Surprise, Robert Reich Comes Close To A Decent Economic Idea

from forbes

 4/22/2015 @ 5:20AM

Tim Worstall Contributor

This isn’t what we’ve come to expect from that professor of public policy over at Berkeley that is Robert Reich, a good economic idea, but everyone can surprise us occasionally. Here he’s complaining about the increasing casualisation of labour in the economy. What we call, in my native Britain, zero hours contracts and what y’all might call unscheduled shift work. The rise of predictive software (when are the peaks and troughs of demand going to be?) and of scheduling software means that increasingly people are being offered working contracts which aren’t all that good. You don’t know whether there’s going to be any work at all from day to day, can have work that was going to be yours denied mere minutes before you turn up to do it and so on.

This is indeed something of a problem. My own opinion is that it’s not just that new technology that’s enabling it though. Rather, the recession has contributed to it: there’s more people more desperate for work than usual so the terms and conditions upon which work is offered have declined. Some part of this will disappear as the labour market tightens in the coming years. Simply because employers will need to offer better terms as the unemployment rate continues to fall (and thus Walmart, McDonald's MCD +3.13% and so on raising wages recently. The closer we get to full employment the better both wages and contract terms will get. Full employment really is the best plan for improving both).

However, let’s take seriously the idea that technological change is responsible for some part of this increased casualisation. We don’t want to insist that everyone only ever offer a “real job”. For two reasons: the first being that some are just fine being treated as casual labour (like all of us who work as freelance journalists for example). The second is that such casualisation does increase the general efficiency of the economy: even if it doesn’t improve the workers lives. So, we don’t particularly want to do what this Slate piece implies weshould:

In a way, what this comes down to is how we define a job—and that’s something no one has a particularly good answer to. “It’s a really tough question, in part because what we mean by a job has changed in the past 30 years,” says Brishen Rogers, a professor at Temple University’s Beasley School of Law and the author of a recent paper on the social costs of Uber. “It used to be a job was 40 hours a week at a factory. Now a lot of standard employment is part-time and an awful lot of work is actually contingent, meaning workers don’t have steady employment day to day.”

The implication being that we shouldn’t regard such as real jobs and perhaps should insist that employers only offer “real jobs”.

Reich however manages to come close to a decent economic idea having performed much the same basic analysis:

Alternatively, if American workers can’t get more regular and predictable hours, they at least need stronger safety nets.

These would include high-quality pre-school and after-school programs; unemployment insurance for people who can only get part-time work; and a minimum guaranteed basic income.

Pre-and post-school is just blather in this context, as is UI really. And the minimum guaranteed income, while being a Milton Friedman idea and thus a good one, also isn’t quite what we want. What we go want is a universal basic income. The difference between minimum and universal is that in the latter we just cut a check to every single adult American every month. Charles Murray explored this in detail in his book “In Our Hands”. The numbers are a few years old now but the basic idea is simply to send every adult perhaps $900 a month. and abolish absolutely every other part of the welfare state, Section 8, EITC, welfare itself, SNAP, Medicaid, the lot, even Social Security. Sure, it’s not going to happen politically but it solves two economic problems for us. The first is it gives everyone that basic income. Sure, it doesn’t look like much but anyone getting that much is firmly inside the top 20% of all income earners in the world. Secondly, it means that we no longer worry about that casualisation of jobs. We can accept the increased efficiency or the arrangement without leaving people in the lurch over their not having any income if times are slow.

Seems like a plan to me even though I know very well it’s never actually going to become public policy.

My latest book is “23 Things We Are Telling You About Capitalism” AtAmazon or Amazon UK. A critical (highly critical) re-appraisal of Ha Joon Chang’s “23 Things They Don’t Tell You About Capitalism”.