Why So Many Jobs Are Crappy

I’ve been thinking about it. Work, being a core part of life, is meant to be interesting, engaging, and meaningful. Otherwise, why are we wasting our time on this planet? Yet, for many, work is not living up to its name. Work of the good kind is less and less on offer in the jobs being created. I’ve been reflecting on possible reasons why, and decided it’s really simple. The problem is not the jobs. It’s us. Most humans are simply not the kind of people a boss would want to hire.

Take yourselves as a case in point. I’m guessing you’re the kind of people who’d prefer to feel needed rather than expendable. Well, that kind of attitude won’t do. Bosses want to keep your wages down, and that would be harder to do if you were given opportunities to make yourselves invaluable and near on irreplaceable. Bosses need to keep their options open in case some of you get ideas about better pay and conditions, or just generally become ‘difficult’ or, dare I say, ‘bolshie’.

You know it’s true. A boss needs to be able to dump you at the drop of a hat. Maybe it’s to boost profits. Maybe it’s to cut costs. Or maybe it’s just because it feels good.

And a boss needs to be able to dump you without it having detrimental effects. There must be ready replacements, eager to crank it up, the moment you’re out the door. And if morale suffers, because the buddies you left behind miss you, the boss will want to send them packing too, and bring in a fresh batch of wage-slaves.

Quite simply, there is little place for satisfying roles, the kind where you get to learn more and more interesting stuff over time. The only good on-the-job learning is no learning at all. Or, if you must learn, thirty minutes tops to master a dead-end role.

Although the point seems obvious, I don’t believe it has been treated with the kind of gravity that only the economics blogosphere is fully equipped to deliver. It’s high time the situation was spelled out in painstaking – okay, not painstaking – analytical terms. Then we can all lower our expectations and knuckle down to a lifetime of short-lived McJobs and frequent sackings. If we’re lucky.

One way to characterize a job is by the learning that occurs in it. This can be described by a learning curve:

Single LC

 
In the diagram, u(t) stands for the unit labor cost that a worker – let’s say you – achieves at a given point in time, after you have built up an amount, t, of experience. It is how much you cost the employer per unit of output produced, at a given moment in time. We can call this the ‘instantaneous unit labor cost’, or sometimes just ‘efficiency’ for short. If learning occurs on the job, you get more and more efficient, and your unit labor cost falls over time. The curve is drawn assuming a particular wage level. If the wage increases, the curve will shift up.

On first being hired, you were green, and cost the bosses m + c per unit of output. Eventually, through learning on the job, you will get this down almost to m, which is your ‘potential efficiency’, given current pay and conditions. Some jobs will allow more learning than others, which will be reflected in the amount c, which is the ‘scope for learning’.

Here is one possible algebraic representation of the learning curve:

LC Eqn1

 
 
 
 
 
 
The second term is the one that captures the learning process. When you just start the job, t = 0, and the second term equals c. Just as shown in the diagram, you cost the bosses m + c per unit of output. The longer you stay in the job, the larger t gets, and the closer the second term gets to zero, which it approaches asymptotically. Your unit labor cost converges on m, as indicated in the diagram.

The rate at which you reduce your unit labor cost from m + c down to m depends on how fast learning can take place on the job. The ‘rate of learning’ is represented by λ. When &#955 is large, the learning curve will be very steep initially, and almost all the learning will occur just after being hired. When &#955 takes intermediate values, the learning process is steadier and longer lasting, reflected in a more gradual curvature in u(t).

McJobs are those where learning is either nonexistent or extremely rapid but short-lived. If there is no learning, c = &#955 = 0 and the learning curve would just be a horizontal straight line showing a constant unit labor cost of m. Rapid but short-lived learning would mean the learning curve slopes down almost vertically until m is nearly reached, then stays almost flat after that. It would probably take most of us a half shift to master flipping burgers, but after that we’d have it down pat. Bosses love McJobs. They make us readily replaceable.

Satisfying jobs – let’s call them ‘good jobs’ – will generally be ones where learning occurs at a steady pace more or less indefinitely, probably as part of a defined career path. Bosses would prefer not to offer these, and will always be looking for ways to deskill roles that, for now at least, need to allow workers greater autonomy, ingenuity, and scope for on-the-job learning.

Once you gain experience in a good job, you will soon become much more efficient in the role than an inexperienced replacement would be. This might remain true even if you happen to win a pay rise, work less hours, or start operating at a more leisurely – let’s say human – pace. Any of these things would shift your learning curve up, because you would now have a higher unit labor cost at any given level of experience. Even so, you might still be more efficient than a prospective replacement.

In fact, let’s say you do win a pay rise, plus a longer lunch break. Thanks to your experience on the job, you have realized that you can afford to be more bolshie. The boss knows that you can’t be replaced without some cost, at least in the short term.

Your new situation is illustrated below. You have switched from your original learning curve, now called u2, to a higher learning curve, u1, after an amount τ of experience.

Incidentally, that greek letter tau is meant to look the same as the greek letter tau in the diagram. I have no idea why it doesn’t match. Probably some bolshie worker at Microsoft is the culprit. Typical.

Anyway, you are sitting at point A and the boss is not happy, since before your improvements in pay and conditions, you were on a point almost directly below it on curve u2. Extensions to the boss’s country house are in jeopardy thanks to your militant demands for higher pay and a full half-hour for lunch.

Learning Curves B

 
As it happens, your immediate boss is sufficiently annoyed to call in his bosses. They’re having a liquid lunch for the express purpose of dealing with the situation you’ve placed them in. They need to decide whether to kick your sorry butt out of the joint and find a replacement, somebody who will accept a lower wage and be subservient, like you used to be before you went all bolshie. The bosses want someone who is willing to be positioned on learning curve u2. Unfortunately, such a worker would have no experience, so would be back at point E at time zero.

Algebraically, the two curves look like this:

LC Eqn2

 
 
 
 
 
 
 
The diagram shows that m2 < m1. This means that a replacement worker’s potential efficiency would be superior to yours. It’s also possible that a replacement worker would learn a bit faster, now that you are insisting on operating at less than sweatshop pace. This is reflected in the equation for u2, where the rate of learning is vλ rather than λ, and v is assumed to be greater than 1.

