More on Recession Proof Jobs

Many economists have warned of continued unemployment — an economic indicator that always lags even as the economy rebounds and returns to growth.

With that in mind let’s again focus on what employment opportunities are out there. Particularly those positions that are likely to be recession proof.

For instance, many of Western New York’s largest accounting firms are sticking with their plans to hire new college graduates. While other sectors of the marketplace cut back on new hires, NY area CPA firms are tending to honor offers made last fall to college seniors.

Additionally as more and more companies look to social networks to promote their brands, they are hiring staff who can head these efforts. New positions are opening up in companies dedicated to social network marketing — social media experts who can build relationships and find customers on sites such as Twitter and Facebook.

Construction companies that have received contracts for projects funded by the economic stimulus bill are beginning to hire new workers or rehire laid-off employees, according to Associated General Contractors of America (AGC).

“Early reports indicate that the infrastructure piece of the stimulus is beginning to do exactly what was intended, put construction workers back on the job,” said AGC Chief Economist Ken Simonson. Simonson also reported that other contractors are canceling planned layoffs because of stimulus-funded contracts.

Tampa General Hospital has doubled the number of pharmacists on its staff since 2001 and is looking for more. There’s a continuing shortage of pharmacists nationwide, and Florida, with its above-average number of senior citizens, ranks among the states most in need of professionals who dispense medications. The Florida Agency for Workforce Innovation has projected employment in the field of pharmacy to grow by 23 percent between 2008 and 2016.

Staffing firms around Albuquerque, NM are reporting that after a tough first quarter, the downturn shows signs of bottoming out, with hints of a rebound in the past few weeks. The firms are particularly seeing hiring demand return in professional fields, such as accounting and information technology.

Health Payment Systems Inc., a three-year-old health care billing firm in Milwaukee, also is looking for more workers. “We’ve been hiring people on a regular basis for the past three or four months and we are currently adding jobs,” said Bruce Lefco, the firm’s CEO. The firm is looking to fill openings in customer service, billing and information technology.

Despite the news of job losses and unemployment numbers, there is indeed strong employment opportunity in selected parts of this economy. In fact several industry segments have actually continued to add jobs throughout this whole recession. Indeed the jobs data shows bright spots — expanding industries that promise new, stable career opportunities.

How the Minimum Wage Benefits Corporations at the Expense of Workers

If there is a silver lining to the dark clouds on Wall Street, it’s that people are finally waking up to the realization that something is fundamentally wrong with the U.S. economy. Unfortunately, most citizens accept long-refuted economic myths and, thus, incorrectly prescribe more government to cure a problem caused by too much government. Students of the Austrian school of economics know that government intervention into the economy—regulation—almost always has the opposite of its intended effect. A good case study for this is the minimum wage.

The federal minimum wage was $5.15 per hour from September 1, 1997 to July 24, 2007. Thanks to the money-supply expansion of the Federal Reserve, the purchasing power of that $5.15 dwindled to $3.99 over the ten-year period, meaning that minimum-wage workers received a 23% pay-cut in real terms, even as their nominal wages remained the same.

The Minimum Wage in Action Encourages Inaction

Obviously, a person earning $5.15 an hour for the standard 40 hours per week—$206 before taxes—could not afford to support a family. This was one of the arguments for raising the minimum wage to $6.55 (it will go up to $7.25 by 2014). But are all wage earners supposed to be able to raise families on their income?

Consider the single person, fresh out of high school, who has no interest in college. In fact, he has no interest in leaving his parental abode, where Mom does the laundry and Dad pays the cable bill. He wants as much money as he can get for his labor, of course, but he has no need to support a family. And since he’s a bit of a slacker and not all that bright, he doesn’t have the skills to merit $6.55 (plus payroll taxes, workers’ compensation, unemployment insurance, etc.) in hourly pay. In order to find employment, he’ll have to stumble upon someone willing to pay him more than he’s worth.

Maybe our slacker could add $5 per hour of marginal utility as the third worker at a donut shop—marginal utility tends to decrease as the number of employees increases. The slacker would be happy to work ten or 12 hours a week at this rate, which would allow him to buy a new video game every Tuesday. But the donut-shopkeeper cannot afford to pay him $6.55, which would result in a loss of $1.55 an hour for every hour the slacker worked, so as a result, the slacker continues to mooch off Mom and Dad, never getting a chance to build up the work experience that could lead to better jobs in the future—and a new outlook on life.

Free Market vs. Government: How Wages Are Set

Employees are generally paid based on the amount of profit their work contributes to their employer’s bottom line. After all, in a competitive job market, employers are incentivized to pay as much as they can afford to in order to attract the best workers. Government regulation, however, leads to diminished competition between employers and more competition between employees. Regulation, including the minimum wage, is what pushes wages down.

For example, imagine the government set the minimum wage at $25 per hour. Some people in the $20-$24 range would get a pay boost, but people earning much less than $25 would undoubtedly be let go. After all, if they were really adding more than $25 of hourly utility to their employer, they’d be making more than $8, $10, or even $15 an hour.

In this scenario, unemployment would be very high, and thus jobs would be extraordinarily scarce. Thus, instead of employers competing for employees, job-seekers would be fighting one another for jobs. This would push wages down, not up, and healthcare and other fringe benefits would unquestionably be cut.

The $25 scenario might be seen as a little extreme, but the principle holds: when you mandate a minimum wage, workers whose labor contributes significantly less than that wage to the company’s well-being will be fired, and the scarcity of the remaining jobs will lead to greater competition among employees, not employers. And far from hurting only “slackers,” minimum-wage laws hurt the most vulnerable members of society.

How the Minimum Wage Promotes Crime

Consider this: when people are priced out of the job market, what do they do? They can turn to a life of government dependency on welfare, or perhaps, in an effort to preserve their dignity, they can turn to crime. Yes, crime can be honorable in the interventionist state. After all, anyone who works for less than the minimum wage is by definition a criminal, as is their employer. But too many people, who would otherwise be productive workers in the “overground” economy, do turn to lives of actual violent crime when they have nowhere else to turn.

Poor people in the inner city are most susceptible to these deleterious effects of the minimum wage. Employers want work experience, which is impossible to get if you never have a first job. And you can’t get a first job when your marginal utility is less than the minimum wage. In the old days, people could agree to work for initially low wages to get their feet in the door, but this is illegal now. And even worse yet, inner-city entrepreneurs, who could better their impoverished communities by providing jobs, are stifled by the minimum wage and other regulatory red tape.

Who is the Minimum Wage Good For?

One common critique of raising the minimum wage—that it causes inflation—is 100% false. Only expansion of the money supply can cause inflation, and raising wages does not produce more money—only the Federal Reserve can do that. However, this inaccurate criticism is actually worthy of consideration because, if the minimum wage did cause inflation, it would actually be less destructive than it is. For if it simply caused prices to rise throughout the economy, then employers would be more easily able to afford the higher wages. The truth is, it doesn’t, and they can’t.

So the minimum wage is clearly bad for workers and entrepreneurs and good for the government, which expands its sphere of influence as more citizens turn to welfare and criminality. But left-liberals should also note that, by tightening the labor market, the minimum wage benefits large corporations, too. After all, why do you think Wal-Mart supported the most recent minimum-wage hike?