The Idled Young Americans

The Idled Young Americans
nytimes.com

Anyway.

>Average wages are no longer trailing inflation.

And wages as a whole have diverged from productivity since the 70s. That we're happy that wages are once again keeping pace with inflation --another way of saying "well, at least we're no longer losing money"-- is depressing in this context.

>What might help? Easing the parts of the regulatory thicket without societal benefits. Providing public financing for the sorts of early-stage scientific research and physical infrastructure that the private sector often finds unprofitable. Long term, nothing is likely to matter more than improving educational attainment, from preschool through college (which may have started already).

So... we socialize the substantial costs of doing business (infrastructure and research), cut back on "the parts of the regulatory thicket without societal benefits," --whatever that means-- and just keep pumping people through college. Has Leonhardt being paying attention at all?

We already subsidize infrastructure and research costs. Hell, it's become standard policy that no corporation shall break ground anywhere unless the host promises it special favors and decreased (or absolutely no) taxes. Regulations are more industry specific. The big ticket ones however typically revolve around finance and environment. Perhaps we should ask --well, damn near anyone-- how the year 2009 was for them financially. Perhaps we should ask the Chinese just how "without societal benefits" all of those environmental regulations are. And college? We're putting more students through than ever before. And they are predictably finding that, as the number of people with degrees rises, the value placed on their own degree decreases. And what does the hiring company look for? Experience.

>Many business executives and economists also point to immigration policy. Done right, an overhaul could make a difference, many say, by allowing more highly skilled immigrants to enter the country and by making life easier for those immigrants already here. Historically, immigrants have started more than their share of new companies.

AND we need more H-1B's? This guy's a real piece of work. We already have the ability to bring in extraordinary talent. We don't need 50,000 more outsource firm slots.

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Here's the thing: businesses will hire exactly as many employees as they need. No more. Perhaps less, if they can get away with it. And if they run the remaining folks at break-neck pace long enough, that level will become the new "need" level. No amount of policy or regulatory finagling is going to make a lick of difference. By bending over for Corporate America, all you're doing is throwing taxpayer money at them with the vague and unsubstantiated hope that they'll take on a few more employees. This is beyond stupid. As business becomes more automated --not mechanized, automated, as in no human required-- you can expect fewer jobs to remain and for the employment rates to level off or decline.

Low demand on the consumer side has meant that businesses don't need to expand and hire people.

Often times, the conversation revolves around the fact that the software we sell makes the average worker so ridiculously productive that often times they start being able to do the work of two people. They no longer have to spend time searching for important documents or worry about replacing lost/damaged ones, or pushing paper documents from one department to the other, or waiting for a certain supervisor to come back from a business trip so that they can sign off on stuff. For most knowledge workers this translates to at least a couple of hours of productivity gains everyday, if not more.

What do businesses do with these productivity gains? From what we have seen, the overwhelming majority use the opportunity to lay off workers they no longer need. The reason is simple: their company addresses a certain amount of customer demand, and if they can meet that demand with half the workforce then why not lay off the rest and become more profitable?

Over the years, this phenomenon has led me to the conclusion that the main problem with the economy is lack of consumer demand. If consumer demand was increasing, then companies would hire more employees despite the efficiency gains they get from automation. Or, at the very least, they would be less prone to lay people off, because their existing workforce would be more able to handle the demand by becoming more productive.

Traditionally, the main source of consumer demand in America has been the middle-class. If we find a way to bring that back, everybody wins.

Being on the hiring side of things, America needs all the talent it can get. Hiring good software engineers is seriously hard.

Maybe the problem is just connecting people with jobs, but given the low unemployment rate in the tech sector, I really doubt it.

Having to interview 5 candidates before finding one who just knows how malloc works isn't fun.

Indeed, one of our high quality engineers had to be sent back to his home country after his work visa expired, we are hoping to get him in on H-1B, and I believe he got approved, but now we have to sit and wait for government wheels to churn.

America should make it as easy as possible for highly motivated and talented individuals to come here. Jobs, heck, entire new industries will be created.

Isn't that the entire lesson from start-up culture? Get talented highly motivated people together, let them achieve their dreams (with someone who knows business and finances overseeing things!), and the economy will grow.