Right at this moment, with the bosses plotting your downfall, you happen to have a lower instantaneous unit labor cost (at point A) than a replacement would have on first starting the job (at point E). But the bosses wonder whether, given enough time, a replacement would save the firm money and get the country house extensions back on track.

How patient are the bosses? In the diagram, they have a ‘time horizon’ of h. If a replacement would cost less over time period h than you would, the bosses will gleefully liberate themselves from your services. Given that amount of time, the replacement’s experience on the job would increase from 0 to h. You’ve had a ‘head start’ of τ, so you would be able to build up your experience from τ to τ + h.

The bosses can see that the replacement would get down to point F after time h on the job, which represents a lower unit labor cost than you would offer them at point B. However, for much of the period, you would outperform the replacement. What matters to the bosses is the total accumulated costs over the entire period. In the diagram, if area ABCD is larger than area EFGH, you will be on your bike. Otherwise, you’ll be safe, even though the bosses are itching to see the back of you.

It is self-evident that you are more likely to be fired the bigger the gaps in potential efficiency and scope for learning (the m’s and c’s), the larger the difference in learning rates (determined by v), and the longer the time horizon, h. On the other hand, the more experience, τ, you already have under your belt, the harder it will be for the bosses to get rid of you.

More interesting, though, is the influence of learning speed on the decision of the bosses. As indicated at the outset, bosses don’t like jobs that provide an opportunity for indefinite learning at an intermediate rate.

We can see this by looking more closely at the areas ABCD and EFGH. Call the first area C1. It represents your accumulated unit labor costs from time τ to τ + h. Similarly, the second area can be called C2, and refers to the corresponding measure for a replacement worker employed from time zero to h.

Algebraically,

LC Eqn3

 
 
 
 
 
 
 
 
 
 
 
Let’s define the ‘firing payoff’, Z, as:

LC Eqn4

 
 
 
 
This measures the cost savings the bosses stand to reap if you are fired and replaced by somebody else. If Z > 0, the firing payoff is positive and the bosses will replace you. Otherwise, you win out, even though you’ve become intolerably bolshie!

The behavior of the firing payoff, Z, as the rate of learning, λ, is varied is always the same. For very low and high rates of learning, it is more likely that firing will pay off for the bosses. But for intermediate rates of learning, there is a greater chance that you will survive. What qualifies as ‘intermediate’ values for the rate of learning varies with the choices for other parameters, but the pattern is always the same.

The following graph shows the firing payoff as a function of the rate of learning when it is assumed that m1 = 100, m2 = 75, c1 = 200, c2 = 150, τ = h = 1, and v = 4/3.

Expendability3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For λ < 0.6779, Z > 0, and you are fired. For λ > 4.3889, again Z > 0, and you are hanging out in soup kitchens. But there is a sweet spot. You get to stay in the job with your better pay and conditions in between those two cutoff points.

Fortunately, the bosses weren’t the only ones able to zero in on the behavior of the firing payoff. Unbeknownst to them, you had already made the appropriate calculations before formulating your most recent demands for a pay rise and longer lunch break. You had the bosses right where you wanted them. They were screwed from the outset, and didn’t even realize it. No wonder they would prefer to eradicate all the good jobs and leave us all fighting for scraps in McDonalds.

 
Extensions

I tried to keep the model as simple as possible without losing the key relationship between the firing payoff and the rate of learning. Various extensions are possible, but they only make the situation worse for the bosses when it comes to good jobs.

One obvious extension, though not very interesting, is simply to introduce a discount rate. If the bosses value cost reductions in the present more highly than cost reductions in the future, it is appropriate to include a positive discount rate. This doesn’t alter anything much other than to make being bolshie even more likely to pay off.

Another extension is to take into account that the traits of the replacement worker are not completely known. The bosses will worry that a replacement will become bolshie, just like you did, before your removal has a chance to pay dividends. As with a positive discount rate, incomplete information concerning the traits of a replacement worker stack the odds more in favor of the incumbent.

The incompleteness of information adds an additional wrinkle, which is that now even large gaps between potential efficiencies will not necessarily hurt you as the incumbent. The reason is that there will now be a chance that the replacement will simply approach the same unit labor cost as you. Basically, for a big gap in potential efficiencies to matter, the probability of the replacement becoming bolshie can’t be too high.

So, next time we hear people complaining about the crappiness of their jobs, we can sooth them with the knowledge that it is better for the bosses that we all remain unchallenged and expendable.

 
Background Reading

The idea for this post comes, in a roundabout way, from a 1981 paper by A. M. Spence entitled, ‘The learning curve and competition’, which was published in the Bell Journal of Economics. In the paper, Spence argues that early entrants into an industry will be more likely ultimately to dominate the market when production is subject to a learning curve.

The idea is also linked, again in a roundabout way, to a 1994 paper by Flora Gill entitled, ‘Inequality and the Wheel of Fortune: Systemic Causes of Economic Deprivation’, and published in Australian Economic Papers.

A different application of the argument presented here would be to consider the circumstances under which instances of bad luck in competition for employment could have long-lasting effects on the earnings of individual workers. Workers who luckily gain appointment into good jobs, perhaps initially contrary to merit, will get the opportunity to learn on the job and lock in their advantage, whereas unlucky workers consigned to bad jobs, again perhaps contrary to merit, might have a tough time reversing their fortunes.

I like the present application, though, in which capitalist deskilling emerges partly as a response to the effects on worker discipline that are potentially created by on-the-job learning.

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53 thoughts on “Why So Many Jobs Are Crappy

  1. Interesting post.

    I have previously thought of a less fleshed out but analogous argument: capitalism will naturally tends to lower wages because, by definition, those firms who do not cut wages will go bankrupt. So over time, and within limits, capitalism will weed out firms who pay their employees ‘too much.’

