Churning up bad arguments about job churn

Deputy Secretary of the Treasury Robert M. Kimmitt tries to explain Why Job Churn Is Good:

More than 55 million Americans, or four out of every 10 workers, left their jobs in 2005. And this is good news, because there were over 57 million new hires that same year.

Those workers spent an average of 15 weeks seeking their new job. That means that they spent 15 weeks without insurance, not to mention a salary. One hopes that their new employer offers insurance, and that the insurer doesn't have bizarre rules about preexisting conditions.

It's also worth remembering that the United States is growing by about 2.75 million per year. By Kimmit's own numbers, we are generating three quarters of a million fewer new jobs than new Americans per year. Swell news.

Kimmit starts off talking about people who leave one job to get a new one. While there's something to be said for employer/employee loyalty and promotion from within, there's no argument against people looking for a better job. But the Deputy Secretary writes "Unfortunately, what usually makes headlines is a big company's layoff of workers." That's a very different situation from the "millions of Americans [who] leave their jobs -- most of them voluntarily."

Workers laid off are often in manufacturing or specialized technical jobs, and the skills of an assembly line worker or a Sprint operator are not generally applicable to the jobs that stay in a community after a large layoff. The new jobs that are created are not the sort of jobs that people are being forced out of.

Kimmit's response? "Americans seeking to make job changes have a resource not found elsewhere in the world: our nation's community college system, which provides higher education and the chance for workers to retrain at a relatively minimal cost after they enter the workforce."

And community colleges are certainly great. But a 40 year-old man with two kids in school should not have to go back to school to get a new job after his factory moves overseas, nor when his call center gets outsourced.

On the long term, globalization probably will produce a better world. But ignoring the devastation and inequities it produces meanwhile is irresponsible.

Especially as health care moves squarely to center stage, and many states are recognizing and moving past the employer-based health insurance system, it is absurd to write about switching jobs without even discussing the effects this has on insurance for workers and their families, as well as the patchwork job-hopping makes of pensions and retirement insurance.

It used to be that Social Security was one of three legs of retirement funding, along with personal savings and employer-funded pensions. As job tenure declines, the latter becomes harder to maintain, and we all know that the savings rate is atrocious. Similarly, employer-based insurance generates a long-term risk pool, allowing premiums to remain steadier. Rapid changes in employment mean rapid flux not just through offices, but through that risk pool. That raises administrative costs for insurers, and introduces greater variability into premiums.