John Tamny’s most recent column has an eye-catching title, “What Jennifer Aniston’s Love Life Tells Us About Unemployment”. There’s a word for that: clickbait. Curious, I took the lure and found the column to be pretty obnoxious. First off, he doesn’t mean “love life”. He means marital status and unless you were raised in a cloister you know the two are not synonymous. His column can be simplified into a single sentence of econo-speak: the jobs on offer are being offered at a wage below the market-clearing price for labor. He blames this on workers:
Aniston could once again have millions of suitors were marriage her objective, and then on a smaller scale, many unmarried women and men who desire wedlock could have just that were they similarly willing to accept less in the way of a life mate than what they presently seek. Work is no different. Leaving aside the numerous flawed ways in which unemployment is calculated in the first place, that the jobless number presently stands at 5.7% doesn’t signal that there are no jobs for 5.7% of those actively seeking work; rather there are no jobs that meet the standards of roughly 5.7% of the work-interested. There’s a big difference.
His claim is a tautology; it’s true by definition but I think there’s more to it.
In my view there are many different situations. For some, Mr. Tamny’s assertion is correct. For others the blunt reality is that taking one of the jobs that are on offer doesn’t make economic sense. There are all sorts of reasons that could happen, e.g. the cost of child care is higher than the wage being offered. Here’s another example. The wage being offered for a job in another city would need to be quite high for it to make sense for my wife and me to move to take it. My wife has a good job and our combined wages in the new location would need to be greater than our present combined wages for moving to make financial sense. My point here is that voluntary and involuntary is not exactly an Aristotelian binary choice. There are gradations of being involuntary.
Finally, for some the wages for the jobs that are on offer just aren’t enough to live on and are less than they’d receive for not working. I guess that’s what Mr. Tamny means when he suggests that unemployment is a luxury. There’s a lot of blame to spread around for that: landlords may be charging rents that are too high, food is too expensive, healthcare is too expensive, taxes are too high, there are city, state, and federal minimum wages, there are lots of regulations, and so on.
The solution I’d like to see is for wages to rise and that is more likely to happen in a tighter labor market. There are several ways that might happen. Either our economy can start producing more jobs or we can reduce the number of workers we’re importing or some combination.
I thought this explanation from Larry Summers
was spot-on:
“The core problem [is that] there aren’t enough jobs, and if you help some people, you can help them get the jobs, but then someone else won’t get the jobs. And unless you’re doing things that are affecting the demand for jobs, you’re helping people win a race to get a finite number of jobs, and there are only so many of them.”
He appears to be alluding specifically to education and job-training as something that government should support, but does not address the core problem. His proposal does not seem to address the core problem either, increased government spending on “taking care of the young or taking care of the old, or repairing a lot that needs to be repaired.”
There’s also the fact that employment isn’t a one-way decision. Last time I tried to get work the managers wouldn’t even interview me. That was for min-wage jobs at McDonald’s & Wal-Mart. I suppose I could get a job as a gay street hustlers, but frankly that’s not the kind of work I’m interested in. I guess I’m just a slackers that way.
I’ll note that this winter is at least as bad as last winter. So if the numbers look good this winter, that’s suggestive that last winter’s numbers weren’t as impacted by the weather as was claimed at the time. (Yes, last winter would now be part of the seasonal adjustment, but would only be a part of that.)