I used to disagree with Paul Krugman fairly frequently in this blog, back when he was writing about health economics. More recently I stopped doing so, even if I didn't buy into everything that he argued. Since much of it was taking an economics perspective on our national politics, I didn't see a good reason to air my occasional misgivings. But I will do so about this column from yesterday, No, ‘Socialism’ Isn’t Making Americans Lazy. My thought here is that the questions I offer up might be instructive to consider in their own right, to push the argument further along.
Krugman uses employment data to make his case, which would be convincing if having a job (and keeping it) meant the person was not lazy. A potential alternative would be that some jobs enable the people who fill them to shirk to some extent, yet that behavior becomes the norm so such people won't be fired as long as they conform to this norm. The first question, then, is this: do such jobs exist, and do they constitute a significant fraction of all the jobs in the labor market? I do want to note that one can go to the other extreme and observe that there are certain jobs where the people who fill them put in 60 hour weeks or more and with no increased compensation because such people are salaried and then put in the time based on what the job requires. So we might be willing to agree that employment or not is a binary variable, but effort while working is closer to a continuous variable and laziness may refer to the effort level rather than that the person has a job.
The second question is this: what sort of jobs enable shirking as an equilibrium outcome? Now I will shift gears and give two examples from my personal experience. How much this generalizes is anyone's guess. A parallel question to what is being asked here is in the teaching and learning arena. Can students shirk somewhat and yet expect to get reasonable grades in the courses they take. My prior post suggests just that. And the teachers shirk too, by enabling this sort of student behavior. George Kuh referred to this sort of behavior as the Disengagement Compact. (See page 6, first column, of his article about the National Survey of Student Engagement.) Then, I get a huge number of solicitations from vendors who think I'm still working for the University of Illinois as an academic technologist, even though I retired back in 2010. I've complained about this to friends who still work in this area at various universities around the country. Their response is that these sales people are lazy - they don't do their homework. It's easier for them to simply blast an email to whomever is on their list without updating that list to ensure it is current and without making the message highly personalized so it appears to the recipient that the person is really trying to communicate.
How much work is of this sort, I really don't know. But consider this. Another column from yesterday, this one by Peter Coy, is about doing away with the 'Representative Agent Model', which invariably produced results consistent with Chicago School thinking, and instead replacing it with the Heterogeneous Agent New Keynesian (HANK) model, which needs computers to produce the outcomes but then the results obtained are far more realistic. Reasoning by analogy, we need a Heterogeneous Jobs model, which would admit that some jobs do enable shirking in equilibrium, while others do not.
But there is still a different way to think about things, which has to do with preparation for entering the labor market. Way back when in Development Economics, there was the Harris-Todaro model to explain from rural to urban migration based on income differentials in the two locales. Again reasoning by analogy, if there are certain jobs that differ substantially in the wages they offer, with much of the differential explained by the human capital requirements of the higher paying jobs, then there is a puzzle. Why do those who are stuck in the low paying jobs not try to acquire the human capital and thereby raise their income. Does laziness explain that? A certain fatalism or lack of wherewithal? Or something else? And when it happens across generations, particularly in males who seem to feel emasculated, what can overturn this sort of lock-in?
The decline in manufacturing and the rise of the service sector were phenomena of the 1990s. The movement to online work in a big way is a product of the last decade. The nature of work is not static. Krugman assumes a job is a job is a job. That just ain't so. He should be held to a higher standard in making the sort of argument that he made.
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