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Because, You Know, People Are All Exactly the Same and Need the Exact Same Things

May 29, 2008, 10:48 pm

The Arizona Republic the other day had this headline which certainly caught me attention:

Report: 35% of Arizona jobs  'bad'

I can sympathize.  I have had jobs that were boring and unrewarding.  My last couple of Fortune 50 corporate jobs, while nominally cool on paper, were hugely frustrating.  But it seems this particular "report" had different criteria for "bad" jobs:

The new report calls 35 percent of jobs "bad" because they pay less
than $17 an hour, or $34,000 a year, and offer no insurance or
retirement plans. In a typical state, only 30 percent of the jobs are
considered "bad."

Here is the heart of these studies:  A bunch of middle class people sit around and try to decide what jobs they would be willing to accept and which ones they would not.  Any job that they would not accept is a "bad" job, despite the fact that $12 or $14 an hour might be very good pay for someone with no skills, despite the fact that it makes no consideration of a person's circumstances (e.g. single, married, 2nd job, teenager, etc), and despite the fact that $34,000 would probably put a person in the top 20th  percentile of global wages.  I made a similar point vis a vis jobs in the third world.

Just so I can't be accused of cherry-picking, I will use my own company as an example.  We have a about 80 employees in Arizona, about 70 of which are paid less than $10 an hour and none of whom have a retirement plan or insurance.  All of my jobs in Arizona are included in their count of "bad jobs."  And you know what?  We have a waiting list of over 200 names of people who would take another of these jobs tomorrow if I had one to offer.  That's because my employees are not middle-class academics.   Most are older people who already have a health plan, who don't need a retirement plan (because they have already retired) and who just want a fun job in a nice location where they can live in their RV. 

This has to be one of the most utterly pointless studies of all time.  Sure, $14 an hour would probably suck as a 45-year-old college grad with 2 kids.  But it would be a windfall to a 16-year-old new immigrant with few skills and no English.  The only thing that would be more pointless would be to try to compare states - which they also do:

About 22 percent of Arizona jobs are considered "good" because they pay
at least $17 and offer benefits. That is less than the typical state,
which has 25 percent "good" jobs. The rest of the jobs are in between
because they offer some benefits.

Since cost of living is totally comparable between Phoenix and Manhattan, then using a fixed wage rate to compare states makes complete sense.  By the way, by the study's definition, my job, which is usually awesome, is not "good" because I have no health plan.  In fact, in this study, a $40,000 job with a health plan is ranked as good while a $400,000 job with no health plan is not good.  Yeah, that makes sense.

Tags: , , , , ,
Category: Economics
  • linearthinker

    Since cost of living is totally comparable between Phoenix and Manhattan, then using a fixed wage rate to compare states makes complete sense.

    Typo? Tongue in cheek? If neither, I learned something new today. I'd expect Manhattan higher, even excluding taxes.

  • Tom G

    linearthinker - I'm certain that Warren's tongue was planted firmly in cheek when he wrote that. It is pretty obvious sarcasm, considering that immediately prior to that, he wrote "the only thing that would be more pointless would be to compare states..."

  • Ben

    I agree with your sentiments entirely, but this business about how "$34,000 would probably put a person in the top 20th percentile of global wages" is refuted by the later rant against using fixed dollar amounts to compare living in Phoenix and Manhattan. $34,000/year is mediocre for NYC, probably ok for Peoria, and wonderful for Thailand.

    But your point about this being a useless "study" is well-taken.

  • http://libertarian-evangelical.blogspot.com/ George

    Ben:

    You can control for cost of living when comparing different areas. What Warren is pointing out in comparing the $34,000 to the "rest of the world" is the standard of living. That is, when 34,000 a year is placed in the context of other countries (controlled for cost of living), 34,000 will allow for a pretty damn good standard of living.

  • http://www.creativedestruction.com/blog/ Sameer Parekh

    I have a nomination for a "bad" job: "researching" this study!

  • http://www.aguanomics.com/ David Zetland

    Sameer: Whoever did the study DID a bad job, but they probably got more than $17/hr for it :)

    This study unintentionally points out the value of detaching health insurance from work. Make it portable, state-subsidized and privately administered. MSAs all the way!

