Why one shouldn’t employ children

From “The Long Rescue: A man’s search for his kidnapped children”, by Sonia Faleiro, in Harper’s, 2016 June, pp. 58f.

The idea that a child can do an adult’s job is as widely accepted in India as the opposite is believed in the United States: that childhood is a time for play, not toil.

…

If people were forced to hire adults exclusively, however, families would be less poor — and children, as a consequence, less likely to be pressured to work. “Children are poor because their parents don’t have jobs,” Ribhu said. “But their parents don’t have jobs because the jobs are going to children.”

Large-scale information corporations are small-scale employers

From a controversial essay by Harper’s associate editor Jeff Madrick entitled “The Digital Revolution That Wasn’t,” 2014 Jan, p. 12.  This selection from the essay is relatively “safe”. 

The newly dominant information companies are not job producers. In 1955, General Motors employed nearly 600,000 people. Today, in a much larger economy, Google employs fewer than 50,000; eBay employs about 20,000 people in the United States; Facebook, fewer than 6,000. The numbers for Apple, Microsoft, and Amazon — which each employ between 80,000 and 100,000 worldwide — are better, but still small potatoes compared with General Electric or Ford. By one calculation, the development of the iPod created fewer than 14,000 U.S. jobs. Meanwhile, Americans work harder, equipped with devices that allow them to check in while at home, commuting, or on vacation. (We may actually be undercounting hours worked, which would mean productivity is even lower than currently estimated.)

On the “Wage Scar”

From The Economist (http://www.economist.com/node/21528614):

Research from the United States and Britain has found that youth unemployment leaves a “wage scar” that can persist into middle age. The longer the period of unemployment, the bigger the effect. Take two men with the same education, literacy and numeracy scores, places of residence, parents’ education and IQ. If one of them spends a year unemployed before the age of 23, ten years later he can expect to earn 23% less than the other. For women the gap is 16%. The penalty persists, though it shrinks; at 42 it is 12% for women and 15% for men. So far, the current crisis has not led to these long-term periods of youth unemployment rising very much; almost 80% of young people in the OECD who become unemployed are back in work within a year. But that could well change.

The scarring effects are not necessarily restricted to the people who are actually unemployed. An American study shows that young people graduating from college and entering the labour market during the deep recessions of the early 1980s suffered long-term wage scarring. Graduates in unlucky cohorts suffer a wage decline of 6-7% for each percentage-point increase in the overall unemployment rate. The effect diminishes over time, but is still statistically significant 15 years later.

After a period of unemployment, the temptation to take any work at all can be strong. Wage scarring is one of the reasons to think this has lasting effects, and policies designed to minimise youth unemployment may sometimes exacerbate them. Spain, which has developed a scheme for rolling over temporary contracts to provide at least some chances of employment to the young, should pay heed to the experience of Japan in the early 2000s. Young people unemployed for a long time were channelled into “non-regular” jobs where pay was low and opportunities for training and career progression few. Employers seeking new recruits for quality jobs generally preferred fresh graduates (of school or university) over the unemployed or underemployed, leaving a cohort of people with declining long-term job and wage prospects: “youth left behind”, in the words of a recent OECD report. Japan’s “lost decade” workers make up a disproportionate share of depression and stress cases reported by employers.