Sunday, November 18, 2007

Only chaos is sustainable

I happened to be reading this article* on the effect of the minimum wage at the same time I was reading Off the Books,: The Underground Economy of the Urban Poor. I'll leave discussion of the book as a whole to more qualified folks^, but those two sources, plus a pattern of posts in academic blogs, have helped me cement some thoughts on job having and finding. Specifically: dynamic equilibrium is good, static equilibrium is another word for decay.

For those who haven't taken chemistry in a while: equilibrium means quantitative measures are staying constant- for example, x% of the salt has dissolved in the water. Stable equilibrium is probably closer to what people think of when they mean "stay the same": each molecule is in the same state forever. Dynamic equilibrium means that the overall picture doesn't change- there's still x% of the salt dissolved- but an individual salt molecule may go from dissolved to undissolved hundreds of time.

Now let me use an analogy that doesn't make you wince or fall asleep at your desk, plus fits my point better: the medieval European cathedrals were built out of stone, and more or less didn't need maintenance- they were at a stable equilibrium. Meanwhile, over in Japan, there wasn't enough stone, so they built temples out of wood, which constantly rotted and needed to be replaced. For the century or so, stone looked more stable. But after several hundred years, even stone gets run down. But by that point, no one knew how to build castles. Meanwhile, the constant need for repair meant that temple-maintenance and building skills were alive and well in Japan. My feeling is that only dynamic equilibrium is truly indefinitely maintainable.

How does this relate to job searching? Suppose your goal is to maximize the time you're employed and minimize the time you're unemployed. There are two ways to do this: minimize the time between leaving one job and starting another, and minimize the number of these transition times. So for a given risk tolerance, the longer it takes to find a job, the less likely you are to leave your current one.* Several things affect the time to find a job, but by far the biggest one is the number of appropriate openings in a given time period, relative to the number of people applying to them. Unfortunately, there's a vicious cycle in which the longer it takes to find a new job, the longer people stay in their old jobs.

This would be fine, if everyone was already in their optimal job, but until we implement stable matching, and keep all parties involved from ever changing, that's not going to happen. The best thing for everyone would be to make switching jobs relatively easy and stigma free.

Programmers have this easier than most, because demand outstrips supply, and if you choose your location well you don't have to uproot your life to change jobs. And any occupation in which you freelance has the same benefits. Off the Books discusses how works in the ghetto shorten their inter-job time by having incredible flexibility as to what jobs they do. On the other end of the spectrum are academics, who have months between applying to a job and getting a decision, a huge pool of applicants, and a very small pool of appropriate jobs. And even in good job markets, highly senior people can take a long time to find a job, because churn is slow. My friend's dad is a highly skilled lawyer, but he's place bound in an area without a concentration of appropriate jobs, and it's taking him forever to find something.

In slow-churn areas like liberal art academics, a little bit of discrimination can fuck up someone's entire life. In high churn areas, it might hurt them for a couple of months. High churn areas are a lot more amenable to leaving the workforce for a few years for kids, then popping back in.
It's also a lot easier to coordinate jobs with a spouse if you both can work anywhere relatively quickly (or for that matter, move back to your home town to take care of an ailing parent).

That said, there's not much an individual job seeker can do about this, except choose a quick-turnaround field, so this isn't really helpful in any sense of the word. I just find it interesting.

*I include it for completeness, but it's not the best I've read on the subject, and goes against prevailing consensus.

^Okay, a few comments. 1. Venkates desperately needed a co-author and/or heroic editor. It's incredibly interesting data, but not particularly well presented 2. Like other books I've read on the sociology of poverty in America (which, okay, is one), this one leaves out related phenomena that seem incredibly relevant to me, and it seems to me that they're leaving out data that would make their subjects look bad. In Off the Books, it's welfare. Aside from explaining that one woman wasn't eligible due to past fraud, and a passing mention of food stamps while talking about facilitators, he doesn't touch on welfare at all, and I have to assume that welfare has a huge effect on an urban poor economy.

*My points hold for job searching while employed, but take longer to explain.

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