Unnecessary Fear Of Makework

This is good Yglesias. Here's the thing. If more people are working, there's a smaller supply of laborers, so their price goes up. If wages go up, inflation goes up. And rich people hate inflation. So, rich people want a large supply of unemployed people because it keeps wages and prices low.--SS

Unnecessary Fear Of Makework:

Two brief remarks on David Wessel’s piece on technology and the medium-term economic outlook:

So they changed their focus. Their argument: The pace of technology innovation hasn’t slowed. It has quickened. “The pace has sped up so much that it’s left a lot of people behind. Many workers, in short, are losing the race against the machine,” they write in “Race Against The Machine.”

That sounds like the 1952 Kurt Vonnegut novel, “Player Piano,” in which machines do the work and the government’s Reconstruction and Reclamation Corps—”Reeks and Wrecks”—provides make-work for the dispossessed.

One thing to say about this is that public sector make-work employment is hardly a science fiction scenario. One of the clearest examples I’ve seen recently was the absurd number of security personnel at the Providenciales Airport in Turks & Caicos. The local tourist economy generates a volume of income flows that’s out of proportion to its impact on the labor market, and the government is dealing with this in part by taxing the flows and using funds to support an unnecessarily large number of airport staff.

The other thing to say about it is that in general, the fear that make-work employment will be the only option available to the state seems to me to be wildly overblown. If you go to Paris or New York or Shanghai or Los Angeles almost any other city I’ve been to (Geneva and Helsinki are the exceptions that come to mind), public spaces are maintained at a much lower standard of cleanliness than are private spaces. In other words, people are averse to paying the level of taxation that would be required to keep things as clean as they pay to maintain homes, offices, and shopping centers. Which is fine. But it suggests that in all of these societies, hiring more people to keep public spaces spic and span wouldn’t be “make work” at all. It would just be work. If you show me a country where there are no potholes and no dirty streets, no transportation or water infrastructure needs, no high-crime neighborhoods, and universal preschool, then you’re showing me a country that might face a “make-work or full employment” choice. But that’s not America. There’s plenty of perfectly useful public sector work for people to do. If you think those undertakings would be “wasteful” (which many people do), then what you’re saying is precisely that there are useful things for them to be doing in the private sector and their time would be “wasted” on these public undertakings. If there isn’t anything useful for them to be doing in the private sector, then there’s no waste involved in allocating them to the public sector.