Unemployment is always an issue faced in the modern world. Job Security is normally within nearly any “top X” list of priorities for employees. There are many things that can affect job security overall. It could be from general changes in the markets, process streamlining leading to downsizing, the business moving locations, or more. One of the things that isn’t happening though is the notion they’re being stolen. Today on bad arguments I’ll be reviewing the concept that “They took our jobs!” and hopefully putting this one to bed.
The first question, of course, is this: if jobs are being taken then who is doing the taking? Is it the college or university graduates with the degrees? Surely not as that would just be domestic labor competition. Is it Big business swallowing up smaller businesses? Not at all as the same amount of general work would still need to be done, and new competitors arise constantly. The three most commonly blamed things that are “taking our jobs” are Illegal immigration, automation, and Globalization.
This is the most commonly blamed group of people that are supposedly taking all the jobs. While some may argue from a perspective of plain old xenophobia there are those that make a compelling argument from a purely economic perspective. The notion is that with the increase in population from people willing to take lower wages (due to their undocumented status) that employers will be more likely to employ them rather than high-cost citizens. There are big flaws in this thinking. The first and foremost is the idea that Americans would have gone for this kind of work in the first place. Even if the wage was slightly more competitive, Americans wouldn’t immediately rush to fill all of the low paying temporary jobs that illegal immigrants are willing to work.
The next problem is the idea that this is somehow different from legal immigration. With legal immigration immigrants are able to work proper jobs, are held to paying proper taxes, and can properly benefit from benefits that only full citizens are allowed to access. With either form of immigration there are additional bodies entering the country and by extension, for the most part, entering the workforce. The only difference is one pays taxes and would be aiming for similar ranges of wages as you. If you have a problem with illegal immigrants as far as the labor market is concerned, but not with legal ones then your issue isn’t the way they migrated: its taxes and the legal code related to labor.
Lastly is the issue of counting heads in general. The population is continuously on the rise, with or without immigration. The part to consider is that every new person that enters the country, whether they are born and mature into adults or immigrate here, they don’t solely become new workers. They also become new consumers. Whether this happens over time as with natural born citizens aging, or immediately with immigration, legal or illegal, the increases will remain the same. For all of the growth the United States has had, only once since 1948 has there been an unemployment rate higher than single digit. Something to keep in mind for the other areas of complaint.
The doom and gloom around automation always reminds me of the lamplighters of old. Before the standard of electric street lights, there were people, called “lamplighters”, which were employed in a town or city to manage the nighttime lighting. Their job included lighting all of the candles (which later became gas lights), replacing them if and as they broke/were used up, and putting them out at dawn. Now, how many people lost their jobs because of lighting technology?
The job of making the candles was lost when the lights switched to gas. The jobs of the lamplighters were lost when we went electrical. The job of manually turning the lights on was lost when we were able to turn them on automatically at sunset. While those specific jobs were lost to automation there is a larger picture at play that is missed. There were jobs created for installing the new lighting, the wiring, the bulbs, maintaining the automatic system, manufacturing all of the parts, generating the electricity in the first place, and so on.
In many ways, the story of the fear for the jobs of the lamplighters is an inverted version of the Broken Window Fallacy. For those unfamiliar, the Broken Window Fallacy tells the story of a child that breaks a window, which in turn leads to work for the glazier (window maker) who in turn would use the extra money and boost the local economy. It’s a fallacy to think that way because it fails to account for the fact the father of the child is now out that money himself, and he would have spent it on other things without needing to go through the glazier. Also, repairs and replacements of preexisting things are a loss economically. While the father may have bought something new with the money, now the glazier will buy things with the money less the costs of the materials for the window. Maintenance, in this case, is a net negative rather than the perceived positive once other factors are accounted for.
I call the case of the lamplighter an inverted version of this fallacy because the closed perception is that the loss of these jobs is a net negative, while after reviewing the further picture we can see it as a net gain. A study from Deloitte last year on the topic of automation in the UK found that nearly 800,000 jobs had been lost to automation over the 15 year period examined. This would make you say “Aha! I knew it!” but you would still be wrong. The same study concluded that the net gain in jobs was near 3,500,000. In addition, the new types of jobs that arose paid on average an additional £10,000 to their employees and a directly related net gain to the economy of £140,000,000,000. From the Ford assembly line and forward we’ve seen this gain over and over again yet still we argue against it. At this point, the automation argument isn’t just questionable; it’s plainly false.
Now globalization is an interesting one. The jobs argument against globalization is the idea that key jobs such as manufacturing would be lost to other countries capable of doing the work at far lower wages due to the difference in the quality of life and currency exchange rates. Similar to automation this is indeed true, however, it does fail to account for the larger picture.
The lower wages paid for the manufacturing of products overseas leads to a combination of lower prices domestically and higher profits for the company. The lower prices, in turn, affect demand which has played a part in the transition to a service-based economy. It also means that items previously outside the budgets of lower-wage workers are now potentially available to them. The higher profits contribute as well as companies now have more product to move and in turn need more staff to warehouse, stock, deliver, and sell said products.
There is also the overall levels of opportunity that come from a globalized market. General globalization allows the average consumer more access to products and options from around the world, drives down pricing, and opens entrepreneurial avenues that a closed, isolationist economy would not allow for. As was mentioned above, the overall levels of unemployment have remained mostly consistent for nearly 70 years. This is not a loss in the manufacturing sector, but rather a shift to services and higher grade employment, higher resulting wages, and an overall win for entrepreneurs, workers, and consumers alike.
While it is true that specific jobs may be lost to the changes our economy experiences labor-wise, it is false to claim that “they took our jobs!” Whether its illegals, robots, or China, the plain answer is no, they didn’t take your jobs. If anything these three things has been a complete gain for you. Let’s stop staring through the broken window and let this bad argument remain unemployed.
Read more articles from Killian on Think Liberty here.