Opinion: Better no job than a useless one

POSTED: 06/22/12 2:48 PM

Ewoud Jansen, an economist who publishes in the Volkskrant, launched an interesting attack on the Dutch feel good approach to work. It is better to have no job than to have a useless one, he wrote yesterday.
Jansen disagrees with economists who maintain that useless jobs serve a function. If you drop them as a cost cutting measure, you destroy the economy, his opponents say. But Jansen takes the opposite position: those useless jobs destroy the economy.
That begs for an explanation of course, and Jansen gave it in spades yesterday.
Here we go: “A country is as prosperous as the value of the goods and services it produces. And that is the problem. Because we are very busy with the production of completely useless things, with pampering and bureaucracy. If we look at the real goods and services that benefit citizens and consumers, it is a disappointment.
Our national income is a slowly deflating balloon. The reason of our sick economy is simple. We are not productive enough and we do the wrong things. Employees are so busy that they are entitled to a daily head-massage at their employer’s expense to be able to keep going, but together they simply produce not enough added value.
We could mask all this for a long time by using borrowed money and increasing real estate prices to maintain our standard of living, but that is over now. We are busy with nonsense and that has a price. What to make of shrinking municipalities and bankrupt school conglomerates that are happily busy building new town halls and unnecessary inspiring teaching locations? High speed railways without passengers?
Someone told me that this is indeed useless, but that it feeds a number of construction workers. You have to create employment instead of destroying it. More jobs are good for the economy.
But that is one of the most fundamental logical error about employment and economy. Many people, especially politicians, pay more attention to the fact that people are working than to what they are actually doing. People with a job have income and purchasing power. More jobs mean more purchasing power and therefore more economic growth. That is the often-heard but not always correct reasoning. Creating jobs becomes the highest political goal this way. That makes me a bit wary. Because chances are that jobs are created that are not really productive.
Of course I do not begrudge those construction workers their jobs, but only if there is something to be built that benefits the tax payer of the private principal. Creating jobs is potentially harmful.
The innovation in education has created a whole new sector of education consultants with a lot of new jobs. But the quality of education has not improved. On the contrary.
There is therefore a lot of work that does not make a lot of sense. Imagine an organization wherein half the staff produces reports while the other half archives them and eventually shreds them. The organization and the staff’s efforts are useless. They do not add anything to the prosperity-cake, because they do not produce anything that benefits anybody else whatsoever. These people can go home with permanent pay without anybody noticing.
Yes those people are making a living, but they do so at the expense of others. And yet there are economists and politicians who think that we have to keep these jobs, because otherwise the economy will be destroyed. But these are exactly the jobs that destroy the economy.
If we do not have to pay all these unproductive employees anymore, the income of others can increase, for instance by lowering taxes. If they are working in the private sector, cutting useless functions could lead to higher profits or to higher salaries for employees who are productive.
Useless work does not generate more purchasing power, but it moves that purchasing power from productive to unproductive employees and organizations. That may be pleasant for those employees who find that they have a pleasant way to pass their time, but it is a nuisance for others.
It is therefore better to let all these people do something useful, something that benefits the citizen and the consumer. Such a transformation will take time of course, but in the long run the cake called prosperity will really become bigger. And then we are all able to eat a little bit more. That is the essential characteristic of productive labor: earning a living by being of service to others and not to yourself.”
Wow, we thought, that is an interesting take on employment and prosperity. Time for our politicians to examine which government services benefit our citizens and which services only benefit the people who work there. It could make balancing the next budget a lot simpler.

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