Jobs and Politics

Earlier this week, I heard a couple radio guys discuss the rumored severance package for talk show host Conan O’Brien for an estimated thirty million dollars. “If I got a 30 million dollar severance package”, quipped one of the guys, “I’d announce my retirement!” Certainly, many people would stop working if they found their way into a lot of money – a lot of people only work because they need to pay the bills. But I remember reading about people who win the lottery, then their lives are effectively ruined – turns out that even winning a ton-o-bucks can be traumatic and the cause of all kinds of problems. Strange as it sounds, the routine of life gives a person a sense of identity and purpose that affects everything important when it’s disrupted, and so the work we do, even when we don’t like our job, provides us with a sense of who we are and what we are worth. Consequently, the question of whether a person is employed, unemployed, or under-employed is a very important one, beyond the obvious financial perspective.

Imagine you woke up tomorrow and discovered you now had all the money you’d ever need. Doesn’t matter if you won the lottery, an inheritance, whatever, you now have complete financial freedom for the rest of your life. Your kids too, for that matter. Let’s also say that you have done a whole bunch of travelling and vacationing; you have gone every place you were ever curious to see but never had the money or time to do, and you are at peak health and fully relaxed. So, what do you do now with the rest of your life? A lot of people have trouble answering that question, falling back on making more money or doing more traveling. It’s simply too strange to seriously consider living your life with a truly open horizon.

The opposite is also true; the loss of employment or a serious change in your work conditions can create an environment which may well seem impossible to face. While the at-will concept has its virtues, it is pretty much undeniable that the concept makes it possible for employers to treat their people as disposable assets, and some businesses do just that in practice. It’s my opinion that most such businesses doom themselves to mediocrity or worse if you think it through, but that’s small comfort to an employee who is turned out simply because the company chose to cut them loose. The best remedy to that, is to become as close to indispensable as possible. The aphorism that no one is indispensable needs to be linked to the fact that certain people still matter very much. Oddly, while companies are generally careful to consider the value of their property and equipment, it’s all too common to discount the value of the talent and experience of your staff. But that’s getting away from the topic.

Economic crisis causes social tension, aside from the financial stress. For example, the Great Depression not only caused people to lose their businesses, savings and homes, it also forced migration to cities and regions where people believed they could find employment or better financial opportunity. The recession of the 1980s forced the city of Houston to diversify its industries, because the loss of the oil industry as a constant economic anchor had a disparate impact on Houston than the rest of the nation (Hint, that’s how to repair Detroit’s infrastructure – build on more than vehicle manufacture). The industrialization of the United States came to pass in part because of economic opportunities in urban factories that could not be matched in rural communities after the 1870s, a generation of human capital having been wiped out by the Civil War.

This brings us to politics, which finds its way into every human endeavor, and not often in a benevolent manner. The plain fact is, that as much as people dislike having to work to pay the bills, they really don’t like seeing their jobs put in danger. And, hate being the most convenient emotion to conjure in election campaigns, candidates from long history have run on promises of job creation and warnings that their opponents will take jobs away. This is hardly restricted to American politics, nor indeed did it begin here. Even in Ancient Rome, nobles took careful consideration of the public mood, and made sure to couch their plans in terms of the public weal. Taxes were always to be collected from someone else, and the providence of the dear leader, whatever his title or country, was always focused on making sure the people were fed and occupied with work, whatever else was done. Some cynical types have claimed, not without evidence, that wars have been brought about for this reason of giving people an occupation; in more modern times this has become unfashionable, so we have seen the rise of welfare in its place, the problem being that simply giving money to unproductive citizens is not only unsound economics, it fails to provide the occupation which is, in the end, the main point of things.

