Being lazy is not a virtue

A German writer, Patrick Spaet, is convinced that hard work is a fetish and we should be more open to financing the lives of everyone else. In part because modern technology replaces a lot of physical labor and also because rewarding people who work is a mistake. For example, Spaet writes:

This situation is all the more schizophrenic in that we take every opportunity every day to escape toil and work: who voluntarily uses a washboard, if he has a washing machine? Who copies out a text by hand, if he can use a photocopier instead? And who mentally calculates the miserable columns of figures on his tax return, if he has a calculator? We are bone idle, and yet we glorify work.

But his entire premise suffers rests on the fatal assumption that jobs exist to keep people busy, something I have pilloried here for years. No, the point of work is to be productive, and people who are capable of being productive but opt not to are looked down for leeching off the labors of others.

That's not just right wing resentment of people on the social safety net, but also left-wing hatred of rich kids and workers in the finance industry, who they do not see as making any real contribution. These resentments have flaws - there really are people on the social safety net who are unable to work, and finance does have an important role in society that requires long hours of office work - but even with those flaws the resenters have a fair point in principle.

Spaet is right that technology makes people more productive, but his flaw is in thinking that it would be acceptable to compensate for technological advances by reducing labor until productivity breaks even with the past. That would leave several billion people in avoidable poverty so that nose-crinkling anti-capitalists like himself can get more leisure time. It's easy to look down on growth when you're not poor.

People want a higher standard of living, including people who already live comfortably. I can respect someone wanting to work less and live a simpler lifestyle, such as a European household compared to an American one, but that's different from Spaet's sci-fi utopian fantasy where work is entirely optional. We all benefit from productivity, not mindless toil, and the distinction is important.
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A timeless labor lesson

There's one very specific person that has made me appreciate Labor Day, and that's my friend Barney with a story from his childhood. I think about it a lot.

Barney, who is now in his 50's, knew a man from the neighborhood who started working an entry-level job at a corner store. Barney and some other kids saw him working there and laughed at him.

Barney caught Hell when his father found out, and his dad told him exactly why: "Never look down on someone for having a job."

That's advice we should all take.

There's a lot of debate over the social safety net, about how much it helps people, how much it discourages work and how many people abuse it. Those ratios are very difficult to prove,and while I have my sympathies for people who are discouraged from working by government policies, I outright I resent the people who purposely abuse the system - whatever percentage they make up.

There's also the lazy rich kids who never have to work and choose not to. Again, that's not all of rich kids, but whatever number of them exist I resent.

So if I'm going to hold that negative view for the abusers and playboys, how could I not hold special appreciation for the people who do work, especially people in the jobs others look down on: The grocery bagger, the busboy, the convenience store clerk, the fast food employee?

I realize Labor Day is supposed to be about the history of unions in America, and that message gets lost in the time off, barbecues and sales that dominate our culture. My aim is not to diminish that but simply say that in a country where some are born into a life of luxury and never work or choose to scrape by and collect from the state, we all owe some gratitude to the people who work hard.
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If you think unemployment is bad, look at this

I spent most of Wednesday driving to New Jersey and back with some friends from college. After all the reminiscing and sharing of what's going on in our life, the unemployment rate came up, along with President Obama's State of the Union address. One of my friends observed that we accidentally had a serious conversation.

Purely as a joke, I made an off-the-cuff argument against using the unemployment rate, because it only counts current job seekers. It does not count, I told them in the driest tone I could muster, people who go back to school, become homemakers or just drop out of the job market. I recommended the labor force participation rate as a better figure to follow.

The words I was saying to sound far too serious accidentally came from the heart, I realized, and the conversation got me curious about what's been happening with the labor force participation rate.

What I found, sadly, was this:

President Obama started this year's State of the Union by saying unemployment is at a 5 year low. I believe him, but it appears that some of those improvements came from Americans leaving the workforce. That problem is getting worse every year.

This is not a criticism of any of the president's policies, but a crucial revision on his framing of the issue. While the unemployment rate has fallen, it hasn't fallen to an acceptable level. We also have a big problem when potential workers are left idle, even if there are less idle workers then there were before.

I do have one caveat here: My idea of an ideal future does have a lower labor force participation rate. I share John Maynard Keynes' vision of people living like lilies of the field, who toil not, neither do they spin. I want people to work few hours and retire earlier in life. However, that future comes from technological innovation, not a recession.

