The skills needed for unskilled work

Again via Maggie's Farm, the experience of a California employer with a business model built on unskilled labor.
I am not an economist, I am a business school grad. We don't worry about explaining structural imbalances so much as look for the profitable opportunities they might present. So a question we business folks might ask instead is: If there are so many under-employed unskilled workers rattling around in the economy, why aren't entrepreneurs crafting business models to exploit this fact?
. . . .
The reason for my despair comes from a single source: the government is making it increasingly difficult and costly to hire unskilled workers, while simultaneously creating a culture among new workers that short-circuits their ability to make progress.
It would be nice to say that the things "government" is doing along these lines are confined to California, and they're certainly at the absurd end of the spectrum there, but the rot has spread.

1 comment:

Grim said...

Good piece.
"...someone asked me what my biggest accomplishment had been over the prior year. I told them it was probably getting the company down from hundreds of full-time workers to less than 50, converting everyone to part-time. And it was a huge effort, involving new systems and a number of capital investments to accommodate more staff working fewer hours. And it had a huge payout, saving us hundreds of thousands of dollars a year in Obamacare penalties and compliance costs. But come on! How depressing is it that my biggest business accomplishment was not growing the business or coming up with a new customer service but in cutting the working hours for good employees? But that is the reality of trying to run a service business today. The business couldn't be profitable until we'd adjusted our practices to these new regulations, so there was no point in even thinking about growth until we had done so...

"Uber and Lyft are very very careful to define themselves and their service in a way that all those drivers don't work for them. I would go so far to say that if Uber were forced to actually put all of those drivers on their payroll, and deal with they myriad of labor compliance issues, their model would fall apart."