The Jobs Conundrum
Posted on November 24, 2009
The Jobs Conundrum
Warning: What I am about to say here is politically incorrect. If you can’t handle politically incorrect statements, please do not read any further.
A Washington Post story had a troubling story about the unemployment rate among African-American men: “Joblessness for 16-to-24-year-old black men has reached Great Depression proportions -- 34.5 percent in October, more than three times the rate for the general U.S. population. And last Friday, the Bureau of Labor Statistics reported that unemployment in the District, home to many young black men, rose to 11.9 percent from 11.4 percent, even as it stayed relatively stable in Virginia and Maryland.”
If unemployment is so high among young black men, why are we importing young Hispanic men from Mexico and El Salvador to do construction work and other manual labor?
I live on Capitol Hill and I see a lot of manual laborers working on various projects. Road construction (paid for by stimulus money), landscape work, (paid for by House Appropriations Committee), water projects (paid for by the DC government) all moves forwards, even in this tough economy. Only rarely do I see an African-American working on those projects. Only rarely do I hear English spoken at the work site.
Why is that? Surely, with unemployment among the young black community at above 30%, some of these projects could hire black kids to do the hard work of construction. Why don’t they?
Are these jobs too menial for young black men to do? Do the Mexican workers have some peculiar skill set that they have magically learned in Mexico that the African-American kids don’t have? Is there institutional racism that keeps blacks out but gives Mexican immigrants a leg up? Are the welfare benefits that we provide to American citizens (but don’t provide immigrants) so nice, that they provide perverse incentives to keep black kids unemployed while keeping immigrants working?
I don’t have the answers to these questions, but I wish more people were asking them. An unemployment rate that hits 30% of the African-American community is a dangerous thing.
I had a conversation once with an owner of a small cement making company. He told me that he hired mostly Mexican workers to do the hard labor of making cement. I asked him why and he told me they do the work. “They work their butts off, they show up on time, they are hungry, and they get the job done. This country couldn’t survive without immigrant labor.”
And I as a look around, I know he is right. Who does most of the cleaning? Immigrant workers. Who does most of the construction? Immigrant workers. Who does most of the landscaping? Immigrant workers. Who does most of the bussing of tables in restaurants? Immigrant workers.
They do most of the work, because they are not likely to complain too much. They are not likely to demand a raise. They are not likely to file a lawsuit, charging discrimination. But they are likely to work. And so, they get the jobs.
I would like some reality injected into this whole debate over jobs. In the private sector, jobs only go to those who are productive. How can you help with the bottom-line? That is the question that employers ask.
But that is not the question that Democratic politicians ask. They ask, how can this help me get re-elected?
A perfect example is with the whole debate over the unemployment extension.
Democrats love to beat Republicans up over the extension of unemployment benefits. They love to call those mean old Republicans heartless. They love to legislate by anecdote, telling the sob stories of constituents who need government money to keep food on the table. But the facts tell a different story. And the truth is that the longer you extend unemployment benefits, the higher you will keep the unemployment rate.
Most economists will tell you (privately) that the surest way to keep the unemployment rate up is to extend unemployment benefits. Bruce Meyer, an economist with the University of Chicago once did a study that proved that “higher UI benefits are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving unemployment rises dramatically just prior to when benefits lapse.”
I have seen studies that show that 90% of people who were on unemployment magically got jobs the last week their benefits were set to run out. Amazing coincidence, huh?
Now, that is not a politically correct thing to say, and clearly, a lot of folks aren’t getting the kinds of jobs they want to get, at the pay they want to get paid. But the more the Democrats push to extend unemployment benefits, the higher the unemployment rate will stay.
But by legislating by anecdote, the Democrats come off as being compassionate, caring, and responsive to the unemployed. They see this as political winner for them.
Good for them, bad for the economy.
At the end of the day, it is all about productivity. How can we create jobs that make our economy more productive and make nation more competitive? What changes can we make to incentivize and inspire young black men to get jobs and not stay unemployed?
I am not hearing too much straight talk from the President (or anybody else) on the jobs front. At what point do we get the political class to stop legislating by anecdote and start doing the right things for the future of the country?