Job creation is a misguided public policy goal and politician ruse to hoodwink the electorate. The alternative and more pragmatic goal should be to enhance country competitiveness and efficient productivity. Its lowering cost (and prices) of goods and services that matter and it is unlikely to be achieved by having a huge head count. Labour is a semi-avoidable cost of production.
By Brian Sedze
Economist Richard McKenzie in a 1992 Wall Street Journal op-ed title Help the Economy: Destroy Some Jobs featured last August on CD, criticised the misguided obsession with what he referred to as “jobism” — the modern public-policy philosophy that mistakenly focuses on the number of jobs as being the “key measure of a country’s economic success or failure”.
I think the obsession with job creation, instead of economic efficiency and competitiveness, is a favoured Zimbabwean political ruse, a lie and often an outright deception. Modernisation, robotics, artificial intelligence (AI) and retooling will destroy rather than create jobs and, on the other side of the dichotomy, it will enhance national competitiveness. It’s the later that should be the economic public policy focus.
Unfortunately, in this electioneering period of lies and deception, job creation will feature prominently as a promise. The present economic trajectory of the “new era” government and its “bullet train” competitor, the industries of focus for the country, remain the same archaic industries which the country lost competitiveness ages ago. The focus on the old will actually destroy rather than create jobs due to the need for more automation, AI, robotics and modernisation. Not even one of the two leading political parties seems competent to think of new industries that leverage on a country’s comparative and competitive advantages.
To make the ruse even a greater tragedy is for us to acknowledge that our present graduates, with the exception of a very few, are not equipped for the promised new trajectory of retooling, AI, robotics and modernisation. The myriad delinquent ministers of Higher and Tertiary Education just dished out degrees and diplomas like confetti, most of them with not so much value in enhancing productivity or to fit alternative industry growth.
The job promises, as it is, may create the few jobs for our Diaspora community who have learnt the best practices, processes, systems, structures, strategies and new technologies in more functioning economies. There is some hope, but not much though, for Zimbabwe-domiciled graduates, most of them with archaic and economically irrelevant qualifications.
Job creation (and protection) is a favoured goal of our leaders because it appeals to existing political interests and is seductively misleading and counterproductive. It is also one of the easiest goals to achieve. To create or protect jobs, all we have to do is to obstruct progress and kill or retard opportunities for competitiveness and entrepreneurial spirit.
For example, if we outlaw the tractor and modern farm equipment tomorrow, it would create a lot of new farming jobs. This will fit in the Agriculture ministers’ million jobs promised on the backdrop of just three agriculture policy initiatives. If we outlaw robotics and other advanced manufacturing processes tomorrow, it would create new factory jobs.
If we ban all imports tomorrow, it would create lots of jobs in manufacturing, farming, and transportation industries. Statutory Instrument 64 of 2016 had some measured success on that.
If we ban power tools and modern equipment for road building and construction, it would create thousands of new jobs. The late Shuvai Mahofa promised 300 000 jobs for Zanu PF youths.
We can create any number of jobs in having people dig holes and fill them up again.
The fundamental flaw of “jobism” that McKenzie pointed out that makes “jobism” a misguided public policy goal is that it treats jobs as a benefit when jobs are, in fact, a cost or price of production and, ultimately, of consumption.
Jobism also fails to properly recognise that economic competitiveness and progress requires widespread job destruction. Further, job losses should be treated as a measure of great success, not failure, when an industry like agriculture or manufacturing dramatically improves its productivity and is able to produce greater and greater levels of output over time with fewer and fewer workers.
Although he didn’t use the term “jobism,” here’s how Milton Friedman explained in a 1980 lecture how jobs are a price (not a benefit) and why the appropriate national economic objective is to have the fewest, not the most, jobs:
Public discourse tends to be carried out in terms of jobs, as if a great objective was to create jobs. Now that’s not our objective at all. There’s no problem about creating jobs. We can create any number of jobs in having people dig holes and fill them up again. Do we want jobs like that? No.
Jobs are a price and we have to work to live. Whereas if you listen to the terminology you would think that we live to work. Now some of us do. There are workaholics just like there are alcoholics and some of us do live to work.
But in the main, what we want is not jobs, but productive jobs. We want jobs that will be able to produce the goods and services that we consume at a minimum expenditure of effort. In a way, the appropriate national objective is to have the fewest possible jobs.That is to say, the least amount of work for the greatest amount of products.
And more recently, Don Boudreaux making a similar point that jobs are a cost rather than a benefit, and why the economic goal should be to minimise, not maximise, the number of jobs required to produce output in an industry like pharmaceuticals.
Increased innovations generated by any industry are indeed important and unquestionably beneficial to humankind, the fact that many high-skilled people are employed to generate these innovations is a cost, not a benefit. It’s a cost worth incurring. But it’s a cost nevertheless.
If those same innovations could be generated with fewer high-skilled workers, humankind would be even better off. We would have an undiminished flow of innovations from industry plus whatever innovations and products would be produced by the workers who would — but for the fact that they now work in some industries — be working in other industries.
Bottom Line: Because the philosophy of “jobism” is fundamentally flawed, deficient and misguided because it treats jobs as an economic benefit rather than as an economic cost, the public policies based on “jobism” and efforts to create/save jobs (e.g. tariffs, protectionism, tax breaks/incentives to save/create jobs, etc.) are destined to make our economy worse off (and weak), not better off (and great).