    Crappy jobs at low pay: basic economics! :)

  2. @ Unlearning

    This is actually what many retailers are saying about Wal-Mart. They would prefer to pay better wages but cannot afford to do so and compete with their major competitor’s business model.

    Sam Walton: “I pay low wages. I can take advantage of that. We’re going to be successful, but the basis is a very low-wage, low-benefit model of employment.”
    —Attributed in Adam L. Penenberg, “Why Google Is Like Wal-Mart”, Wired, 21 April 2005
    http://en.wikiquote.org/wiki/Sam_Walton

    And with neoliberal regimes passing business-friendly legislation and labor being fungible globally now, labor has lost its collective bargaining power. Automation and now robotics is taking its toll, too. What we constantly hear from TPTB is “the need to increase competitiveness,” which is code for lowering employee compensation to gain a leg up in the export market, which along with lowering taxes on business and increasing them on labor is the neoliberal “solution” to everything that ails an economy.

  3. Hi Unlearning. Thanks for stopping by!

    “Crappy jobs at low pay: basic economics!”

    This is why it needs to be unlearned. :)

    At least in the case of on-the-job learning, the bosses need to find a way to deskill the role before they can make the job completely crappy. Fortunately, this takes time in some areas.

  4. At least in the case of on-the-job learning, the bosses need to find a way to deskill the role before they can make the job completely crappy. Fortunately, this takes time in some areas.

    And that prepares the way for automation and robotics to take over merely repetitive jobs, even high level work like accounting and medical diagnosis.

    As it should be. Why waste human creativity on work that can be done by machines. We just need to reconfigure our morality about work and figure out a new system of distribution that fits the situation owing to innovation and the productivity increase it brings. Transferring the bulk of the gain from increased productivity to the top of the town doesn’t make any sense morally or sociologically, and economic theory has to be bent in order to justify it on economic grounds.

  5. Yep. Agree wholeheartedly. Fulfilling work is not compatible (in the long run) with capitalist employment relations, but it would be perfectly compatible with an institutional framework in which income and work were to a large degree separated.

  6. Bottom line is that a capitalistic system is profit-driven. That worked in the transition from the agricultural to the industrial era. We have entered the digital era and more suitable socio-economic system needs to be evolved. I suggest taking Adolph Lowe’s engineering approach to economics, where he recommends designing the system that is appropriate to the task on the principle, form follows function. The system that is required is fundamentally sociological rather than economic in that human life is more that material and an economy is the material life-support system of a society. Economics is a means rather than an end. Capitalism treats economics as an end, which is what is wrong with capitalism. Moreover, capitalism presupposes that there is a “natural” economics similar to physics wrt to inorganic systems. However, biological systems are different from physical system in that they are non-ergodic, and social systems are complex adaptive systems rather than mechanical systems. In addition, technological innovation has advanced far beyond the point at which capitalism was developed and mainstream economics is based on those condition, which are no longer applicable. The result is that our systems are solving either non-existent problems or the wrong problems. We need new thinking and complete overhaul. The present course is leading toward human extinction or at least severe culling.

  7. Hey Peter,

    So, the idea of the paper appears to be to model the situation created by a single experienced worker asking her boss for higher-wages (m would be the wages; m+c, what the worker actually produces for her boss, and u(t) – m would be wastage caused by lack of experience).

    Games, however, usually come in a utility maximization framework, where probabilities also play a role. This, in my opinion, is what usually makes this kind of exercise futile.

    But in this example, the framework is not here, and one can reach useful conclusions **without** it… Wouldn’t that mean that games, if treated adequately, could actually be useful?

    By the way: I used the example to practice what little skills I have been able to gain thanks to The Big Challenge!

    ———

    Hi, Unlearning!

  8. Pretty close, Magpie. The unit labor cost is the same as usual, except applied to an individual worker and individual firm rather than the entire economy.

    Unit labor cost = W / (PQ)

    where W is the total wages (and other pecuniary benefits) paid to the individual worker, P is price, Q the total output produced by the firm, and PQ the firm’s nominal output.

    So it is the wage (and other pecuniary benefits) paid to the individual worker per unit of nominal output produced by the firm. Note that non-pecuniary benefits will be reflected in the firm’s output. For example, a longer lunch break and slower work rate will lower the firm’s output relative to the wage of the individual worker, translating into a higher unit labor cost.

    Alternatively, the unit labor cost can be expressed in real terms as w/APL, where w is the real wage rate and APL the average productivity of labor.

    I used unit labor cost to avoid specifying a particular rule for the determination of the wage, because unlike in neoclassical economics where w = VMP (value of marginal product), in heterodox approaches the wage is seen as not directly reflecting productive contribution but having a social determination. In other words, focusing on unit labor cost leaves the model intentionally open on the question of wage determination, so that it could be considered irrespective of the assumptions about wages.

    So, initially, the worker costs m + c per unit of the firm’s output. Potentially, with learning, the worker can get this down to m. (Pay rises or longer lunches will shift up the learning curve and increase both m + c and m.) As you note, c is the scope for learning, which will be traversed faster when λ is larger.

    Yes, games and models are frequently expressed in terms of utility maximization, but they don’t have to be, and this one obviously wasn’t. I wouldn’t claim too much for the usefulness of the model, but it probably touches on one factor behind deskilling, and illustrates one logical argument along those lines.

    The annihilation of the craft workers in early capitalism once their roles could be replicated in a deskilled fashion under larger industry might be one example of this process.

    Attempts by workers in the present to horde knowledge tied up in their roles can be seen as a response to the precariousness that comes from being relegated to expendable workers. Obviously openness with information and cooperation rather than competition between workers is a more productive approach, but if the benefits of such openness and cooperation are simply going to be captured by capitalists at the expense of workers, there is something wrong with the system and the incentive structure.

    None of this is to suggest that roles will never be created until workers can be completely expendable. If a branch of production is profitable, and is not yet producible on the basis of McJobs, capitalist firms have to satisfy themselves, for now, with allowing workers greater leeway and scope for learning. But they have an interest in changing that in time.