As it stands now, we aren't seeing a short-term drop in labor force participation because of labor-saving breakthroughs. It's because of poverty. The current course points us towards a stagnant or falling standard of living when what we want is progress and rising standards of living to occur while more people get to retire.
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Who benefits from a minimum wage increase?

David Henderson has some solid numbers that show how little proposed minimum wage increases would actually target people in poverty.

. Only 11.3 percent of workers who would gain from the increase live in households officially defined as poor.
. A whopping 63.2 percent of workers who would gain were second or even third earners living in households with incomes equal to twice the poverty line or more.
. Some 42.3 percent of workers who would gain were second or even third earners who live in households that have incomes equal to three times the poverty line or more.

That's not even controlling for poor people who were priced out of the job market.
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The 6 hour workday is still a bad idea

I saw this posted as a serious argument today by an adult who should really know better.

The idea is to change the standard workday from eight hours to six. This is a pretty old, dead idea once championed by labor unions to "spread the work." The idea is to make people work 30 hours a week and hire more workers to fill the gap, and increase everyone's pay 33 percent so they don't lose any income.

Henry Hazlitt demolished this argument about 70 years ago, reminding people that if we increase the labor cost by that much, the products and services will get more expensive as well. Once again, there is no free lunch.

But this author tries to dazzle the reader with new scientific-sounding idea, but they all fall flat when one tries to take them serious. We're told that workers are the most productive two to four hours after they wake up, so starting the workday later will make them more productive.

I wonder if the author has ever interacted with college students. When you start later in the day, you tend to go to sleep later and wake up later. There goes that idea.

That wasn't the only productivity-increasing argument.

A shorter workday works particularly well for knowledge workers - people in creative or professional jobs - who can work productively for about six hours a day, compared to the eight hours manual laborers can churn out, according to Salon. Unlike machines, humans operate on a cyclical basis, which means our energy and motivation fluctuate in peaks and troughs. Cognitive workers tend to be more focused in the late morning, getting another energy boost in the late afternoon when lung efficiency peaks.

The unstated major premise here is that productivity will more than compensate the loss of one-quarter of the workday. There's no evidence that this difference in productivity per hour is particularly large. It would need to be 33 percent just to break even. The differences in productivity- if they actually exist - might be so small to the point that they are unnoticeable, and even then they only apply to a limited number of jobs. Productivity would fall, not rise, under this scheme.

Losses to productivity and/or higher prices equal a fall in real wages. That doesn't help anyone.

Another benefit of the shorter workday, Kellogg’s discovered, was that employees were happy to work less when they were paid 12.5% more per hour, meaning the company was able to offer more jobs. Maybe the six-hour workday could be a solution to the US’s current minimum wage debate.

Maybe not, as this last paragraph practically proves the scheme will make workers poorer. The union activists from a century ago had the good sense to demand a 33 percent increase in wages so their paychecks don't change. This scheme is asking for the same reduction in hours, but a pay increase of only 12.5 percent. That's nearly a third less.

Cutting supplies, increase the cost of goods and services and reducing how much each worker receives is not only a bad idea, it's an unoriginal one.
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Where do wages come from?

We've all heard the imaginative tales innocent children will concoct when they try to figure out where babies come from. Does the mother's belly open like a breadbox to deposit the child when it's ready? Do storks or pixies or ancestral spirits bring the child from another realm? Kids don't know so they make up the best answer they can, despite lacking important information.

That's a perfect parallel to what happens when many adults try to explain where wages come from. There are oodles of stories surfacing about how workers of major corporations often collect some kind of government assistance, and they make the claim that the company is costing the government money because its wages aren't high enough.

Here's a typical example, with its description of Domino's:

Domino’s has more than doubled its net income since 2008, when the company posted $54 million in earnings. Many of Domino's employees are likely enrolled in government programs. According to [the National Employment Law Project], the company could have raised employee wages rather than spend that money expanding aggressively overseas and investing heavily in technology aimed at easing the ordering and delivery process. The stock has surged over the last five years with the share price up more than 900%. Meanwhile, the compensation of J. Patrick Doyle, Domino’s CEO since 2010, amounted to more than $6 million in 2011 and more than $9 million in 2012.

