze at.    A married couple may not be able to live very well on one $8 an hour job ($16,000 a year) but if both work, they can be pretty comfortable on $32,000 a year, provided they don't squander what little they have.

Does it make sense to mandate "a living wage" for every job out there (as some Ithacans proclaim, on four-foot wide bumper stickers on the back of their $40,000 Volvos)?

We could, of course, and not too long ago, we did, in this country, when the Unions were strong.  We also had something called 10% inflation.  When you raise wages far enough, the cost of goods skyrockets - very simple things become very expensive.  As a result, the worker making more money finds that his money doesn't go as far - so he has to demand yet more money to make "a living wage" - and the process cycles again and again, and inflation takes off.

As I have noted in the past, very simple things made in America in the 1950's and 1960's were staggeringly expensive.  A Zenith mono FM portable radio cost $79 back in the 1960's  - which is a staggering amount of money today (enough to buy a cheap flat-screen TV today!).  A Coleman cooler or Weber Kettle was like $99 - about the cost of a used car back then.  Today they are cheaper in terms of dollar cost and far cheaper in terms of inflationary cost.

People decry the increase in the number of goods imported from China, and the resultant loss in manufacturing jobs here.  But what they fail to take into account is that since goods are so much cheaper now, people can have an effectively higher standard of living today than 20-30 years ago, even if they are making less money in terms of cash take-home.

People today are wealthier - even the poor - than two or three decades ago.  When I was a kid, having an air conditioner or an "Amana Touchmatic Radar Range" was considered something rare that only "rich people" had.  Today, people on welfare have these things.  Back then, having two cars in a family was considered "wealthy" - but today, you may see three to five parked in front of even the most modest of homes.

And yes, maybe in the 1950's and 1960's, people actually went to bed hungry in places like Appalachia.  Today, the biggest health problem among the poor is obesity - we simply have too much food to eat.

Now, I am not saying that we live in a perfect world or that everything is just hunky-dory (again, weak thinkers will jump on that argument - "so, you think everything is perfect!  You mean, nasty Republican Beast!" -oh, grow up!) only that things are not as bad as many folks want to make them out to be - particularly folks who never worked a minimum wage or low-wage job in their lives.  

One of the biggest problems with American competitiveness is that, on a global scale, we are vastly overpaid and under-worked.  Many Americans decry recent immigrants and illegal immigrants as "taking away jobs" - but in reality they merely take jobs that "real Americans" refuse to work at.  Immigrants understand the labor market from an international perspective, and realize that a good paying job is something to be treasured - and what they consider good paying is what most Americans refuse to accept.

And the "Real Americans?"  - they hate their jobs, sabotage the assembly line, or go on strike for six years (I kid you not).  What was the Number One song on the Country and Western charts during the last recession?  Yup, "Take This Job and Shove It!" - which pretty much sums up the attitudes of most Americans towards work.

But when the jobs go away, and when wages drop, two things happen.  First, people start to appreciate their jobs more.  Rather than resenting their employer and trying to tax the factory to death, people start to think about attracting employers and being nice to employers.  Second, when wages become more competitive in the marketplace, the cost of goods drops and suddenly, making things in the USA makes more economic sense.

The foreign automakers make money with their car factories in the USA, simply because they pay non-union wages.  Good paying jobs, to be sure, just not outrageously high-paying jobs.  Union plants, on the other hand, paid fork-lift drivers what a Doctor was making - and not surprisingly, those companies lost money and went bankrupt.  It doesn't make sense to pay an unskilled laborer the same amount as a Doctor, just to put bolts on cars as they move down an assembly line.  There should be some reward for going to Medical school, after all.

So what about that poor slob who has to support a family of four on a low-wage job?  Well, there is a reason we mandate education in this country.  We expect every member of society to do the best they can to support themselves and fulfill their part of the unwritten social contract.  And this means paying attention in class, learning how to read and write, learning some basic math, learning how to take care of yourself - and most importantly, learning some salable job skill.

And you know what?  It ain't hard to do, even for the dumbest among us.  And jobs are always available for people with some basic job skills.  If you can't do anything else, learn how to repair an air conditioner, or drive a truck, or something for God's sake. 

But many people choose not to but instead wait for jobs to be handed to them.  They take the path of least resistance and make the least effort.  And that is sad, of course, but is it our fault?

And more importantly, does it make sense to financially reward someone who really makes no effort to try?  Because when you do, you punish the person who is trying to get ahead and trying to learn a skill.

Of course, in Communist countries, this is exactly what happens.  As they used to say in the Soviet Union, "We pretend to work, they pretend to pay us" - there was little or no incentive to work hard, so not surprisingly, no one worked very hard, unless of course, they were threatened with a firing squad (as is happened to a number of early pioneers in the Soviet space program).

And that, in short, is where well-meaning liberalism leads to - a sort of proto-Communist Socialism where everyone is "equal" but all that means is everyone is poor.

Yes, it sucks that in America, some people make very little while others make a lot.  But in Communist countries, everyone makes very little and no one makes a lot.  Which is better?  The idea that everything sucks, but we all suck equally?  Or the idea that, if you work hard, you have at least the opportunity to get ahead?

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