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Job Creation

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Reader William Eilberg writes in response to this post [2]:

As I read your piece, I couldn’t help thinking about the states of New Jersey and Oregon, which prohibit motorists from pumping their own gas, even when the latest automated gasoline-dispensing equipment has been installed.  Last summer, as we were driving through Oregon, I cringed each time I saw able-bodied, competent young people doing jobs, at gas stations, that were totally unnecessary, jobs that existed solely due to legislative fiat.  A society that compels its citizens to reject technological advances, in the interest of "saving" jobs, is a society that dooms itself to poverty.

Perhaps Oregon should make it a crime to make a direct-dialed long-distance call.  That would certainly increase the demand for telephone operators.  And maybe a ban on word processors would make more work for secretaries.  The list could go on indefinitely.

I visited Oregon, for the first time, when I was 14, in 1965, and long before I had ever given any thought to the virtues of the free market.  I remember touring the state capitol, and was astounded to see a man, obviously a state employee, holding the job of elevator operator, in a fully automated elevator.  That is, his job was simply to push the buttons.  This is what they must have called a prudent use of taxpayer dollars.

William’s example of the ban on self-serve gasoline reminds me of a story. An economist is visiting China and is given a economic tour of the country. At one point, he’s shown a dam under construction and the economist asks why all the workers are using shovels instead of more powerful equipment. It creates jobs, the Chinese guide says proudly. The economist responds: why don’t you have them use spoons?

The first time I heard this story, the economist was Milton Friedman. Before I interviewed Milton last summer, I asked his long-time assistant, Gloria Valentine, if she had heard the story. She hadn’t, she said, and moreover, she doubted it was true. She didn’t think Milton would ever say anything that rude to a host. I also asked Milton and he denied it as well.

But it’s a good story even if it isn’t true. Opposing technology or trade in the name of preserving jobs is the road to poverty.

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