Somewhere in America, a writer thinks that wages come from the stork.

How else could you explain this reckless assumption that Domino's would have dumped its investment money onto its low-skilled employees? To the economically-ignorant, wages are a gift employers give to employees because they are nice. To those with economic understanding, wages are determined by the market and will reach the dollar amount required to attract a competent workforce

I was a Domino's driver in college and it was best money I had made at that time. It paid more than the small businesses and large corporations I had worked at before. It also took little skill and there were tons of people qualified to do the same job. If wages were raised, I doubt I would have been able to keep my job, as adults with more work experience would leave their fields and take the positions away from people like me. Without these kinds of low-paying jobs, young workers can not get a break into the workforce.

Noticeably, the article's estimate for what the government gives in assistance to Domino's Workers ($126 million) is more than the companies annual profits ($112 million) and CEO compensation ($9.1 million) combined. The author insists that the company should have avoided expanding their business and making capital investments and instead give cash gifts to employees.

Does this person also believe in unicorns? What a downright idiotic thing to write.

By the way, since the writer is so bitter about the $3 million increase in the CEO's compensation package between 2011 and 2012, why not simply divide it between all the employees. I'm sure that annual increase of $40.58 per employee would go a long way.

Welfare programs that cut off benefits when workers find some work trap people in poverty. If someone has low skills and few offers, they can lose money if they take a job and sacrifice their government benefits. It's a positive thing that these people are working while on government assistance. The alternative these shallow activists seek would lead to higher government assistance costs and more people blocked from working.

By the way, anyone worried that Domino's pizza workers aren't making enough money can try giving a generous tip.


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Full-time depressing

Greg Mankiw shared some troubling news from John Lott about the jobs added in America so far this year: A soul-destroying 96 percent of those jobs were part-time.
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A cohesive experience

This morning I was assigned to cover a summit on youth employment. The keynote speaker was a labor economist who spoke about the trouble high school students face when trying to get a first job and why it's so crucial to their future that they start working.

What stood out to me was how familiar yet foreign the concepts of labor economics felt. The presentation was upbeat, filled with solid information and easy to follow. It also used reasoning related to opportunity costs, moral hazards and signal theory in ways I was not used to. The experience was dazzling.

Imagine if everyone was assigned a collection of the same 100 Lego pieces and instructed to build something in private. After toying with your ideas for a while you come up with something and add it to a public display. You are then given a chance to see what everyone else came up with and are zapped by the surprise of what you see. Other people have taken those same pieces and arranged them in ways that never occurred to you.

Are there any other fields that offer that experience?


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Keep the middle man

This weekend I've been reading The Locavore's Dilemma by Pierre Desrochers and Hiroko Shimizu and several passages about the role of intermediaries reminded me that I have been meaning to write about the importance of middle men.

Intermediaries, they write, complete important tasks like assembling, grading, packaging, processing, storing, transporting, financing, distributing and adverting products. The uninformed public, especially Marxists, have seen these middle men as redundant parasites who stand between the customer and the craftsman or farmer. They insist this makes buying and selling impersonal and the process needs to be changed.

This mentality is just a knee-jerk reaction to the division of labor, something Henry David Thoreau compared to letting another man do his thinking for him. What they gloss over is that when you don't hire a middle man that labor has to be performed by someone else, often the customer.

This is called shadow work, unpaid labor that the customer picks up from an eliminated middle man. When you spend an hour on the Internet searching for cheap airline tickets instead of hiring a travel agent, you are doing shadow work. The money you save is the shadow work payment. For some people, that's worth it. If you are a corporate attorney, it probably isn't and you'd rather have the free time.

In 2011 Craig Lambert wrote a New York Times article on the growing problem of shadow work. That is to say, the problems that have come from eliminating middle men.

To be sure, shadow work has its benefits. Bagging one’s own groceries or pumping one’s own gas can save time. Shadow work can increase autonomy and enlarge our repertoire of skills and knowledge. Research on the “Ikea effect,” named for the Swedish furniture manufacturer whose products often require home assembly, indicates that customers value a product more highly when they play a role in constructing it. 

Still, doctors routinely observe that one of the most common complaints today is fatigue; a 2007 study pegged its prevalence in the American work force at 38 percent. This should not be surprising. Much of this fatigue may result from the steady, surreptitious accumulation of shadow work in modern life. People are simply doing a huge number of tasks that were once done for them by others. 

