– September 9, 2019
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At its best, conservatism can ground a society in its fundamentals during periods of rapid, confusing change. At its worst, it can attempt to slow or halt technological and cultural change that is inevitable and stifle prosperity in an ever-changing world. 

We think of conservatism as the domain of the political right, but on the issue of jobs, the left’s views can only be described as the second, counterproductive type of conservatism. 

The information technology revolution of the past two decades has unleashed a process of fundamental change in the market for labor. Rather than helping people thrive in a world in which “one person, one job” makes less and less sense, the left advocates an outdated corporate-paternalistic model where “company men” work in the same factory or office their entire career. This model worked in a bygone era. It no longer does.

Changing Times

This unease about the changing realities of our labor market is exemplified by a recent New York Times piece titled “One Job Is Better Than Two.” It profiles six Americans working multiple low-skilled jobs who support their families but face long hours and often precarious finances. Overall, write authors Binyamin Appelbaum and Damon Winter:

More than eight million people — roughly 5 percent of all workers — held more than one job at a time in July, according to the most recent federal data. The economy has been growing for more than a decade, but their lives offer a reminder that not all Americans are thriving.

Through its photography and language, the Times clearly intends to portray these American workers as victims. Though their circumstances are far from ideal, one must deeply admire the dogged determination with which these workers make ends meet:

Bridget Hughes, 29, works a regular day shift at a Burger King in Kansas City, Mo. Three nights a week, she also works the overnight shift at a nearby McDonald’s. She makes $10 an hour at Burger King and $9.50 an hour at McDonald’s and, together with her husband’s job at a gas station, they manage to feed their three children and to pay the rent.

“When I thought of my future, I thought I was going to be at football games and soccer practices and cheerleading, when in all actuality I’m lucky if I’m home for birthdays,” Ms. Hughes said. “And my children, they think if mommy is at work all the time then we should have the money. But the reality is that I’m at work all the time and I don’t have the money.”

Helping Ms. Hughes and her husband reach a point of self-sufficiency that also allows time for a fulfilling family life is indicative of the challenges we face all over as the post-war manufacturing economy gives way to a service economy based around information technology. But technological and cultural change is happening, and rather than turning back the clock, we must ask how our approach to labor can change with the times.

Clinging to Old Rules

One undoubtedly antiquated rule in our changing labor economy is requirements for overtime pay, generally “time and a half” for anything above 40 hours per week. At a base rate of ten dollars per hour, it would cost Burger King $550 to employ a single worker for 50 hours but $500 is the time is split between two part-time workers.

One can debate these rules philosophically, but they were much more likely to have their intended impact in the manufacturing-driven economy of decades past. Those jobs, if not considered “skilled labor,” often involved a learning curve that made bringing on an extra part-time worker less cost effective than paying an already knowledgeable employee extra for extra hours.

Similarly, the requirement that workers over 30 hours receive full benefits incentivizes low-skilled employers to hire people part-time. Here the problem is not corporate greed but rather the vision of corporate paternalism that dominated in the old manufacturing economy. We cling to an antiquated model of employers providing health insurance that simply doesn’t make sense under new labor-market reality.

Stifling Dynamism

That new reality reflects a certain dynamism, where individuals can more easily connect to employers via information technology and develop their own portfolio of work. But getting from the old “one person, one job” manufacturing-based economy to this new ideal is an inherently tumultuous process.

Many of the workers profiled in the Times piece supplemented their income with work on sharing-economy platforms like Uber and Lyft. These platforms have become lightning rods in the debate over our changing labor market, and once again, the left has led the charge, or rather retreat, to a backward-looking model that no longer makes sense.

Prominent voices on the left flank of the democrating party, including Alexandria Ocasio-Cortez, Elizabeth Warren, and Bernie Sanders, have all taken Uber and others for task for low wages and lack of benefits. Never mind the fact that drivers are allowed to set their own hours, and innovation that would have been impossible in decades past gives entrepreneurial power to individual workers.

This is not to minimize the uphill climb that many face during this time of labor-market transition. But in the end, systemic, top-down approaches that try to make the new employers of today look like the employers of yesterday will stifle the process of adaptation by both workers and firms to technological change that is not going away.

Help that Doesn’t Hurt

The employer model of benefits including healthcare must be the first to go. We need creative solutions such as for-profit or nonprofit cooperatives that allow workers in the sharing economy and others spread across part-time jobs to buy healthcare coverage.

We need new ways to empower individual workers like Ms. Hughes to make more money. The best way to do this is often investments in workers’ human or social capital. This doesn’t mean sending everyone back to college. Often opportunities come from simply connecting people in a neighborhood or community. For hardworking parents of young children, that could take the form of affordable childcare or after-school activities that might give parents a bit more time and foster social networks through which new job opportunities are often discovered.

The stories presented by the Times are both inspiring and challenging. But top-down solutions focusing on turning back the clock will not cut it. Jobs are important to support workers and their families, but they are only sustainable when cooperation between employee and employer creates value for both. Rules that try to recreate a relationship between employee and employer that made sense decades ago, when our economy and technology were vastly different, risk harming not only businesses like Uber and Burger King, but risk leaving their workers further out in the cold.

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Max Gulker

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Max Gulker is an economist and writer who joined AIER in 2015. His research focuses on two main areas: policy and technology. On the policy side, Gulker looks at how issues like poverty and access to education can be addressed with voluntary, decentralized approaches that don’t interfere with free markets. On technology, Gulker is interested in emerging fields like blockchain and cryptocurrencies, competitive issues raised by tech giants such as Facebook and Google, and the sharing economy. Gulker frequently appears at conferences, on podcasts, and on television. Gulker holds a PhD in economics from Stanford University and a BA in economics from the University of Michigan. Prior to AIER, Max spent time in the private sector, consulting with large technology and financial firms on antitrust and other litigation. Follow @maxgAIER.
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