Comments (15)

• spike

  There are a few problems with this utopian vision of the labor market, and American society as a whole. Realistically, it is not possible for people to "hop from job to job without any problem". There are inconvenient things, like families, health insurance, credit ratings, home ownership, and so forth, that stand in the way. Moreover, the ownership class prefers the current system of enforced stability, because it gives them leverage over workers who cannot "hop from job to job without any problem".

  Published: July 30, 2007 4:23 PM

• N. Joseph Potts

  Jeff, you need to try getting fired, or otherwise needing to find a job, after age 45 or so. Of course, I have this experience (I never DID find a job), and it sets one to pondering "age discrimination" with renewed interest. I came to the conclusion from my own case and a good few others that I observed, that discrimination against older workers at lower (non-managerial) levels is largely valid - we're set in our ways, cantankerous, and lacking (comparatively) in get-up-and-go. Not ALL of us, of course, but the general run of us (I'm now 62, still healthy and overqualified).

  However, none of that cancels the need that occasionally besets an older worker to find a new job, and all I can say is that, while the free market DOES function properly with regard to such workers, one ends up not especially appreciating the way it works. To people with egos, it's humiliating, and to people with self-referred concepts of justice, it's infuriating. To people lacking insight, it's surprising and enigmatic.

  You'd have had a much harder time coming to the conclusions you've come to had you been fired at age 50 rather than 30 or whatever it was. But maybe you would have - they're certainly the right conclusions. I've thought so every time I've gotten fired.

  Published: July 30, 2007 7:27 PM

• jeffrey

  Very interesting NJP. You have given me much to think about, as usual.

  Published: July 30, 2007 8:14 PM

• banker

  spike-"There are inconvenient things, like families, health insurance, credit ratings, home ownership, and so forth, that stand in the way."-

  Simple:
  1) Save money instead of buying 2 extra cars, going to Disney World every year, rather put your entire life and standard of living in the hands of a single employer.
  2)health insurance -> problems more related gov meddling
  3)home ownership is not a right. Someone has to agree to sell you the house. Buy a smaller house or rent.

  
  Point being if you let your fate be determined by your employer, then your philosophy on life needs to change. You cannot control someone else's free will, but you can influence your own circumstances. Too many people forget this when they go running to politicians crying for help.

  Published: July 30, 2007 8:38 PM

• darjen

  I got fired from my first two jobs out of college. The first time I was there for about a year but had already been looking for work for a few months, because I really did not enjoy working there and the company was losing quite a bit of money.

  The second time was my first real programming job, and my boss didn't think I met his standards. Which was fine... he was also hard to work for as well. This was definitely a blessing because two weeks later I found another job making 5k more. Now I am making about 15k more and have managed to greatly improve my skills. I am now with the best company I have worked for yet, a consulting / web development firm in the Cleveland area.

  I definitely need to start saving more in case there is a market downturn though, so I won't have to be dependent on other people.

  Published: July 30, 2007 9:50 PM

• Person

  Isn't a lot of the "discrimination" against earlier-born workers due to ridiculous and obsolete pension vestiture rules whereby the employer is on the hook for a lot of benefits the day the employee signs on?

  Incidentally, I was thinking about taking some vacation time from my real job to work as a temp in some office, just to see what it's like. Maybe they'll "fire" (cancel before end of term) me!

  Published: July 30, 2007 9:57 PM

• darjen

  Also, there was a recent article on inc.com about pink slip millionaires that I enjoyed quite a bit.

  Published: July 30, 2007 10:01 PM

• P.M.Lawrence

  Banker, you are wrong and spike is right. The reason is, it isn't a simple two-party interaction the way the article describes. If it were, the only possible reason for things not adding up for A, the employer, is that there is a discrepancy over in B, the employee.

  But in this world of men, this vale of tears, we are all floundering in other people's messes. C has chipped in and set up all sorts of market imperfections. There is a thumb on the scales, tipping ever so undetectably but cumulatively in favour of retrenchment, or not hiring in the first place.

