Monday, November 14, 2011

The Economy Doesn't Work Like That

Matthew Yglesias finds it
pretty frustrating to hear DC officials explicitly talking about the idea of making public service provision less efficient as a job-creation scheme.
The idea is that DC might
rely[] on manpower, not mechanization—countering a civilizational trend that's left us with more people than jobs to occupy them. "We are starting to reconsider some of those choices," Tregoning said, and "might choose a path that has a lot more labor."
It's wrong, he argues, for the state to increase job creation by downplaying mechanization because it will offend the neoliberal market state's ideal of efficiency over people. His preferred solution? Supply side economic because, from the first link,
even in models that lead to very strong negative conclusions about supply-side actions in severe recessions, these considerations don’t apply on the municipal level.
He provides no link to an article but does link to Boston considering ending its ban  on happy hours. And concludes that
[t]his is exactly the kind of thing state and local governments should be looking at. If Massachusetts makes it easier to tempt people into the bar with drink specials, that means more work for bartenders and bar-backs, more work for delivery guys, etc. It’s more glamorous for politicians to talk about high-end jobs, but as Tregoning says, you need employment for people with low levels of formal education too. Many commentators seem to me to be irrationally biased against working class service sector occupations relative to working class manufacturing works, but even leaving that aside, there’s just no way a big expensive city like DC or Boston is ever going to play home to giant factories.
So a couple of things, if Boston has happy hours there will be no extra jobs created. How do I know? I''ve worked happy hours and bartenders just work harder for a couple of hours. And, as by the way, it's not the case that those who deliver ardent spirits, wine, and beer would suddenly find that their 40 hr weeks are now 50 or that some much increased demand means that their boss has to hire more workers, it just means that they will drop off an extra keg, case, or whathaveyou on their regular rounds. In short, they will work harder for the same money. Relying on manpower and not mechanization isn't some yearning for decently paid union jobs at the factory but rather that instead of one garbage man driving a mechanized truck for 8 hrs a day three guys, one driving and two hoisting, will work for a semi-decent wage for 8hrs a day five days a week. That means that two guys and/or gals who previously had no or a crappily-paid job will have decently paid job. They can buy things, things they need: food, shelter and clothing, and -- who knows -- maybe go to a bar or restaurant.

The reason supply side economics don't work is because they don't create jobs that pay enough money for the workers to live a decent life. Supply side economics creates a situation within which a decreasing number of people have more money then they need which they then spend on luxury and other nonsenses. Yglesias might find the increased number of bars in which he can imbibe for less an attractive proposition but it is not an economic policy.

Like Douthat, he can't think.

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