  9. I think everybody looks to the outside without taking into account what is happening on the inside.

    If a doctor forgets for one moment they are dealing with a human being, then the diagnosis may as well be done by a robot (as far as mechanics are concerned). Most doctors know their patient’s problems extend to the human level because they are dealing with living feeling human beings. Economists apparently have no idea?

    Also, if you use the problem creator (mind) to ‘solve problems’ – then look out!

    Basically, I just don’t see ‘political problems’ or ‘economic problems’ or ‘social problems’ etc. (even though they exist as layers): I just see, whenever I decide to punish myself and take a look – human beings trying to deal with miasma, farce fiasco and greed; on top of everything else! We might take five minutes off to listen to a music track, and then it is back to the problems as though they were deity. I see we create our own stupidity and complexity, almost unconsciously layer on layer – (I wonder if this is what it means to be crown of creation?). Basically, I reckon we all just need to down tools for five minutes and take one long honest look in the mirror. Common sense being the sense that is supposed to be common to everybody.

    Like hey, we could enjoy being alive!! We could enjoy living on this beautiful planet, absolutely unique as far as the radio telescopes can see (light years)!! We could even learn to get along with one another, if only we knew how (the answer to that is being unconditionally happy within inside of yourself) ….

    What we actually need are better (more conscious) human beings. The planet was evolving quite nicely up to the point where blind and selfish human intervention began to impact.

    What concerns me is that discussions about mechanics and problems, end up as distractions. The pivotal point seems to me to be not the mathematics etc., but that aspect of the human persona we call the ‘I’ – the sense of a self.

    To be clear and pointed about this sense of self: when the tsunami comes and a building collapses on you or you are out in the middle of the Atlantic ocean surrounded by circling sharks – the cry is ‘save me, save me’. Not save Mr(s). so and so B, PHD, GBE and all-round jolly nice neighbour. It is save ME! (ME)! Especially if it you that is in danger and everybody else is OK. We are very very clear about that! The sense of self knows itself apart from all of the layers. It is the layers that hypnotise you into thinking you are a chook!

    Here, in all of its obviousness and simplicity, is THE great battleground. And it is not because of the sense of self that we have problems; it is because of all of the layers.

    In essence the ME is an observer and rather incredulous witness. We cannot believe sometimes, how dumb our behaviour can get; how we screw things us so royally. So one of the most simplest of techniques everybody should know, is to make sure they do not confuse the ME with what they do, or the layers (personas) they assume. If we want to maintain our integrity and humanity that is. In most people the ME is actually human: kind, considerate, thoughtful. But it is not passive. Most people it seems are hypnotised by the layers. On the other hand, they have little knowledge and experience of the ME – what it actually is; in this universe, in this nature, in this reality. They pass from this world and never find out.

    So, from one angle, looking at the world and everything that goes on in it both good and bad: – there is a ‘self’ wanting something, believing in something, trying to achieve something, struggling for something – beyond simple subsistence: and in the intensity of the struggle bothering just about everything and everybody else. The planet is struggling to keep everything clean and functional. Amongst humans, frictions build up and erupt, or ideology runs rampant.

    Everybody has a viewpoint on what ‘something’ means for them in their lives and the libraries are full of grandiose societal schemes in the belief that the solution is in an aerial spray. Selves with similar views and motivations gang up on others to get what they want or think should happen. This is economics, politics, religion, education and society – from another angle it is stupidity in aggregate and amplified. On a planet of 6.8 billion people all wanting something, that’s a lot of manipulation going on – the really funny bit is that not one of us like being controlled or manipulated, and all love the word ‘freedom’ in their own tongue. The other silly bit is because the skin pigmentation varies from black through red brown yellow white and perhaps things like skeletal structure and cultures vary, many selves think that they are somewhat different in some way. But the want is exactly the same!

    Another aspect of the sense of self is its capacity to (chameleon like) identify with its own exudation of ‘costume, drama and pageantry’. Australian, American, Inuit, Hindu, Christian, Stenographer, Astrologer, Mother, Father, Young, Old, Male, Female. Like an onion, one has to peel off layers one by one, to get closer and closer to what constitutes the essence of this absolutely remarkable phenomenon in human beings – the sense of self. The enigma of ‘ME’. In some ways it is like a film on which everything gets imprinted, and on which everybody tries to impose their own ‘version of reality’; and yet it is, in essence, if only people could be shown – a film before which no less than the infinite energy plays for our delight! On it, far below on our earth, the battles of the world are fought as the wars of the layers of self go on and on. In it, ideation is reflected – and the play is burnt and etched deeply upon the human soul. Pain is supposed to tell us we are doing something horribly wrong! When all we really long for is Peace!

    If in the sense of self the layers (identifications) become dysfunctional in some way, then the psychologists and psychiatrists are rolled out to ‘heal and ameliorate’ the condition; restore harmony to relations both internal and external. Above all else, the layers must be preserved and allowed to evolve into a healthy and wholesome, educated condition: (which I agree is absolutely necessary for those who choose to dwell within these layers – with the caveat that the layers are becoming increasingly dysfunctional globally when you look at the ignorance of our ‘leaders’ (towering egos) that attempt to control the world; and no less, because at a human level, all are relying on similarly empty buckets to fill their own, it seems hardly a viable system). But, whoever is courageous enough to ask that little question: ‘but what if this sense of self is an illusion’ is transported instantly to a world of far different possibilities. What if, instead of going down the road of increasing complexity of the self, group selves and group intelligence and all the rest of it – we walk in a different direction?

    These are humanity’s pioneers and explorers in my understanding.

    It is not like the layers of the onion can disappear – more like they become transparent and lose their control over the persona. The layers of self only exist as identities so far as they are fed and held in existence by their owner. Even if they were to dissolve entirely, there is still a point of consciousness within the human being (as in the animal but not self-conscious) that looks out upon the world and observes, just as there is in the child within whom the layers are all but absent. The dramatic actor and inquirer, masquerading as the ‘I’ under the guise of some layer has no further role to play; but capability remains as a service to be rendered, free of ambition. This is possible when the ‘I has found its true home.

