Why It's Harder for White-Collar Workers To Find Jobs
Bait and Switch
Why It's Harder for White-Collar Workers To Find Jobs
New books dissected over email.
Sept. 7 2005 6:37 AM

Bait and Switch


Dear Alan,

We still need a good book on why white-collar workers are having a harder time finding jobs.


Two major forces are reshaping U.S. labor markets. First, many U.S. corporations have lost their privileged oligopolistic positions. Gone are the days when General Motors and IBM ruled home and global markets as a matter of course. International competition puts more pressure on managers to fire mediocre workers or eliminate superfluous positions.

This development has been driven by economic growth around the world, most of all in East Asia. So yes, although I feel for displaced American workers, economic justice is being more widely spread, not eroded. The world's poor have been climbing into prosperity. I would like to see Ehrenreich—and the American left more generally—drop all vestiges of economic nationalism and endorse free trade with enthusiasm.

Second, information technologies make it easier to measure who is producing economic value. Investors are keener to focus on the profit centers, and this may mean cutting out layers of midlevel managers. But again, viewed as a whole, information technology is a positive development, even though some workers never reattain their old level of wages. Ehrenreich prefers to rail against unjust outcomes, but she does not offer a useful policy suggestion.

Alan, what do you think is left for disagreement between us? Yes, we should have a safety net, but many ask for government subsidies to retrain workers and ease their re-entry into the job market. I worry that such programs will be mired in bureaucracy and political favoritism. If workers are paid to stay outside the work force and undergo more training, the programs can hinder rather than ease adjustment. Indeed, the record of government-sponsored worker training is far from stellar. Even the left-wing Gordon Lafer wrote a book called The Job Training Charade, in which he argued that most of the training did not increase employability. Ehrenreich's own evidence of irrational job-seekers, if for the time being we accept it, suggests that this conclusion is plausible. If unemployed workers are wasting their time in miserable and expensive "self-help" programs, as Ehrenreich reports, we cannot expect these same individuals to use government retraining programs to great positive effect.

Most important, displaced white-collar workers do not lead my list of victims deserving compensation. It is unfair that a 56-year-old is now expected to compete in a world for which he was never prepared. But we ought to be realistic. These transitional costs are borne by a class that has been about the richest and freest human history has seen. Let us say that you, Alan, could design a public policy to ease their readjustment. I probably would zero out that budget line and spend those funds in Niger, or on boosting the Earned Income Tax Credit, or paying for future Medicare benefits, or, dare I say it, lowering the corporate income tax as a means of encouraging white-collar re-employment.

You ask what the market might find of value in Bait and Switch. Contrary to the author's intentions, it strikes me that, as she portrays them, the white-collar victims may reap more contempt than sympathy. Many will ask, as did I: "Why don't these people have any idea how to look for a job?" White-collar readers with jobs will feel superior to both Ehrenreich and the characters in the book. Rather than making readers question capitalism, the book may make readers more complacent about capitalist labor-market outcomes. That's exactly what Ehrenreich set out to combat.

Alan, we seem to agree on Bait and Switch, but I suspect we will part company on some of the underlying issues. Am I wrong?


Tyler Cowen is professor of economics at George Mason University and general director of the Mercatus Center and blogs at www.marginalrevolution.com. Alan Wolfe is professor of political science and director of the Boisi Center for Religion and American Public Life at Boston College. He is writing a book on whether American democracy still works.

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