  So - like playing house odds - there are winners as well as losers, but on the whole people still get squeezed out. Not everybody, not all the time, but always someone. And it makes it hard to scramble back, for reasons that are not down to B. Sure, if B lifts his game, he will do better than B' over there and get the job - but there is always some B or B' who gets squeezed out.

  None of this would happen if the thumb were taken off the scales. Then, it would really be close enough to what the article describes, and it would all work out. I gather it was once near enough that way in the USA that many people's habits of thought still reflect that past reality, but that's not how most of the world grew up, so we find it easier to spot the glaringly unrealistic parts of the description.

  Published: July 30, 2007 11:21 PM

• banker

  Please elaborate on this "scale". Who is person C if not an A or B in another work exchange transaction. There is not two separate populations labeled "employers" and "employees". While not every employee is an employer (ie someone else's boss), every employer is an employee for someone else.

  The same way I see people quit jobs over small trivialities, I see no problem with employers firing employees even the smallest issues. And so long as people have needs and wants there will always be room for a new employee. This third party you speak of "putting the thumb" on the scale must some government agency. They have a tendency to disrupt private interactions between individuals.

  PS You could always start your own business, no matter how small.

  Published: July 31, 2007 1:34 AM

• Anthony

  "This third party you speak of "putting the thumb" on the scale must some government agency. They have a tendency to disrupt private interactions between individuals."

  Bingo. The government or its beneficiaries. It would be interesting to read some work on how distorted the present job market is and how it'd be in a free society. Too many people are under the illusion that their employment woes are in a context of a perfectly free economy.

  Published: July 31, 2007 5:40 AM

• N. Joseph Potts

  There's no question about it: government-mandated structures on medical insurance benefits (the need for which from employers is caused by the government in the first place) aggravate the already-good-enough case for discriminating against older workers.

  Many pension plans similarly militate against INCUMBENT older workers. Higher rates of pay arising from seniority ironically do the same to anyone whose game might slip at any point. After a certain point, it might not always be wise to go for the top dollar.

  Published: July 31, 2007 8:54 AM

• JJH2

  There is nothing -necessarily- coercive about restrictions on the right to fire (and to quit) - provided that both parties agree to them. Being fired no more reminds someone of the "contractual nature of work" than NOT being fired pursuant to a contract for employment of a definite duration does. After all, there are many employees who aren't "at will."
  A person certainly isn't "indebted" to an employer just because Mr. Tucker happens to think that they are overpaid. Rather, an employee who is paid more than they contribute to a firm is just reaping the entrepreneurial benefits of the fundamental assymetry of information between employers and their subordinates. Besides, who is Mr. Tucker to decide when an employee is being paid more than his value to the firm?
  Finally, these are contractual relationships. They're 'just business,' and as such, both the employer and employee are playing a game where their interests are, to some extent, at odds. The employer wants to reap maximum value from his employee at the lowest possible cost, while the employee wants to reap the most pay from his employer while engaging in the least possible work. There is nothing wrong with EITHER of these perspectives. Consequently, there is little reason for heaping adulation at the feet of an employer for hiring or firing you.

  Published: July 31, 2007 10:30 AM

• Kevin B.

  While I agree with those who point to the distortions in the market, the point is blame should be directed at the "Thumb" and not your average employer. It is a two-edged sword, btw, and employees quitting (firing me) can also be aggravating.

  If you are fired (whether as an employee or an employer) due to the thumb on the scale, then blame the thumb. Otherwise remember that perception is everything and that you're always in sales. Be polite to those who no longer desire your services. The most important branding is your own.

  Published: July 31, 2007 2:12 PM

• P.M.Lawrence

  I'd better clarify my reply to banker a bit more. Although many people have gone into it and made quite correct comments, there is a deeper story behind the first story.

  First off, Kevin Carson goes into the whole area at a very deep level in a book review he has here.

  Secondly, a real life example of this sort of thing is being discussed here on comp.lang.forth, complete with Job's comforters.

  That example brings out some real life obstacles that can come up. If you go into that sort of question with the built in idea that the labour market works in such and such a way, you are bound to come to the conclusion that, if there is a discrepancy, it must mean that someone isn't doing it right. That very easily turns into "blame the victim", but that's actually a hidden circular argument. However, if you look at real life examples as tests of your theory, you don't generate that circularity - but remember, no single example will test the full range of behaviour.