    I mean, the logical conclusion of enduring and increasing complexity is we end up incapable of having a conversation, even with ourselves! ????? We checklist ourselves out of existence …

    Just thought I would try and depict the view through another filter!

  10. Interesting. So, one could consider a similar scenario but with the interpretation that came naturally to me?

    In any case, I came across, some time ago, with a book by Ken Binmore (Fun and Games) where he claims that games appear to be quite successful in describing biological/ecological phenomena, where players can hardly be considered rational.

    In these games, payoffs are usually defined over the number of descendants a strategy yields; unlike their economic counterparts, this would be, at least potentially, objectively measurable.

  11. “In these games, payoffs are usually defined over the number of descendants a strategy yields; unlike their economic counterparts, this would be, at least potentially, objectively measurable.”

    In the US, the elite, minions and and cronies reap the economics reward. Meanwhile, over half the children born in the most recent count were to low-income minority families. Whose is “winning” here, taking the long run into account? “The meek shall inherit the earth.” — Matthew 5:5.

  12. First off I agree that the number of crappy jobs are exponentially higher than the number of good jobs. I think the reason for that though can be traced back to the beginning of modern day capitalism. The division of labor and specialization were the terms coined by Adam Smith but the theories have been present since Plato and before.
    When you divide labor you will inevitably end up with different types of jobs, over the years CEO’s and managers have further divided the labor to ensure that the upper class positions included more favorable working conditions. What we have ended up with is labor that is so divided that the bottom tiers of employment are trash. I mean why cant an office full of people clean up after themselves, they can but they can hire a person to clean their office for half the rate of one of the office workers so from an economic standpoint they look at it as cost saving.
    I think that it is a natural byproduct of industrialized capitalism. A negative by product that has the effect of locking the poorest members of society into an inescapable circle of poverty, but a by product none the less.

  13. Good thoughts, James. I don’t disagree with your observation except to note that there is a deskilling that often accompanies specialization. Not always, but often. For instance, Adam Smith’s pin factory example involved breaking up tasks into various simple ones and then having individual workers specialize in one or the other. That is an example of specialization that also involves deskilling.

    The primary motive for such division of labor may have been to divide and conquer, or it may have been to deskill jobs and increase the precariousness of many workers, or it may have been to improve technical efficiency, or some other consideration. I don’t necessarily want to emphasize the deskilling aspect over the other factors. I just think it is probably one factor in the mix.

  14. “The meek shall inherit the earth.” — Matthew 5:5.

    Sales propaganda.

    That’s how the early Christian’s got the recruits in the Roman period. Put out a statement that the poor people can believe in but can never be proved either way.

    Classic religious recruitment technique.

  15. Neil, you do admit that history has a liberal bias and that the proles have over time replaced their former lords. The “better genes” theory has been proved “in the long run” to rest on a fallacy.

    President Obama is the descendant of a former slave, ironically on his mother’s side.

  16. The meek shall inherit the earth

    That’s because the courageous find their way to ‘truth’. On return they find everything has been turned upside down. Inheriting the earth elevated to acknowledgement, approval, even realisation of the GOD of their creative (but uncontrolled) imagination! Oh phantasy, swimming around in the minds of men! Like market equilibrium and class; everywhere is theatre, everything religion (at least the scientists are trying hard to be straight). Even looking back to conversation on the streets 500 years ago tells us most of what we call reality is conditional.

  17. The planet was evolving quite nicely up to the point where blind and selfish human intervention began to impact.

    I think you are committing a fallacy here (h/t Lord Keynes)

    http://en.wikipedia.org/wiki/Appeal_to_nature

    Although the outcome known as nature can be considered ‘nice’ in an abstract aesthetic sort of way, I don’t think the non-human ecosystem can be judged on a human ethics scale. The appreciation of nature as something good, beneficial or worthy of imitation is also quite a recent development in western society.

  18. And I also can’t say that this post characterizes employers as I’ve experienced them. Having worked for several small companies and now a big one (government), I can’t say I was ever held back from on the job learning or from otherwise becoming indispensable. What I have experienced though, is that information or skills that have the potential to threaten the authority of a superior / employer are systematically withheld. Wages are an obvious example.

    My take on why most jobs are crappy (apart from having to define crappy) is, that the things people desire, or believe they desire, require crappy work – even without division of labour. Im mean, how crappy is cleaning or changing baby nappies? But hey, we want a clean flat and a non smelly baby. So it’s a shit job but someone’s got to do it…

  19. “‘The planet was evolving quite nicely up to the point where blind and selfish human intervention began to impact.’
    I think you are committing a fallacy here (h/t Lord Keynes)”

    The basic idea is correct though. When species becomes so successful that they take over their niche and continue to proliferate without check by predators, then they end up either depleting vital resources or fouling the nest in some way that leads to either culling back or extinction. Humanity is extraordinarily successful and has proliferated to just about every available niche on the planet and eliminated all major predators other than parasitic microbes. However, this extraordinary success is now leading to problems that threaten severe culling or even extinction due to technological innovation that is not matched by social innovation.

  20. Hi Oliver – I don’t think Nature can be judged on any scale. It is incredibly violent and destructive in part (whole galaxies can crash into each other); incredibly serene and peaceful in another. It rests, and pulses, only to spiral out into some new activity. It is what it is and our opinion doesn’t seem to matter. It is the energy that drives the whole thing of the greatest interest for me! The pulse within. The beauty within. For me, the origin of self!

  21. As a house painter with an econ degree, I can attest to the reality of your alternate application of the model in which “luck” leads to one’s ability to attain a “good job.” If you graduate with honors from college, but have to settle for working at the convienence store immediately thereafter (because the good jobs you applied for all had 50+ other people applying for them too), it will be almost impossible to break out of the low-wage manual labor field. Try applying for a lower-management position when the last job on your resume is “janitor” and see how far you get (spoiler alert: you won’t even rate an interview).

    Of course, it’s not really luck, it’s a systemic feature. The number of degree holding construction workers in my town is shocking.

