Employment

Here We Go Again

/ The Old Crank

I’ve written before about the inherent problem with instituting an adult education requirement in order to qualify for a government benefit (as have others), but in light of this recent Labour proposal in the U.K., it’s worth repeating the basic problem with this kind of proposal: it’s only fair, and only works as policy, if access to adult education is free and universal. There are other problems, potentially, with adding new requirements to benefits already earned (which is the case with unemployment benefits in the U.S.) but such proposals are fundamentally flawed at the start if a lack of available adult education opportunities make the education requirement impossible for beneficiaries to meet. If Labour is also proposing a massive new investment in adult education and training (and I mean truly massive), that’s one thing, but it’s not clear from this piece in The Telegraph  that such an investment would be accompanying the new education requirement in their proposal:

People receiving Jobseeker’s Allowance would be forced to sit a basic skills test within six weeks of signing on or face being stripped of their benefits, Labour will say, in a move designed to challenge the Tory’s popular welfare policies.

Anyone who does not show basic competency in literacy, numeracy and IT will be sent on training programmes.

Labour believes that around 300,000 people could be sent on courses every year. If they refuse, they will be denied welfare.

Maybe I’m completely uninformed, and the U.K. has 300,000 empty seats in their adult education and training programs. But if not, I’m not sure how this plan is supposed to work.

Note also that expanding a system to accommodate 300,000 more learners is not just a question of pumping more money into programs. To achieve anything close to universal access to adult education, you’d have to think through a strategy that puts in place some combination of physical program and/or on-line learning that is distributed in such a way that it is truly accessible by all, and you’d also have to figure out some way to ensure that individuals could carve out the time and distraction-free space to successfully engage in learning (all of which might require additional investments in broadband access, transportation, and childcare—just to name three examples).

Shifting Corporate Attitudes

/ The Old Crank

One of the problems with the minimum wage debate (whether to raise it, by how much, what will the effects be on hiring, etc.) is that it pushes this much more fundamental issue into the background. I don’t personally understand why it’s not a given that it’s immoral to pay your employees so little that they can’t afford to eat, and why this is not a major topic of public discussion.

But I also think we have to deal with the fact that that’s apparently where we are.

Cappelli’s argument is focused on wages, but it seems to me that the shift he describes is reflected in corporate attitudes towards employee education and training as well. Corporations increasingly don’t see this as their problem. Likewise, Cappelli contends that corporations’ former sense of obligation to pay employees a decent wage had both strategic and altruistic motivations, and I think that was probably true about training as well. But whatever altruistic motivation there was behind some corporate training investments in the old days has all but disappeared. Corporate leadership today more typically looks at training exclusively in terms of return on investment back to the corporation.

You can be morally outraged by all this—or not—but either way, it does have an impact on policy. What is the role of government in an environment where corporations see less of a moral obligation to their employees—not just in terms of wages, but in terms of supporting the education and training needs of our workforce?

Income Inequality and Adult Literacy

/ The Old Crank

I wanted to share a really alarming chart from the OECD’s summary analysis of the initial PIAAC results. (PIAAC, for those jumping into this for the first time, is a new international survey of adult skills, released a few weeks ago.)

Source: Skilled for Life - Key findings from the survey of adult skills (OECD), 2013

Source: Skilled for Life – Key findings from the survey of adult skills (OECD), 2013

Look at where the U.S. is on this chart (bottom left): of the countries surveyed, we have the second highest income inequality, and the highest literacy skills inequality.

The bottom left corner is the absolute worst place to be, and that’s where we are.

But this chart also supports the notion that skills are not the only story when it comes to income inequality: Japan, which also has worse than average skills inequality, (though not as bad as the U.S.), manages to have the lowest income inequality of those countries surveyed. This suggests that other factors are at work in Japan that reduce income inequality. If skills were the only factor, you’d see the countries with the greatest skills inequality all clustered in the bottom left corner.

In addition, several countries, like Germany and Sweden, do a much better job at addressing the skills gap, but still have a higher-than-average income inequality.

The point is, while low skills may be an overall drag on economic growth, there appear to be other other things you can do to steer more income growth towards those at the bottom of the wage scale.

Boxed in on Jobs

/ The Old Crank

This Kathleen Geier post in the Washington Monthly is good, and her argument is pretty compelling. However, regarding the D.C. big box living wage bill, she writes:

[P]oliticians hate the D.C. living wage bill, because they don’t want to drive Walmart away. The politicians want the photo ops at Walmart openings, where they can boast about bringing “good jobs” — um, well, okay, “jobs,” anyway — into the community.

To be fair, it’s not only about the fear of driving Walmart away. As soon as the bill was passed by the Council, other retailers allegedly began re-evaluating their plans to locate in the District. Isn’t it more accurate to say that politicians are afraid of appearing anti-business in general? In my experience that’s an especially sensitive issue for politicians in D.C., a city that faces tough competition for business from neighboring states Virginia and Maryland. Again, the threats from other retailers may turn out to be bogus—and even if they’re not, the long-term net impact on employment/wages might still by a positive one if this bill were to become law—but this notion that D.C. is “anti-business” is something that District politicians legitimately have to grapple with.

None of which is to deny that it’s a big problem when a Walmart ribbon-cutting ceremony serves as a fig leaf for politicians anywhere who are otherwise doing little to nothing to support good jobs, worker training, etc.