11 August 2010

"unemployed = 21st century draft horse?"

Philip Greenspun's Weblog | unemployed = 21st century draft horse?

The U.S. has 15 million officially unemployed workers and additional tens of millions who aren’t working and aren’t looking for a job. Could these folks be the draft horses of the 21st century?

The cost of a low-skill worker has increased tremendously in the U.S. Let’s look at four kinds of costs:
  • direct payments for wages and payroll taxes
  • health insurance
  • mistakes
  • employment lawsuits
The minimum wage has increased steadily in the U.S. even as the average skill of a high school graduate has fallen. The federal minimum wage was increased in July 24, 2009, 1.5 years into our current economic depression. More important, perhaps, are the heavy increases in payroll taxes over the years, notably for Medicare and Social Security. [...]

Most subtly, and perhaps most significantly, the potential cost of a mistake by an individual worker has skyrocketed. In industrial plants, the link between individual employee action and billions in losses is fairly obvious, e.g., with the Bhopal explosion. A tiny misstep in a chip factory and a wafer containing hundreds of valuable integrated circuits becomes worthless scrap. Computer networks, however, have made the potential costs of a clueless or careless office worker dramatically higher. Suppose that a company hires a low-skill not-very-alert office worker for $10/hour. This person accepts an email invitation to follow a hyperlink. One click later and the company’s network is infected with a virus. Best case: IT department spends $50,000 cleaning up; worst case: customer lists, customer credit cards, and other private data are compromised, costing millions of dollars.

As the government has increased the number of ways in which an employee can sue an employer, the expected cost of litigation from each additional employee has gone up. The cost of trying out a worker who might not work out is much higher than formerly, especially if that worker is older, female, or belongs to a government-recognized minority group. It might be smarter to employ fewer higher skill workers because the chance of litigation is lower with 100 workers than with 200 workers.

Or we can rephrase the entire posting as “How comfortable would you feel working at your present job alongside someone whom you would rate as among the least competent 25 percent from your high school?”
I like the rephrasing best.

There's been much talk of "zero marginal productivity workers" in the last few days, and this ties into that, but I have another reason for thinking this is interesting.

My father told me yesterday that he read a profile of Bradley Manning, who released all that material to Wikileaks. The newspaper profile paints a picture of pretty unreliable and untrustworthy guy. Why did such a person have access to this kind of damaging material?

My first reaction is that, assuming the article is accurate and Manning was noticably a weirdo, the Army is facing the same risks as other employers. A hundred years ago when an anti-social loner knocks on the recruiting depot's door they can always put him to work shoveling shit in Louisana. Now there's a much higher chance that the weirdo is going to be in charge of important or expensive or dangerous stuff.

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