  22. I like the analysis, but ultimately you seem to be arguing that deskilling happens for economic reasons. Why not argue what you seem to be implying in the early part of your post–that it’s a decision that managers make regardless of the economics?

    There’s always new terms you can introduce into this model–what about the costs to the employer of finding and training a new worker? The costs of mistakenly hiring a bad worker? The time spent understaffed? In addition, plenty of research has argued that the better you pay workers the more productive they are. And for employers with high capital costs, penny-pinching when it comes to workers is probably not economically beneficial in the short run. So it may not be worthwhile for an employer to go with a low-skill, high-turnover, less productive workforce (although it may benefit employers in the long run if lots of them pursue this strategy). Since the economic benefits aren’t clear, it’s more likely that employers want a regime where they can control workers, and may even mistakenly overestimate the benefits of cutting labor costs.

  23. “Since the economic benefits aren’t clear, it’s more likely that employers want a regime where they can control workers, and may even mistakenly overestimate the benefits of cutting labor costs.”

    Neoliberalism in a nutshell.

  24. All very nice, but completely missing the point, which is trivial.

    It all depends on the balance of supply and demand for labor. If there are 100 desperate people competing for every job, workers are disposable, they can be paid slave wages and treated like dirt. If there are four or five businesses desperate for anyone to drive a truck, and one truck driver, well, truck drivers will get high wages, AND be treated well and the businesses will go out of their way to make their jobs more comfortable.

    So: it’s all about population growth. This is why the rich and powerful want, more than anything, rapid population growth. This is why the rich and powerful have fought and clawed to obscure the simple Keynesian/Classical view that demographics trumps finance: so that the masses won’t protest when the rich aim to flood the labor market.

    Bottom line: it’s supply and demand. Period.

  25. T Gawne: Bottom line: it’s supply and demand. Period.

    Lol.

    Everyday I face demand for idiots. That is those who can consciously click windows buttons for no purpose at all. Why no purpose? Because they are useless. Their buttons are useless and their clicks are useless. Yet, those constant FTE fights make them very valuable. And so idiots are in constant and high demand while their main contribution is *not* to do any harm. They can click google, youtube, whatever. Well, youporn is not really appreciated. As long as they click some useless websites their harm is minimized they remain valuable. Very valuable and in high demand.

    But valuable not in your sense. They are valuable for completely different reasons.

    That is the world I live in every day. And you? Still dreaming?

    Lol. Period.

  26. Just ran across this page, so probably posting after anyone cares. I am a manager who deals with the issues associated with this article. A few, brief points you missed:

    1. You’re not thinking in the aggregate. If I have an employee going bolshie, he’s getting canned regardless of cost of replacement. As an example to the other employees.

    2. I deal with high skill employees. I will always can the employee who tries to make himself indispensable. Indispensable means he wants to do one job for the rest of his life, and not contribute to the growth of the organization.

    3. Capitalism is synonymous with de-skilling. There used to be these things called “master craftsmen”. They went under other words like cobblers, tinkerers, black smiths and others. Capitalism started by breaking down those skills into independent steps that could be done by unskilled laborers, and put them on a factory line. You could produce much more at a far lower per unit labor cost. Especially when you used government to create a transportation and energy delivery systems.

    Anyway, enjoyed it.

  27. It gets worse. Corporations are funding universities to develop robots that can work side by side with staff.

    Think someone that costs about $3.50 ph and who can work 24 x 7, very helpfully assisting you in your job until ……

    Can anyone else see where this is going ?

  28. Accepting the premise that the curve u=m+ce raised to the negative tau t will suffice to draw out all things about learning a job given that the variables have known values and the constants remain just that. But work is seldom like that, the known variables fluctuate wildly and new constants are brought in unexpectedly and current work standards and norms are modified beyond belief. Perhaps that is just a new learning curve or the beginning of what amounts to a new job. So, saith the management types unto themselves, may as well bring in someone new since many of the current jobs in the company are redefined. But what about the social environment of the job? Is that part of the formula? What if the culture of the work place involves heavy discrimination on the basis of sex, race and religion and management does nothing to correct the situation. Does that make the learning curve different for those who don’t accept the givens of a prejudicial mind set?

    Also, I don’t appreciate the tone taken about so called McJobs. Having had more than my fair share of those and then finally successfully graduated to a ‘real’ job, I would say almost all work related tasks are very much more complicated than what is given credit for in this article. I would appreciate a serious approach to what entails the words, ‘job’ or ‘skill’ in a follow up article. Professionals who do time studies on tasks done at work will tell you even the simple task of turning on a PC and starting several applications involves a multitude of skill sets that have taken years to master.

  29. Peter the analysis here doesn’t seem to include any constraints that have to do with the nature of the output the firm is organized or designed to produce. Your account makes it seem as though the employer has wide latitude, given the purposes of the firm, either to create jobs that are fulfilling and full of indefinite learning and creativity, or to create McJobs, and so if the latter occurs that must be due to a strategy of labor discipline, a desire for hiring and firing flexibility, etc.

    Those certainly might be factors, but I believe the more fundamental factor is likely more humdrum. Firms usually exist for a small set of limited purposes. There is only so much learning and creativity that can be applied to the process of making and selling widgets. Once the firm has succeeded in securing a share of the widget market, its need for the kinds of creativity and knowledge that can help it make ever-smaller marginal improvements in the widget-making process, or in its sales results, diminishes rapidly.

    You begin by saying, “Work, being a core part of life, is meant to be interesting, engaging, and meaningful.” I don’t understand this statement really. “Meant” by whom? The creator? It doesn’t seem to me that work is meant to be anything other than what we do to have a life that is only better than the life we would have without work. From time immemorial, long before capitalism, people have complained about the horrible curse of labor and “necessity”. Life has often appeared to even the more prosperous people to be hard, and backbreaking, tiring, dispiriting and dangerous labor the cost of scraping out an extended finite existence that is at least somewhat more comfortable than the life of beasts, and enriched with a few material extras. In some societies, the ability to avoid work almost entirely and pass the costs of laboring on to a variety of slaves, serfs and subordinates whose labor one exploits was considered standard operating procedure for anyone living a “good” life.

