Taking in each other’s laundry

Walter Russell Mead believes the future of employment lies in "value-added intermediation”:

There is much more room for growth in non-traded services than people think. Last spring Matt Yglesias had an important post that offered a glimpse of the promised land.

In "The Yoga Instructor Economy” Yglesias pointed out that there will be a rising demand for personal services that can’t be outsourced.  Dinners in fancy restaurants are more labor-intensive than burgers at McDonald’s.  Yglesias continues:

Artisanal cheese is more labor-intensive to produce than industrial cheese.  More people will hire interior designers and people will get their kitchens redone more often.  There will be more personal shoppers and more policemen.  People will get fancier haircuts.

That makes it sound like the new economy will be all about frills, but in reality much more serious forces are at work.  Three in particular need to be taken into account: We are developing a surplus of both educated and uneducated labor, making workers relatively cheap; the drastic decline in the prices of computing power and bandwidth has changed our relationship to the world of information; the rise of the two-career family and the growing demands of the professional workplace have created a substantial group of families who are, comparatively speaking, money rich and time poor.
...
Value added intermediation is the rationale for a whole range of services that entrepreneurs will be building in coming years.  You might have a family tech agent that for some reasonable fee reviews and manages your communications life: helping you select the right phone package for your family’s patterns and needs, advising you about major electronic purchases, making sure you get the most out of your equipment and software, serving as your tech back up and troubleshooting.  When something goes wrong you don’t call New Delhi; you call the people down the street.

I’m not sure that Matt Yglesias is the person whose ideas I’d want to bet my future on, and this strikes me as ridiculous for several reasons.

The key assumption (which Mead expands upon) is that our massive decline of manufacturing and the accelerating outsourcing of white collar jobs will still leave behind a sufficient population of "money rich and time poor” "professionals”^[1] to support a projected horde of personal assistants, financial advisors. party planners, and other "intermediators.”  And not only support them, but support them at a close-to-"professional”-level income, so they themselves will find it not only affordable but also desirable to employ other "intermediators.”  (Sort of everyone taking in each other’s laundry, right?)

And Mead goes on to assume a population of well-educated workers who are unwilling, unable, or uninterested in becoming part of the "professions,” and will therefore be ready and eager to work as "intermediators.”  But in the quote above, Mead stumbles over the problem: The current fire sale on otherwise-unemployable educated people cannot last.  Because "intermediators” gotta work cheap (otherwise the "professionals” won’t be able to hire enough of them to support everybody), but if they’re that cheap, how do they pay for their schooling?^[2]  Wow, dilemma!

And just how many "personal trainers,” "private college counselors,” or "relocation advisors” will some barista be able to afford, anyway?


Elsewhere:

Related:
-----

Posted by: Old Grouch in In Passing at 22:49:59 GMT | No Comments | Add Comment
Post contains 590 words, total size 6 kb.