Moving to more modern times, the short version of things is that Democrats have presented themselves as the champions of the employees, while Republicans have presented themselves as champions of economic freedom. Of the two, voters have traditionally resonated more easily with the Democrats, ignoring the cost of Democrats’ taxes and bureaucracy – it’s not often considered, for example, that besides raising tax rates far more than Republican administrations and Congresses, Democrat administrations and Congresses have established costly and burdensome bureaucracies, such as Medicare and Social Security which, while perhaps useful in concept, have greatly increased their cost far beyond projections not only in financial terms, but also in legal complexity and burden of compliance. However, the Democrats have focused on the sense that voters have that they stand at a disadvantage when their jobs are in peril, that the Democrats are more concerned with protecting their specific jobs. Republicans have forfeited that advantage in order to press the more holistic condition, that the nation as a whole can ill afford cumbersome rules and tax rates which always go up. Republicans understand that the overwhelming majority of businesses are small businesses, especially one-owner businesses, and that the overwhelming economic base for employment comes from protecting the freedom of economic opportunity. All other arguments aside, this moral position explains the reason why Republicans are generally opposed to taxing Carbon Dioxide and other harmless gas emissions. The Democrats are concerned with creating an industry in compliance with government programs, economically, while Republicans are concerned with protecting businesses from the absurdity of paying for release of a harmless gas, and taking resources that could be used to grow the business and pay productive employees, and waste them on frivolous hobbies of politicians. To put it another way, Democrats focus on the immediate short-term benefits of an action on a minority of citizens, while Republicans focus on long-term economic costs and effects of an action on the nation as a whole. In the short term, the appearance of this contrast benefits Democrats, as their programs are served well by sound bites and local appearances, where those benefited by their proposal can be seen and heard, while those who pay the longer cost are invisible to television. However, when such programs are taken to excess, such as the ill-conceived and worse-executed Stimulus Bill promoted by Barack Obama, the long-term effects become apparent more readily and the lack of proportional benefits also becomes obvious. When that happens, the Democrats tend to lose credibility and Republicans are – for a time – in the ascendency.

Job Schemes

For all the talk – and dear Lord there’s been so much noise from the politicians – the economy basically comes down to people working and making money. If folks are not working, you can forget about companies making profits, about cities, states or even the federal government having any way to provide for the public welfare, not to mention all those things politicians promise every election. In the end, everything – and I mean everything is paid for by people who work. That’s why President Obama is starting to show stress in his speeches; he knows that “blame Bush” can only work so long, and as unemployment nationally creeps up to ten percent he’s headed for trouble. I’m sure he thought his “create or save” caveat for jobs was a clever way to make promises he could never be called on, but the fact is Obama’s plans don’t work, mostly because he does not understand the forces at work, and so he cannot hope to direct them to better results.

There are basically three kinds of jobs – necessary permanent jobs that need to be done by someone all the time, like firefighters, police, doctors and accountants; temporary needs that may or may not be filled long-term, like construction, retail, or manufacturing; and make-work assignments to fill one-time needs or give individuals something to do, like hiring an intern or paying your kid to wash your car. Government can create jobs, but only to a point, whether in number or duration. The most significant jobs, it must be understood, are not created by government or artifice, but by the economy’s needs and the community. The rise in unemployment happening now is the combination of hard-hit sectors shedding non-essential jobs (like real estate and automakers) and the large-scale reduction in unskilled labor. People get angry because they want their seniority to matter, but in the end the key question is whether your work is essential to your employer. Government cannot change that critical value.

The history of employment has always included changing times, as demographics and industries changed. After the Civil War in the United States, for example, many people moved to cities for work because they had lost too many young men to be able to work their farms effectively. Railroad workers, farmhands, cattlemen, surveyors, and even the Pony Express came to their end as they became obsolete. Those who could do so learned new skills and found new work in emerging industries, like automobile manufacturing and power generation in the early 20th Century. Other changes were more gradual and subtle, but no less significant, like the outsourcing of most customer service work and the use of contract labor for low-level clerical tasks. In every case, the change was in reaction to changing realities of life and business. While better-run businesses learned better how to adapt and anticipate change, in no case was the change directed or controlled by the government; strategic change is organic in nature and human actions are influenced by that change, not the other way around.

In the short term, government can create jobs, but that creation is limited by the degree of public support. The military, for example, is popular and large in wartime, but when the war ends (or public support for it) then the military contracts whether it wants to or not. Even FDR’s vaunted Civilian Conservation Corps had a relatively short life, due to its non-essential character. Job creation for the sake of job creation is by definition a failed effort even before it begins.