If you think about the labour market and the fact that around 50% of jobs are filled internallyinformally that speaks volumes for how important informal networks are. How much people feel the need for mutual commitment.

I’ve been trying to raise these issues for a fair while. I raised them at a conference which was in fact organised by Brian Howe. But when I mentioned them it was considered impolite. I was blaming the victim.

Even people who were intrigued by the argument couldn’t help but say things like “Well employers are now more loyal, so what do they expect? Perhaps the ‘lemons’ showing no commitment to their work, no ‘bonding instinct’ as it were was just deserts for the employers”.

Of course it’s true that employers aren’t the only ones looking for lemons in the workplace. The new worker is also (if s/he’s got a bit of nous) will be wondering whether their boss is a lemon. Some bastard who’ll work you to death and show no loyalty to reciprocate your own”.

But I think the response to this is twofold.

1. Except in a downturn employers have no interest in sacking a worker or getting them offside – though of course they can be bloody inconsiderate about working hours etc. But that is something one can find out fairly quickly and then bugger off if the boss is bad news.
2. The ‘justice’ of the situation in a private sense is, in my view, secondary to the interests of the employee. In my opinion the employees interests are emphatically in a bit of persistence. One month or at most six should be a good period in which to get an impression of whether the boss is a lemon. If they’re not it’s important to persevere. Because a boss (and certainly me as a boss) is looking for signs of perseverance on which a mutually beneficial relationship can be built. And there are lots of people there (at least regarding the jobs I hire people for) who end up not persevering. That’s hugely against their own interest. It has the by-product that it’s against the interest of all the other people in the labour market.

Peach used to be staffed by receptionists all over the country – all with the flexibility to go pick up their kids or whatever they wanted to do so long as they let us know. But it became impossible and now we use a call centre. We outsource the hassles of sorting through the lemons. So far an Australian call centre has given us good service. It’s in a regional centre and has pretty good retention of staff and they try hard to keep us happy – and generally do a good job. But it probably wouldn’t be very hard to throw the switch offshore.

Regarding the issue you raise specifically, I think employers will often undervalue migrants unless they’re obviously skilled and imported for the purpose of taking up the job. And a lot of migrants are ambitious if not for themselves, their kids, so it makes sense for them to do something self employed. That’s how Australia became the home to some of the best hybrid foods in the world. Souvlakis are a lot yummier in Melbourne than they are in Athens!

Falafel anyone?

Akerlof says that if employers don’t recognise or trust a person’s credentials they are unlikely to hire them in a responsible, well-paid position. So if a high-ability immigrant is unable to get a normal return for their labour as an employee, does it make self-employment relatively more attractive?

BTW my blog is back from the ashes, though in a new format. Comments encouraged!

My ears pricked up when Michael Duffy introduced the Where has all the money gone? because I’ve had my suspicions and kinda wondered about that too. Doubly attentive when I heard your name mentioned. You were interesting to listen to, very cogent. Hope to hear some more from you on good old RN–compulsory listening at the caff.

Here’s a table from the American numbers – comparing the early 70s with the early 2000s. (and sorry about all the code that is getting through onto the display)

Here’s Atkinson and Leigh’s stuff – or rather an extract from it comparing the time at which the top got least (early 1980s) and the early 2000s. Mind you the sustained, suppressed level of profits by the early 1980s suggests (to me anyway) that those low levels are likely to have been difficult to sustain.

I would liked to have known what the actual figures were for Australia, you suggest they’re pretty similar to the US, but with tax breaks and money being given to families with children you’re suggesting that its not as stark as it is in the US. Pretty stark nonetheless I would’ve thought. On a personal level, being childless, single, female and living in a rural area I find it galling to be told that my real income and my job prospects have never been so good–which I have found to be complete hogwash.

I’d be interested to know but doubt that anyone does– if all debts were called in who would be found to own all the money? I think this would give a far truer indication of the real situation. Probably nigh impossible when taking assets into account. What’s an asset? A house with a variable worth, stocks and shares that are subject to nosedive? Superannuation, also subject to movement on the stock exchange. But if you’re $250,000 in debt then you’re $250,000 in the red as far as I can see.

And re lemons. Is it any wonder? Once GM was the biggest employer in the US and they paid above award wages and provided excellent conditions. Walmart have now taken their place, and they pay on average, less than enough to keep people above the poverty line and provide only the most basic legal conditions that they can get away with. As far as I can see ALL employers these days are more likely to model themselves on a Walmart type ideology where they provide only the barest legal minimums and often when scruitinied what they are providing, or not,as the case may be, is illegal.

Sans slavery or a discernible ‘working class’ in countries where we are all aiming for a similar ‘lifestyle’, the system is struggling and will continue to struggle to stand up unless governments like ours simply dish money out to those whose votes they would like to secure. This hardly seems like a rational solution, especially when their statistics about what is actually going on ‘out there’ are so often badly skewed.