  30. High skilled jobs are paying well In this economy. Sure it’s only the top 10% but it pays well.

  31. There are also two emerging trends that need to be taken into consideration in analysis of work in a developed capitalistic economy like the US going forward. The first is the proliferation of temporary work and the second is the use of contractors instead of hires. WRT the latter the IRS (IIRC) stepped in a ruled that if the majority employment is with a single firm, then it’s treated as a hire. It is also well-known now from Iraq and Afghanistan that the number of contractors used by the military in combat area equals or exceeds the number of troops.

  32. Agreed, and great observation. The suggestion of the post is that even without any impediments to firing — firing at will is deliberately assumed for the sake of argument — and even ignoring any other impediment to high staff turnover or the design of crappy jobs (e.g. effects on morale or worker effort) there are costs to labor turnover when ongoing learning is a significant characteristic of the role. Deskilling reduces these costs and enables employers to take full advantage of any victories they might achieve in the industrial sphere such as being permitted, in effect, a closer approximation to firing at will. This is why it is suggested that they will prefer, if they can, to deskill roles.

    But, by the same token, employers can’t take maximum advantage of deskilled roles if there are legal impediments to firing, hence the attempt to move closer to firing at will, such as in the example of redefining what constitutes hiring (lobbying for rulings that temporary work or contracting don’t count).

  33. A bunch of arguments for socialism. And whining about why you don’t have the job what you want. And whining about everything you think you are owed. Get over yourselves. Put your nose the grind stone, increase what you have to offer your employer and pipe down.

  34. I disagree. You take an opinion you have, then apply a ton of numbers, graphs, and long discussions. And then you think you’re proved a theory. But all you’ve done is go on at great length with your opinion.

    Yes there are numerous companies that do view their line employees as fungible. But the vast majority do not. The vast majority look for people that are motivated, smart, skilled at the job, and a good fit. And they treasure those people because they do a better job. Much better.

    That does not mean companies will treat employees perfectly. And the pay that makes sense for the job may not be what the employee thinks they are worth. People see things differently. Individuals will generally value their own contribution higher than those of their co-workers.

    And to a certain extent all jobs suck, some more than others. But don’t blame the company for an attribute of a job.

  35. Peter,

    Very interesting post, but I think it falls short of describing actual job behaviors in the workplace. You start by discussing the quality of jobs. “Work, being a core part of life, is meant to be interesting, engaging, and meaningful.” Then you immediately move to wages. How does your model measure quality, interest and meaning? It only measures wages. Are we to assume there is a direct and high correlation between dollars and meaning? If so why are there so many poor artists? Are we to assume every high paying job is meaningful? Then why are CEOs routinely described as mild sociopaths?

    If you think there should be a direct and positive correlation between wages and meaning, then your model is more normative than positive and then fails to accurately explain the deskilling you observe. (Great word by the way. Did you coin that?)

    Also, you assume that employees are deskilled involuntarily. I can tell you as a manager, many individuals choose not to build skills as it takes time and effort. I am very aware of the trade off in building skills and taking leisure. I balance the two based on my own preferences. Others have different preferences. As a manager, I know firsthand that many do not want to build skills at the cost of other things such as spending time with family and friends or pursuing hobbies. In the eyes of many, building skills actually takes away from the meaningful part of their lives, so I think your fundamental thesis needs work.

    In large-scale capitalism, where the corporation is the organizing entity, everything is designed to be replaceable or substitutable. This applies to all employees from the c-suite to the mail-room. It also applies to owners/shareholders. This is why corporations exist! Otherwise partnerships would suffice.

    Your thoughts on the future of capitalism in an information economy are interesting and I hope you elaborate upon them. Thanks for sharing.

  36. Software and robotics will take these crappy jobs. People will have more time to spend, more ideas to explore, new professions will appear. And this circle of software replacing, then augmenting new jobs, then replacing… will repeat.

  37. Interesting responses, all. They are appreciated.

    Dan: Thanks for your thoughts. Undoubtedly we have a different philosophy when it comes to work, but I agree with your point about technical characteristics of production constraining the design of jobs. I don’t really intend to suggest much more in the post than that, other things equal, a deskilled production process in which roles offer little opportunity for ongoing on-the-job learning is preferred by capitalists, because this makes workers easier to replace. Technical aspects undoubtedly have an effect on whether, and to what extent, roles can be deskilled.

    As a little background, my original reason for considering learning curves — quite some time ago now — was in relation to the way variations in on-the-job learning opportunities across jobs can exacerbate the effects of instances of bad luck or discrimination in hiring.

    I apparently wrote at one time, “[W]orkers are depicted as competing for employment opportunities that have been shaped by three main factors: society’s technical knowledge, the nature of training costs across jobs, and sociological determinants of wages. … [The] framework is [also] open to the possibility that capitalist employers design jobs with issues of hierarchy and control in mind. For example, jobs that are of greater strategic importance to capitalist employers – typically technical,
    scientific or managerial positions – will tend to entail higher remuneration and better working conditions … Such considerations of hierarchy and control are also likely to influence the development of society’s technical knowledge, … since it is capitalists who ultimately decide which technologies are adopted out of the various possibilities developed by inventive individuals and organisations.”

    In other words, I agree that there are a variety of factors shaping job formation. As I mention earlier in the comments, if a branch of production is profitable, constraints on deskilling (which might be technical, regulatory, contractual, or collective-bargaining based) will not prevent capitalist investment into the sector. I am just suggesting that if and when a process can be deskilled, it will be, partly because this makes workers more expendable.

    In my earlier consideration of the circumstances in which instances of bad luck or discrimination might be perpetuated, it seemed clear that the distribution of jobs — particularly the distribution of learning opportunities — has an effect. Missing out on a ‘good job’ — one that allows ongoing learning — obviously increases the probability of bad luck or discrimination having long-lasting effects for individual earnings.

