That is how Tyler Cowen describes Obama’s idea to make it illegal for companies (with more than 15 employees) to refuse to hire job applicants on the basis of their being unemployed. I agree with Cowen (I’m assuming he’s being a bit hyperbolic — something like “Obama’s worst idea since becoming president” would have been more accurate).
From the article:
White House officials see discrimination against the unemployed as a serious problem. In a radio interview last month, Mr. Obama said such discrimination made “absolutely no sense,” especially at a time when many people, through no fault of their own, had been laid off.
It is hard to both be original and critique Obama at the same time in this case. But the bottom line is that, if Obama were right, and if “such discrimination made ‘absolutely no sense,'” then, surely, the fact of its making “absolutely no sense” would be a far more powerful disincentive to use discrimination than Obama’s law prohibiting it. Only irrational employers engage in practices that make “absolutely no sense,” and, thanks to our system of capitalism, these irrational employers would be easily outcompeted by their rational counterparts. So why bother with the law?
Additionally, this law is, in my opinion, quite likely to make it harder for the unemployed to find work. An employer can’t be sued for just throwing out an unemployed person’s resume, so that’s what a rational employer who is a bit disinclined towards the unemployed will do. Without the law, at least the unemployed person might have gotten an interview.
Maybe Obama believes that it does make sense for employers to discriminate against the unemployed, but that the sense it makes is outweighed by the long-term harm done to the unemployed by this practice (the article describes the fear that there could become “a class of people who could be left behind as the economy recovers”). If he thinks that, he should say that, rather than saying exactly the opposite (that it makes “absolutely no sense.”) But his proposal would still self-defeating for the reason described in my previous paragraph, and in any case ill-advised because it is such a ridiculous encroachment on employment freedoms that it, in my opinion, would not be the right move even if it were good for the economy.
Your desire to see politicians–or anyone for that matter–always say exactly what they think or believe is somewhat unrealistic, perhaps naive, don’t you think?
Whether politicians cannot be “realistically” relied upon to tell us the truth rather than lies is a very different question from whether they should tell us the truth rather than lies. No matter what kind of data you can point to showing how prevalent lying is among politicians, this blog will continue to shame the politicians who continue to do it!
How is this different from a law forbidding discriminatory hiring practices which disproportionately reject women or racial minorities? Do you oppose those laws as well? Why? Same reason?
Do you think antidiscrimination laws were once necessary and have now served their purpose and are no longer needed, or do you think they were never net beneficial?
First of all, Julian, do you agree or disagree with Obama that biasing your hiring towards employed people makes “absolutely no sense?”
To answer your question, the key difference is that with discrimination against minorities, we happen to know that people do in fact sometimes have irrational biases against such groups, due to the history of relations between races in the U.S. There is no evidence at all that I am aware of that suggests that people would ever discriminate against unemployed people for any reason other than the obvious (and rational) one, which is that such people are, all else equal, not as likely to be as good at their jobs as employed people.
I’m fairly certain that there is an irrational bias against the unemployed, as well as those without college degrees. At least, I’d say that the bias is roughly as rational as the one against minorities. It’s in the interest of individual firms to discriminate but the market as a whole suffers from underutilized human capital. It’s OK to hire someone who is employed with a college degree because if they turn out to be a lemon you can have the excuse that there were no “red flags”, try the same with an unemployed person and you’re screwed. This is the problem.
Riley – you’re last 2 sentences suggest that the bias is rational, whereas the 1st several sentences indicate the bias is irrational.
I agree with you; “There is no evidence at all that I am aware of that suggests that people would ever discriminate against unemployed people for any reason other than the obvious (and rational) one, which is that such people are, all else equal, not as likely to be as good at their jobs as employed people.” I do think that when a person is unemployed it makes it difficult for him or her to be hired because they are unlikely to be as good at their job and therefore that person has a handicap. However, I agree with you the law and others like it encroach on freedom. With so many laws like this people get in the habit of devising methods to go around the law. They lose respect for laws and therefore I agree with you, this law is self defeating. Clover