Why Blame Job Security? Because It's Easier

The New York Times today ran a story about job security. Many economists, so the premise went, assume that the United States is successful at least in part because of employment flexibility. Companies are free to hire and fire as necessary so they can provide labor to the parts of their businesses that can most benefit. The proof was supposed to be growth in this country versus stagnation in Europe and Japan, where workers enjoy a greater amount of protection.

But now, again the writer argues, the Europeans and Japanese are seeing growth while the U.S. economy is slowing. After mentioning various factors, such as cyclical economic forces and modified approaches to maintaining a level of worker security while giving businesses flexibility, the article ends with this statement:

“That is an understanding that perhaps will take root among American economists and policy makers, deprived as they now are of their long-running contention that job security resulted in weak economic growth in Europe and Japan.”

I think it assumes too much. Those who are invested in believing that employee security is bad aren’t going to suddenly change their minds, because they already “know” that it hurts the economy. And given the evidence provided in the article, I don’t think it’s clear that anyone has proven anything yet.

The problem is that people overly simplify mind-numbingly complex systems and then look for black and white answers to questions about those systems. Instead of trying to prove or disprove something, maybe the debaters should spend some time trying to understand and see how answers might look one way at one time and then change at another. Then, when the right/wrong heat comes off a bit, perhaps we can start to discuss other questions, like to what degree should workers continuingly benefit from an economy when often their pain and loss is what fuels the gain for others.