Doing things for one another is, in fact, an essential characteristic of a human community. Various mundane jobs were once spread around among us, and performing such small services for one another was even an aspect of civility. Those days are over. The robots are in charge now, pushing a thousand routine tasks onto each of our backs.

The beauty of middle men is that they perform tasks that would otherwise end up as shadow work. There's nothing redundant or parasitical about that.

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Cheap goods do not ruin society

It's amazing how the Cracked magazine, a weak and transparent imitation of the almost-funny Mad magazine has been reborn as Cracked.com, a clever and entertaining bear trap of a website. It's like if Maxim magazine changed to covering opera and wine tastings - and did it well.

Articles follow the template of 6 Bizarre Forms of Discrimination That Can Lose You a Job and 5 Complaints About Modern Life (That Are Statistically B.S.) - a wonderful alternative to the filler-laden "top 10" circuit. Most of them are pretty good, and the headlines always lead readers to clicking several more each time.

But I recently came across a piece on overrated future technologies entitled 5 Awesome Sci-Fi Inventions (That Would Actually Suck) and it started strong with flying cars and jet packs representing untold danger to the casual user, but it finished off with a classic Luddite fallacy when it said matter replicators would destroy the economy.

Matter replicators are machines that craft objects on command, from lumps of coal to artificial hearts. Prosperity would explode, but the author warns:

The bad news is, of course, it would eliminate your job. Your job, and all your friends' jobs, and, well, almost everyone else's. No need for farms or factories or stores. The only people who'd still be working are doctors and the people who make replicators. Oh, wait, you can just have a huge replicator that makes replicators. Nevermind.

It's just as well, even if there were jobs, there would be no way to pay you. You could make bars of gold in your replicator. Yes, we're talking about the utter collapse of the entire basis by which every society has ever existed on the planet.

There are two charges here. Replicators would both destroy jobs and significantly change society. Both are true.

Preserving the jobs our society currently employs is not a worthy goal, as destroying jobs is progress. Jobs exist to produce things, not to keep people busy, and individuals jobs come and go. The time of blacksmiths came and went, along with phrenologists, court jesters, milkmen, Pony Express riders and explorers. Some of these fields still exist in different forms. Comedians have taken the mantle of the court jester, but their job descriptions are completely different. Explorers will be needed in the colonization of space, but they won't be trained on wooden ships.

So if replicators destroy factory jobs, good. That will free people up to pursue other things society needs. It will also make goods cheap and plentiful enough to allow people to retire earlier. These replicators will probably need resources to operate, and the things they create will still need to be designed. But what if those issues are solved - what if robots gather all the fuel and building materials we need, take care of our sick and protect us from harm, but give us all these things for free without expecting us to do anything in return?

Mission accomplished!

The second part is the changes this would have on our world. File sharing has introduced some major copyright problems. People can copy music, movies and entire books, but matter replicators would let people copy action figures, televisions and automobiles.

It's impossible to know what laws would be introduced, but I would expect buying all of these things would become cheaper and the penalty for copyright infringement would increase, perhaps to the point of serving serious jail time for pirating a car.

As for all currency systems being destroyed by these machines, this just lacks imagination. It's true the ability to conjure precious metals would finally kill all hope of returning to the gold standard (that's a feature, not a bug) but a fiat currency could still exist. Perhaps each dollar bill would have a unique code that is scanned during each transaction, or we would have an entirely electronic currency that doesn't depend on any physical representation.

Or more likely, a technology we have never conceived of would make the idea of an electronic currency seem crude and outdated.

Society is helped, not harmed by rising living standards, abundance and cheap goods. A future with matter replicators would be a better one.



Update: Jeremy's comment asked if production of food is so much higher, why aren't we retiring earlier. Shouldn't cheap food make life easier?



Just as a warning, this is not a "zeroed" graph so it makes a stronger case then it should with an artificial Y axis.

We do have cheaper food, as well as most products. The difference is that our wants and needs are growing. We are already rich in Victorian England standards, but we new things like computers and iPhones. I am supposing that we will encounter some kind of "singularity" that will let production increase at such a rate that our desires will be met. I may be wrong about this, of course, and our desires could continue to grow.

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