The current debate about how to help the poor has focused on the desirability (or not) of increasing the minimum wage to $10.10, up from the current level of $7.25. Research seems to be split about the effect this would have on jobs, although the best research seems to say that it would most likely not reduce low-wage employment or employment growth and would lift a fair number of people out of poverty.
The typical economist response about how to help the poor, which I share for the most part, is to provide a strong economy in which good jobs are available and provide people with the skills needed to work in those jobs (or at least be able to be trained for those jobs). The second part means providing quality public education in which everybody becomes a strong reader and mathematically literate. These days it also probably means making sure everybody is comfortable with computer technology in all of its forms.
But what about the first part? Traditional macroeconomic management with the goal of full employment and moderate inflation is the first step (we obviously haven’t quite figured that out yet), but the second step is to think about what constitutes a good job. I believe that any job can be a good job. That is, people can enjoy, be productive in, and provide for themselves and their families, whether they are working as a farmer, an assembly line worker, a teacher, a doctor, a janitor, or even in retail service. That said, each and every one of those jobs can be bad jobs as well. So what makes a job good instead of bad? I think there are four main factors:
- Pay. Let’s face it, pay is one way we measure our productivity. Not only can are we more financially secure the more money we make, but we also feel more valuable, both to our families and to society. There’s a big difference between working full time and making $15,000 (about the current minimum wage) and making $25,000.
- Security. Economic activity is fairly volatile, and feeling that you may not have your job next week can make people feel just as unhappy and insecure as worrying about whether or not it will rain enough to grow the crops you need to feel yourself and your family. That said, I believe most workers understand that they will likely change jobs a number of times throughout their working lives. The question, then, is how easy or difficult this process becomes.
- Control. Being a professor comes with one of the highest levels of job satisfaction. A (small) part of it may be pay. A significant part of it is likely the security of tenure (I wouldn’t know), but a large part of job satisfaction for academics also comes from control. Professors are generally free to design the courses they teach, choose the method of instruction, and choose the topics of research that interest them. This allows for much more control than most workers have.
- Value. Pay is one way to measure the value of what you do, but it is by no means the only way. People choose many jobs, teaching, police officers and fire fighters, social workers, etc. not because they get paid a lot, but because they feel they are doing something valuable. The more a worker feels that she is doing something worthwhile, the happier that worker will be.
Let’s think about what I didn’t include. While safety is important, I don’t believe it’s absolutely necessary for a job to be considered a good job. I don’t believe there is a particular type of work that is better than any other. When workers left the farms to join the factories, these were considered harsh, unnatural jobs. Now factory jobs in manufacturing are often considered one of the best blue collar jobs around. It is low wage service jobs that now come under fire, whether it is housekeeping in a hotel, working at a fast food restaurant, or selling clothes at the Gap.
While there will always be some jobs that will be more desirable than others, do to extremes along one of the four dimensions noted above, history suggests that it is possible to improve most, if not all jobs, along these dimensions.
Recently, I’ve been focused on bargaining power and the ability of firms (or workers) to move economic profits in their direction. A large employer, especially of less-skilled labor, is generally in a stronger bargaining position than its workers. This can lead the executives and managers in charge of firms, in an effort to reduce labor costs and increase productivity, to reduce pay, reduce job security, and weaken worker control. In the 1950s and 1960s in this country, and in many western European countries presently, unions have been able to exert a counterweight in order to fight back against this reduction in job quality. In the U.S., other methods such as employee ownership and open-book management techniques have also increased job quality by increasing potential pay, increasing workers’ control over their work environment, providing more job and financial security, and educating workers on the value of what they are doing. Other companies, such as Costco, focus more on pay and security, and have been quite successful.
Imagine the worst job you can. For me, it would be a minimum wage job in retail. Now imagine that the worker is empowered to make suggestions about how the work can be done, that the worker understands how his effort contributes to the companies bottom line, and that the worker stands to benefit when that bottom line improves. The actual work may be the same and may not be too enjoyable, but from the perspective of the worker, much has changed. Now when they come to work they are playing the game of business and have a stake in the outcome if they are able to win. And to me, that has to be a better job.