  So we need the deeper stuff like Kevin Carson provides. That's a little heavy for this thread, so I will just bring out one thing that is deeper than just saying "the state distorts the labour market". At the moment, in most countries, the state mainly distorts it from two directions: it places direct burdens on employers, like minimum wages and all sorts of compliance with workplace legislation; and, it indirectly penalises employment by throwing the burden of funding unemployment onto a broad tax base (I describe a Pigovian way of undoing that bias here). In some countries there is less support for the unemployed, but those countries have higher policing costs - they face "vagrancy costs" rather than "social security costs". Either way, there is an externality favouring unemployment, because each employer spreads that cost for each person he retrenches. When an economy is in enough of a Keynesian boom, that can mop up the unemployed - but that is an artificial stimulus, wasteful of resources and not sustainable. So, even though the state is at fault, it isn't always the direct perpetrator of the thumb on the scales. For one thing, it could go brutal and let the unemployed fend for themselves - but then your policing costs go through the roof. That's why Bismark, no altruist, introduced that sort of support.

  The deeper part of the story is this. It's why we can't all just go into business for ourselves, the way banker suggested right at the end of his reply to me. Some of us can make a living doing that, providing services to the rest, but not all of us can; it's a "fallacy of composition" to think we all can. As my father used to say, repeating an old adage, "we'll never get rich taking in each other's washing". Besides which, some of us just don't have the particular skills, like the person in the example I gave who just can't work directly with the public.

  But there are other jobs you can go into for yourself. The catch there is, unless you get lucky in your timing and an opportunity drops in your lap - something you can't arrange for, short of sabotaging someone else - you can only go into business if you can apply your own work to unallocated resources which are there for the taking. But there aren't any these days. You can blame states for that now, since they made a framework that allocated everything in the past, one that works like ground cover plants blocking out new growth until something outside the system makes a gap in the canopy. This is really where the Georgists came in, advocating tax changes that would undo that (though they concentrated on land as the particular resource to free up, and overlooked that they would only be empowering the state with new revenues). But there's a catch for the future, too: if we go on like this, even without state parcelling up of resources, we will eventually find all resources tied up by individuals - a Malthusian constraint. But on the one hand we haven't hit it yet - and the risk of future death is no justification for pre-emptive suicide - and, with proper individual systems of possession, the gradual approach of that ultimate barrier works to slow people coming to need it, through delayed family formation or whatever. (Not doing that is what stops my Pigovian bridging fixes from working in the very long term - but I digress.)

  And that problem is down to the state too, at least considered as a concrete expression of rent seeking interests: "property", capital, as now constituted and implemented by states over time is in fact the antithesis of respecting individuals' right to get hold of resources and own them for themselves. They've even cunningly arranged things so that if they stop supporting it just like that, with no transitional arrangements like my Pigovian bridging fixes, they "prove" that they are indispensible because it is rigged to collapse if disturbed. Hey, that's where Proudhon's paradoxical "property is theft" comes from.

  But I'd better stop before I make this reply too deep.

  Published: August 3, 2007 4:17 AM

• Robert

  While I agree with those who point to the distortions in the market, the point is blame should be directed at the "Thumb" and not your average employer. It is a two-edged sword, btw, and employees quitting (firing me) can also be aggravating.

  
  

  This would be reasonable if government and capital did not regularly collude to constrict the options of labor. Politics distorts the ideal functioning of the market, and when one party is severely disadvantaged by a particular set of power relations, it will be subject to abuse. Libertarian economists too often dismiss the role of power in bounding choice, and perversely view the (perfectly rational) decision not to play a rigged game (or to overturn the board and pummel the smirking cheat) as a betrayal of principle. The real betrayal, however, is the fraud perpetrated by corporate apologists who insist that the employer is just as beset by the government (which he bankrolls) as the lowly worker, whose input into the political apparatus is negligible.

  Published: August 8, 2007 2:47 PM