In the one car trip I made over the past week, I passed by a sign proclaiming, “A Hero Lives Here.” I don’t know who it was, or what occupation they may be engaged in. Perhaps it was someone in the health-care sector, a police officer or a grocery store clerk. These are all folks we believe provide an essential service. Still, I confess that in my 21 years as an economics professor, I’d never once considered the idea of there being anything like a distinction between “essential” or “non-essential” worker.
True, during these trying times, such a distinction is useful in helping guide who should remain at home during the pandemic, but even that won’t quite do justice to the idea. After all, there are many people today doing important work from home. These may be mayors, teachers or epidemiologists. In normal times, there is no such division as “essential” or “non-essential” workers. That truth has important lessons for today.
We might suppose that some jobs are more important to the economy than others, but I’m not sure that’s true. There are clearly wage differences between occupations, but wages don’t reflect what importance.
Workers choose to supply their labor based on thoughtful personal calculus. They consider the risk of the job, the time away from family, the enjoyment of the tasks and even such esoteric matters as the pleasantness of a boss. But neither employers nor employees knows with certainty how much they are worth to one another or what the alternatives might be. These uncertainties sustain a constant churning of labor markets as workers try new jobs in new places.
Many jobs come with non-pecuniary benefits that compensate for the pay and working conditions. The military is the clearest example of that. At no rank is the pay equal to that of a civilian with similar duties, and combat pay is an extra $7.50 a day. It’s a sure bet that something more than pay attracts young women and men into the service. The same is true of many government occupations, where the pay is low but respect and job satisfaction are high. Think of school teachers or police officers.
At the other end of the spectrum are professional athletes and entertainers, whose earnings may be astronomical to play a game or sing a tune. These folks earn more because they are very good at their profession and technology enables everyone to consume their services.
Pay clearly isn’t a determinant of the essential nature of a job.
Many of us might be tempted to make that distinction based on what we think we need to buy, but that won’t do either. Most of what we consume during this shelter-in-place is not essential to sustain life. Most of us are healthy and do not need medical services. If we were honest with ourselves, most of our trips to the grocery are motivated not from hunger, but from a desire to avoid eating that 2016 can of Spam with a side of ramen noodles from the shelf. And it is an unavoidable truth that we can live without Netflix, wine or hair coloring.
All this means that the definition of an essential job is one that someone else is willing to pay for. What we are discovering these days is that many jobs we think are essential are performed by workers who are compensated little for their efforts. Low-wage workers in nursing homes, food processing factories and grocery stores are three examples.
If we possess lasting memories of our current troubles, there will likely be stronger calls for a higher national minimum wage. I wish the challenges of boosting earnings for low-wage workers was that easy.
What we should do is use this opportunity to revisit a broad set of policies that affect low-wage workers. We must ask ourselves a number of questions. Can we do a better job of making them more productive through K-12 schooling? Could we better connect business tax incentives to wages and working conditions? Should we re-focus our workforce development programs toward workers instead of employers?
If we are lucky, our current troubles will have a more lasting influence on many jobs. Maybe employers will feel a bit more anxious about keeping these workers employed. Maybe we’ll see a new type of labor movement replacing the failed models of the past. I doubt we’ll have parades for nursing home staff, grocery store clerks or chicken factory workers when this is over, but maybe we’ll be just a bit more respectful of those who do that work.
Michael Hicks is the George and Frances Ball Distinguished Professor of Economics and the director of the Center for Business and Economic Research at Ball State University. His column appears in Indiana newspapers.