    In this post I turned that around and viewed it from the perspective of a non-discriminating employer who does not really want undeserved advantages or disadvantages to be locked in, because such effects actually lock in employers in terms of hiring flexibility.

    Likewise, there is little I disagree with in other comments, in that I see the idea addressed in the post as simply one aspect of the broader topic. It was provocative of me to call the post “Why so many jobs are crappy” rather than “One reason why …”. But a little provocation is almost compulsory for posts in the Humor category, and it probably drew more varied comments than if the relatively innocuous title had been chosen.

    Even so, the volume was turned down a notch in the final concluding remark, where it is merely suggested that “capitalist deskilling emerges partly as a response to the effects on worker discipline that are potentially created by on-the-job learning.” But that could not serve as a satisfactory post title for the ‘Humor’ category. I save those scintillating titles for posts in the ‘Economics’ category on Marx’s theory of value, Kalecki’s three vertically integrated departments, or Smith’s pin factory illustration.

    A few observations:

    Somebody mentioned supply and demand. Although I reject a strong emphasis on supply-demand analysis, I agree that labor demand is intentionally kept too weak to maintain full employment. This is a deliberate policy choice that governments implement through their fiscal actions. For workers to be expendable, there need to be not only deskilled roles but a ready supply of unemployed workers waiting in the wings.

    Somebody else pointed out that complexities and so forth send the m’s and c’s in unpredictable directions from one moment to the next. This is not actually a problem for the ‘model’. The average m’s and c’s over the duration of the employer’s time horizon will suffice. There is also nothing to prevent the determinants of the m’s and c’s being as complex and socially contingent as is considered appropriate. But drilling down into those complex causes would not have altered the impact of those parameters — however they are determined — on the expendability of workers.

    It was further asked whether the effects of prejudice, discrimination, and other factors can influence learning. The answer is yes. This is allowed for because rates of learning on the different learning curves differ, due to v, and the m’s and c’s also differ. Again, though, it makes little difference to the motive for deskilling whether these differences are caused by technical, sociological, or psychological factors.

    In a similar way, including all the other factors that might be causing the creation of so many ‘bad jobs’ would not add much to an understanding of the particular effect being discussed.

    There was mention of other factors such as the probability of hiring a bad worker (I did address this in the post), restrictions on firing, other costs of staff turnover, etc. None of these factors make deskilling less beneficial for capitalists. They simply add other ways in which workers could be made less expendable than capitalists might wish. If anything, these factors make it more desirable, from a capitalist’s perspective, to deskill roles, because at least in a deskilled process (which is easier to monitor and control) the gap in performance between less able and more able (or more diligent) workers is minimized.

  38. America is such a horrible place to work. Thankfully, the rest of the western world is not yet as bad.

    Take my advice: get out while you can. Go someplace where they value people such as Canada, Australia or New Zealand.

    Or if you’re feeling adventurous go to Europe – in a few years – when the Austerians have been kicked out of power.

  39. Interesting line of inquiry, but it seems largely based on a just-so story involved a boss from Modern Times or Dilbert. Sure, there are lots of those out there, but it doesn’t generalize to the labor market overall. Plenty of relatively high-functioning managers would love to improve the productivity of their employees in order to foster their own career success (look at what my team accomplished) and the performance of their companies. So I think this thought experiment based on bargaining power is insatisfactory.

    Perhaps a better rationale is that primitive management theory focused on breaking work down to simple and thus highly boring tasks. Getting work done efficiently without this division of labor is much more difficult, and the benefits are rather intangible and uncertain. Because bosses have gained their own work experience in a highly regimented work environment, they are likely to replicate that to a large extent rather than taking a risk on a different way of doing things. So the barriers to more interesting work are a need for greater investment of intellectual capital (process design) to do so, a cultural barrier to it, and also the inherent difficulty of doing so (the changing the wheels on a moving car issue).

  40. Is the premise that jobs are being deskilled even correct? It used to be that you could be a typist or a file clerk. Now those skills are consolidated into admin assistant who is also suppose to know MS office suite which might be considered crappy, but not deskilling. The change in low wage/high wage job ratio seems more likely to the change in size of industry sectors.

  41. I don’t think work is meant to be interesting, engaging or enjoyable. Those attributes are luxuries that some jobs provide and some workers may acquire them through investment in education, initiative, or other means. But work is what has to be done for people to provide for themselves and others. Work is no more meant to be interesting, enjoyable or engaging than food is meant to be tasty, properly prepared and visually stimulating; or that clothing is meant to be sexy, fashionable and flattering.

  42. I think you don’t get it. There is a simpler reason. In a small company, one led by the founder, everything is personal, people treat each other like persons, the founder has goals beside making money (usually a kind of professional pride), the founder and employees feel a personal loyalty.
    In a big, publicly traded, led by employee-CEOs company all this personal aspect falls wayside and it basically becomes a “soulless profit machine” in the sense that this personal element is taken out.

    You can notice that companies that do interesting stuff, even when big, are not really this disinterested institutional shareholders come together and employ any random profit-maximizing CEO types, but the ones that are led by a founder with a strong vision, a passion for the product, a professional pride: Rockefeller, Pullman, Henry Ford, Bill Gates, Steve Jobs, Sergey Brin / Larry Page and so on. In a certain and good way… this form of capitalism is a bit “feudal”, a hierarchy of _personal_ relationships.

    IMHO whether capitalism looks exciting or soulless and inhumane largely depends on whether the current culture emphasizes these strongly personal companies that are led by people who have personal goals other than making money vs. the depersonalized, institutonalized, bureaucratic, managerial disinterested-shareholders-looking-only-for-profit, employee-CEOs-caring-only-about-cost-cutting type.

  43. One of my frieds is a consultant that only consults directly to CEO’s of large tech companies. He was telling me that the result is always pretty much the same. He does his analysis, then presents his finding to the CEO, beginning with, “I have identified your problem. It’s that everybody thinks you are an a**hole.”

    I have another friend, cousin actually, who consults to small firms. He says the same thing. Large firms have no monopoly on this.

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