  • jhc

    Ben

    If by 'Peoria', you meant Peoria, Ill., I can assure you $34K would suck there, too - though maybe not quite as much as it would in Phoenix. It was my hometown and my brother and sister live there still. If you meant Peoria, Ariz., well, that's a suburb of Phoenix.

    Getting back on topic, Warren makes a great point about requiring benefits as part of a 'good' job. When my small software contracting biz had 11 people working in it back in the 90s, I couldn't get a group plan started to save my life. I wanted one but no one else because they were all covered by other plans (their spouses', generally). None of those people was making less than $50K at the time and most were higher. Pretty good jobs by most standards.

  • happyjuggler0

    jhc makes a good point I was about to make, namely your spouse's job.

    Imagine all adults are married, and that 50% of jobs have health insurance that pay more than 34K, while the other half don't have health insurance but they pay more than 34K per year and also pay enough on top of that to buy your own health insurance.

    Now imagine that all marriages have one partner with a job with health insurance, and the other partner without. In other words, everyone is covered either from their own job or via their spouse's job. If 34K is a reasonable definition of a good job, then a reasonable person would say that 100% of adults have good jobs, but the author would say that only 50% have good jobs.

    The author is an idiot.

    Additionally the author doesn't make allowance for job salary minus the cost of private health being greater than 34K. Not only would this make it the equivalent of a "good job", but it is arguably better because the health insurance is portable, i.e. not tied to staying employed with a company providing health insurance.

  • Dr. T

    You'll be thrilled to know that the Center for Economic and Policy Research that performed this study is a charitable organization formed "to promote democratic debate on the most important economic and social issues that affect people's lives." Apparently, they are setting the stage for the health insurance debates to come. Based on the advisory board names, they are a left-leaning group (what a surprise). The co-directors and the senior economist were each paid $76,369 in 2006. Benefits were not described but undoubtedly included comprehensive health insurance.

  • Mesa Econoguy

    Dr Coyote,

    For once you are wrong. I must point this out. Very politely.

    The basis of this fine journalistic expose is A JOURNALIST SUPERVISOR (since Gannett just fired all of the senior “reporters” and “management” at the AZ Repugnant because their anemic revenue stream is going to hell faster than Eliot Spitzer’s presidential nomination) , WHO HAS AN INHERENTLY SHITTY JOB AND WHO HAS ZERO CLUE ABOUT HOW SHIT WORKS, BECAUSE THEY”RE FUCKING CLUELESS JOURNALISTS, not (only) because they’re lazy, stupid, lethargic, poor writers, and otherwise unobservant peons, but mostly because they are inherently dumb, much like the fire-hose-guy at the Hindenburg.

    Signed,

    The guy who writes better than journalists. As a hobby.

  • Dan

    Mesa,

    Way to unfairly disparage an entire group of people.

    I'm a former journalist and have worked with many reporters over the years who are passionate about their work, dedicated to getting stories correct, understand what they cover and possess fine writing ability. They were not "peons," and they certainly can write far better than you.

    I don't understand why the type of language you use in your post is tolerated by the guy who runs this blog. If you can't express yourself without making sweeping generalizations and using four-letter words, why don't you go back to playing in the sandbox?

  • cesqy

    Wow!! It amazes me how a small business entrepeneur who makes times the wages of at least 70 of his employees defends his companies low pay. Maybe you should move to China and give them the wages you would like to pay them. No environmental, workman's comp, or medical costs to slow down your capitalistic greed. Of course,you deserve your income since you take such big risks and pay such a great living wage to happy employees. I'm sure they tell you the truth of how they feel to your face.

  • Zach

    "Of course,you deserve your income since you take such big risks and pay such a great living wage to happy employees. I'm sure they tell you the truth of how they feel to your face."

    Maybe you missed the part where he has a 200 person wait list, and the part where his employees aren't living off of the wage he pays them (rather, they live off of retirement income).

  • Erica

    There is this whole attitude in society that we have to keep increasing minimum wage so that people can live. But these jobs were never meant to be careers. They are for people like me college or high school students to make some money, or for old people to get out of the house. And yet I have a friend, my age, who has already decided she is going to work at a grocery store for the rest of her life, because that's what her parents did. She could do anything, and she's already chosen to do nothing and struggle for money for the rest of her life. I don't get that. People need to focus on improving thier skills and finding a CAREER, not a JOB that they enjoy. Minimum wage should be a temporary state, not a lifetime thing.