Put away näive belief in guaranteed employment

By Maryann O. Keating

In the civics section of the 2014 National Assessment of Educational Progress, eighth-graders were tested on this question: “Which of the following is a belief shared by most people of the United States?”

1. The country should have a single political party.

2. The country should have an official religion.

3. The government should be a democracy.

4. The government should guarantee everybody a job.

Thirty-two percent correctly chose “3” but 51 percent incorrectly choose “4.” There is something poignant about 14-year-olds believing that the role of government is to guarantee everyone a job. The real question is whether or not adults agree.

Actually, many accept the position that the availability of jobs is the ultimate goal or purpose of a nation’s economy. They argue that investors and executives together with workers spur innovation, create wealth, engage in material progress and extend human potential. It is therefore the responsibility of government to provide adequate opportunities for people to have work in order to grow, learn and mature, according to Max Torres in his article “America Needs Work.”

Fortunately, people holding this view do not insist that paid employment is the only path to human fulfillment. However, even when they take it as given that a person should be free to opt in or out of the labor force, they nevertheless insist that a job be provided if a person decides to participate. This raises the important distinction between a guaranteed availability of any job versus a job consistent with an individual’s human potential.

In the 1960s, the U.S. government expanded funding for research. Universities responded by training scores of individuals in pursuit of advanced degrees. When government funding slowed in the 1970s, many highly trained American scientists were unable to find work in their area of expertise. Most of them retrained at personal cost as engineers, technicians, real estate agents, etc. Admittedly, these individuals were skilled and sought work in fairly robust labor markets.

But, surprisingly, there was little discussion of having been misled or denied what was their due. Perhaps their understanding of “striking out” in realizing a personal goal was honed through America’s national pastime, baseball, and its sense of statistical possibilities.

Consider two statistics used to evaluate the health of U.S. labor markets. The unemployment rate is the number of people actively seeking work divided by the total number in the civilian labor force. As of January, this rate was 4.8 percent. It would be unrealistic for this rate to fall much below 4 percent due to seasonal work and the fact that we accept that job seekers, particularly new entrants, take their time in finding an acceptable position.

The labor force participation rate is the percentage of the population, ages 16 and older, who have full- or part-time paid employment or are actively seeking work. In January, the rate was 62.9 per-cent. This is lower than the pre-2008 financial crisis rate of about 66 percent. The decline, partially due to an aging population, is also the result of discouraged job seekers leaving the labor force.

Given that Americans tolerate neither compulsory labor participation nor immediate acceptance of any available job, what is expected from government? Above all, we expect courts to honor labor contracts. Secondly, the government is charged with providing relevant information about labor markets, prevailing wage rates and training opportunities. Finally, we expect government to exercise appropriate policy instruments and limit onerous regulations in order to maintain a functioning flexible labor market.

Politicians talk jobs, jobs, jobs, but sooner or later we realize that here on earth the work of finding work must truly be our own. And there is something liberating about the risks assumed in a dynamic labor market, as compared with a guaranteed job. It requires maturity and society’s acknowledgment that a person’s worth not be reduced to earning a paycheck.

Let’s hope that today’s eighth-graders come to appreciate the liberty needed to seek work on their own terms, and in the process do well for themselves and their families.

Maryann O. Keating, Ph.D., is a resident of South Bend, adjunct scholar of the Indiana Policy Review Foundation and co-author of “Microeconomics for Public Managers.” Please send comments to editorial@therepublic.com.