Slowing Progress in the Name of Jobs

Intelligence simply laughs at the notion. And yet, it is a concept that is becoming more and more popular among Americans. It is the idea that we must impede progress in order to save, or even create, jobs.

It sounds ridiculous. It is ridiculous. But the idea grows with unemployment. It’s understandable. People who are more concerned about the individual than economic progress see simply that unemployment numbers are rising. People are losing jobs, and thus are suffering. Steps must be taken to stop the loss of jobs and create jobs for those who have lost their jobs already.

The interesting thing is that, in order to save or create jobs immediately, long-term progress is necessarily damaged.

Let’s use a couple of contemporary examples. The American auto industry is collapsing because their high costs, inefficient process, and unreasonable employee benefits have destroyed the profit margin in their auto sales. They are unable to raise prices (which is good for the consumer) because their domestic competitors have good profit margins on their sales at the current prices.

So what are the options? Option 1 is to do nothing. One possible result of this is that the company restructures out of necessity, streamlines their operation, and becomes competitive, thus saving most jobs, although probably losing some. The second possible result is that the company is unable to recover, and goes out of business. Jobs are lost, and unemployment spikes.

The second option is to try to level the competition by giving them an unfair advantage. This could be done by price fixing, unjustly burdening the successful companies to level the playing field, or giving the failing company a handout that is not given to other competing companies. This favoritism will save the jobs of those employed at that company, but it destroys the progress of that industry.

It is argued that maintaining level competition promotes innovation and efficiency. The logic makes sense at first look, but is fatally and fundamentally flawed. The flaw is in the word maintaining. Where is the incentive of hard work and innovation if your business is protected from being defeated? Why would an Olympian push his or her limits if they were all given a gold medal? And why would a company seek to gain a competitive advantage if, by doing so, they are burdened by legislation to nullify that advantage?

In the first option, jobs are lost, but those jobs were inefficient jobs. The man-hours were not optimized, and therefore they can and should be used more productively elsewhere. Imagine if, in order to protect the jobs of coachmen and coach makers, the new automobile technology was squashed by legislation. Imagine if, in order to protect paper companies, computers were price fixed out of existence.

If my engineering job was outsourced to India, would that be fair to me? Should we not protect our jobs from being outsourced? If someone else can do the same job as I can for a much cheaper price, regardless of where, would it be fair to force people to pay my overpriced wages for my services in order to protect me from unemployment? What does that do to the consumer of those services? Is it not more unfair to the consumer that has to pay for the overpriced service? Would they not be able to produce more if they did not waste their funds on my overpriced salary? Isn’t their business impeded by any protection of my job? So who is more important?

It is businesses that produce jobs. Jobs don’t produce businesses. If a business becomes successful and grows, jobs are created. If a business is hampered and fails, jobs are lost. Thus we must protect businesses, not the employees (except from improper professional conduct). I hate hearing the governments steps toward empowering the unions. Union power is the demise of business. And if a union’s business fails, they have no power and no job.
If a business is not paying you your market value, leave. Find a new job. Your market value is what businesses are willing to pay for your work. If you can’t find another job, your market value is probably less than you thought. If your service has dropped in demand, must we force people to pay for it? Do we make people pay for something they don’t want? Or should you learn a new skill that is higher in demand?

You are responsible for your own market value. If you want to be worth more, make yourself worth more. It’s not anyone else’s duty nor right to artificially set your market value. Price fixing has never ended well. Ever.