Every so often I read something which makes me wonder once again whether economists get out much. Bryan Kaplan’s most recent post had that effect on me, viz.:
Consider a model where workers are either rich or poor, and employers are either nice or mean. Rich workers might be more conscientious than poor workers, or simply less tempted to steal from their boss. Nice employers trust their workers to do the right thing, but hire carefully. Mean employers hire anybody, but watch them like hawks. What happens?
In equilibrium, nice employers hire the rich, and mean employers hire the poor. It makes sense: Nice employers need rich workers they can trust, and poor workers misbehave unless there’s a mean employer on their backs. Nevertheless, the firms where mean bosses employ poor workers look very different from the firms where nice bosses employ rich workers. An ethnographer who visited the mean boss/poor worker firms would probably tell a vaguely Marxist story about class conflict. An ethnographer who visited the nice boss/rich worker firms would tell a much more pro-market story about cooperation and meritocracy.
I think this simple model explains a lot about the real world. People who employ, serve, or rent to affluent workers, customers, and tenants can afford to be nice, because they’re trading with people who are conscientious and/or are so comfortable that they aren’t tempted to cheat. People who employ, serve, or rent to impoverished workers, customers, and tenants, in contrast, can’t be Mr. Nice Guy, because the people they’re trading with would take advantage of them.
The emphasis is mine. To my ear this simply screams somebody who has never met either a rich person or a poor person.
For the first ten years of my life I was surrounded by people who could probably best be described as the working poor. Then we moved to what was probably the richest of St. Louis’s suburbs. Some of our neighbors were extremely rich. I went to high school in an all A-track school in which kids from very rich families studied side by side with kids from very poor families and everything in between.
It has not been my experience in life that the rich are nice. Sure, there are some nice rich people. There are also some poor people who are schnooks. Contrary to Bryan’s apparent experience I have found most poor people to be conscientious, hard-working, pleasant, and extremely law-abiding.
What I have observed and observed increasingly as the years have worn on is an incredible sense of entitlement among a tremendous portion of the well-to-do. The conviction that the rules pertain to everybody except them.
I also believe that I can refute Bryan’s core contention in two words: Bernie Madoff.
However, I’d like to throw the question open to the floor. Are the rich nicer than the poor? Are employers of the poor and vendors to the poor forced to be mean in order to flog their unruly employees or customers into compliance?
I think Kaplan has it backwards. Employers are “nice” and more trusting to richer employees because they have to be, not because they want to be. Rich employees are more costly to replace and they are likely working in fields where their skills are in high demand. In essence, employers have to compete over rich employees. By contrast, the poor are more likely to be employed in unskilled or semi-skilled labor and are more easily replaced – therefore employers can afford to treat them badly.
This is an interesting subject to me. I was raised in the middle class, fell into the working poor class, became middle class once again, and am now sort of hovering between lower middle class and blue collar in income.
I’ve worked for minimum wage, and my experience is that minimum wage bosses know they are often dealing with desperate people who will put up with abuse. I think they (the bosses) also know that the low wages they pay aren’t much of a motivator for good behavior or loyalty. So they get a little paranoid.
I’ve had a minimum wage boss literally hold my paycheck over my head on payday and crow, “Jump for it! Jump for it!”
(When I snapped, “Then just keep it!” he handed it to me pretty fast.)
The thing is, I’ve also witnessed (and experienced) abusive treatment in thoroughly middle-class work settings, too. This usually took the form of emotional bullying- cliques, public scoldings in meetings, ethnic jokes, etc.
A lot of it strikes me as insecure people trying to establish and defend their ‘status’ by stomping on those lower down the ladder.
I don’t think it’s a good idea to generalize about either the “virtuous poor” (a la Jean Val Jean) or the “mean-spirited masses.” I’ve worked on a loading dock surrounded by men of limited education and means, and felt perfectly respected and very safe. I’ve also worked on a production line with people of similar backgrounds and felt under constant threat.
And the worst personal drubbing I ever endured on a job took place in a posh academic setting.
So it all varies.
I don’t think there are any easy generalizations. I just wish there was more of an appetite out there for the observations and experiences of, well, “class-hoppers.” Like me.
It depends on what you define as “rich”. My family was probably the poorest in a well-off neighborhood (lower-middle class in an older house, in an upper-middle class neighborhood full of McMansions), but we were never treated badly or seen as “less” for it.
That’s only my personal experience, though, and there were other niggling factors (like the fact that almost the entire neighborhood belonged to the same church, us included). I don’t have enough experience with the truly rich to make even an anecdotal judgment.
That’s a good point. Rich workers tend to be in jobs where their morale and motivation, along with their scarcer skills, is a big factor in the company’s success, so that companies have to encourage them more than usual.
Whereas the poor are more likely to work in jobs where it’s a defined, often repetitive skill they are providing, and where turnover and barriers to job entry are low. That’s the type of thing that encourages harsher, “get what you can get out of them before they leave” treatment. *
* That said, one of the trends in a lot of the major companies employing lots of legal cheap labor – like Wal-Mart, or Home Depot – is to try and encourage morale and “team spirit” among their low-level employees. Maybe the situation is changing a bit.
Ask a waitress who tips better, on balance, a rich person or one of moderate means.
I think you missed what came after the and/or part of Kaplan’s hypothesis, that it isn’t just that they are nice, but that they are less tempted to steal/take advantage of the employer.
Have no idea how you’d go about about trying to confirm this empirically though.
No, I caught it but I don’t think there’s any basis whatever for believing that the rich are less likely to cheat or steal. Avarice is a sin because it knows no limits.
That’s why I use the example of Bernie Madoff. As Balzac said “The secret of grand fortunes without apparent cause is a crime forgotten, for it was properly done”.
However, I do believe that the rich are less likely to get caught stealing and, when caught, are less likely to be punished. If that’s the case you’d think that the rich might be more inclined to cheat or steal.
I spend a lot of time on the labor floor. We have quite a mix of patients. Our experience, we have talked about this before, is that the working poor do tend to be nicer folks. The destitute poor, those chronically out of work, tend to be a mixed bag. Some are super nice and some act as though they are entitled to everything. Middle and upper middle class tend to be nice, but often anxious. The rich, meaning worth millions, are seldom nice with people they perceive to be unimportant, but are nice with physicians, ie they are selectively nice.
Steve