Reynolds: Comments regarding problems with measuring turbulence among firms are correct, but that doesn't mean that doing so may not have some real value conceptually. Approximate answers to important questions may have some value compared with precise answers to trivial questions.
Gendron: Let's expand the discussion of job security to include the nature of work itself. We've heard much in the past year or two, particularly from the secretary of labor, about all the "bad" jobs being created in the United States, mostly in the service sector and mostly, we're told, in small companies.
What's your definition of a "bad" job? Since bad is a relative term, what's your definition of a "good" job?
Reynolds: Most of the job comparisons between small and large firms are unable to show that jobs in small firms are -- as a rule -- societally unacceptable. While they do show that some features, like pay, benefits, and tenure, of jobs in large firms are more desirable, they do not suggest that rational adults should, for their own good, be prevented from working for a small firm.
The problem in defining a good versus a bad job comes from the wide range of perspectives of those doing the work. Some workers may consider a job acceptable even if it is dull and demeaning because the pay and benefits are high enough to offset these problems. They are satisfied given the alternatives. Others may find a job with much risk and few benefits quite satisfactory because it offers challenge and potential for great rewards -- psychic and material.
From society's perspective, good jobs minimize the possibility that individuals will try to violently overthrow the status quo, and they allow for adaptation and change in the system.
I have been teaching a course on entrepreneurship research to part-time M.B.A. students for the past three years. Each class has about 25 young adults who hold full-time management positions. When we get to the discussion of firm survival, I ask the students to indicate whether they expect to have the same employer and the same job five years in the future. Much to my astonishment, virtually no one says yes, although a minority -- 10% to 20% -- say they are not sure; most students -- 80% to 90% -- unequivocally say no. Very anecdotal but dramatic evidence that norms about "good" jobs may be changing at a conservative school -- Jesuit Marquette -- in a conservative region -- Milwaukee.
Acs: For me a bad job is one that does not pay enough to move above the poverty line ($10,000 to $15,000 a year for a family of four), does not pay benefits, and offers little job security. A good job is one that pays a living wage ($30,000 a year with benefits) and carries some amount of job security.
Gendron: Assuming you can meaningfully define a bad job in the first place, is it accurate to say that the proportion of bad jobs is increasing? How do we know this?
Acs: It's not that the number of bad jobs is increasing but that good jobs that do not require a high level of education and skill are becoming harder and harder to find.
Davis: Zoltan makes an important point that I would like to amplify. Over the past 20 years, and especially since 1980, the opportunities for someone with a high school education or less to obtain a well-paying job have greatly diminished. Economic data show a sharp drop in wages for less-educated males, a finding confirmed in numerous studies and now widely recognized by academic researchers.
The data for the 1980s also show a decline in consumer spending among households headed by less-educated men, still another sign that this portion of the population has been experiencing a lower standard of living.
Reynolds: In the sense that a larger share of jobs do not provide full-time work, full health and retirement benefits, guaranteed employment for the duration of an individual's work career, and fulfilling work, the proportion of unacceptable jobs may have increased in the past 20 years.
Gendron: If the system is creating more "unacceptable" jobs now than in the past, why is this happening and what, if anything, can we -- policy makers, that is -- do to encourage the creation of more good jobs?
Reynolds: One appropriate role for local, state, and federal governments would be to enact regulations that prevent the creation of unacceptable jobs. Beyond this, the most important thing to do about bad jobs may be to separate the provision of health and retirement benefits from the job itself. Some cooperative mechanism could provide minimal health and retirement benefits to all individuals; this would be a second role for governments. Guaranteed access to health care and retirement programs would allow individuals to focus on finding fulfilling work instead of being forced to take a job just because it offers desirable benefits.
Constant churning and turbulence in the economy suggest another appropriate role for government: to help individuals and firms make the transition from one set of job requirements -- skills, training, and information requirements -- to another.
NEWS FROM THE SMALL BUSINESS ADMINISTRATION:
How to Read Between the Lines
George Gendron: [Below] is a news item that appeared in the December 1994 edition of the Small Business Advocate, published by the SBA's Office of Advocacy.
What, if anything, does this item tell us that is meaningful and trustworthy about what was happening in the economy during the period in question? Does it tell us anything? Would we need to know more even to evaluate its contents? If so, what information would we need that we're not given?
