Dilemma of the minimum wage: paying labor for more than it’s worth Part II

I’m not really into the suppositions over growth that is jobless. Because there are jobs. And there is a lot more to the word ‘jobs’ than how it is being thrown casually about. Or, are we just bored with the usual ‘unemployment’ fare on our plates that we’re looking for another way to dress it up more dramatically?

Why is there unemployment even when total supply of jobs is large? Part I mentioned the effect of minimum wage. Apart from this, there are

…seniority provisions…discriminate against the low-productivity worker. Knowing that he will be permitted to promote only from within, an employer does his best to hire only those whom he can afford to promote eventually. Therefore, the worker who is perfectly capable of pushing a brush around the factory floor but not of doing much else will not get a job. The employer cannot risk having to put him in charge of an expensive machine or in a supervisory position someday.

Occupational licensure is another way… By restricting entry into certain occupations to those who have passed a course of training – by requiring, for example, that in order to cut hair one must graduate from a barbering school that provides at least one thousand hours of instruction in “theoretical subjects” and then go through an apprenticeship… the cities…reduce employment opportunities for the workers whose possibilities are most limited.

Illicit enterprises…tend to have the effect of setting an informal minimum wage for unskilled labor that has no relation to the market value of such labor and that other employers cannot afford to pay… Asked why he did not go downtown and get a job, a Harlem youth replied:

Oh, come on. Get off that crap. I make $40 or $50 a day selling marijuana. You want me to go down into the
garment district and push one of those trucks through the street and at the end of the week take home $40 or $50
if I’m lucky? Come off it….

…some chronic unemployment among unskilled workers who are concentrated in the inner city. For one thing, factories have long been moving from the inner to the outer city and from the city to the suburbs and beyond. …economic, class-cultural, and racial factors tend to prevent some factory workers from following their jobs out of the city. Of particular importance are the relative abundance of cheap housing in the central city as compared to the suburbs and the inability or unwillingness of some workers to commute to jobs in the suburban fringe.

…shift from factory employment (to services) has probably been injurious to the unskilled and to members of minority groups: the criteria for selecting service workers are more likely to be “subjective” and thus unfair to – or at any rate unfavorable to – those whose attributes are considered undesirable. No one cares if a factory worker speaks crudely, scratches himself in the wrong places, or is physically unattractive; if he can read signs like DANGER – NO SMOKING and if he keeps his part of the assembly line moving, little else matters. In many service jobs, one the other hand, it is essential that the service worker “make a good impression” on the middle class people he serves. If ethnic, racial, class, or other characteristics render him unattractive in their eyes, he is for that reason unemployable. The problem is not that he is unskilled, but that he is aesthetically objectionable – he spoils the decor, so to speak… – Edward C. Banfield, The Problem of Unemployment, The Unheavenly City.

And others more that my fingers are suddenly unable to type. The issue of unemployment in the context of this country, that is, having a high poverty level (the poor, therefore, lacking in marketable skills), has also to do with institutions or rules of the game in the labor market.

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