Eric Raymond has a good post about the cause of rising unemployment in the USA. He describes two of his unemployed friends as “marginally employable” for various reasons, including:
He’s black, which makes him a EEOC [Equal Employment Opportunity Commission] lawsuit risk — and if you don’t know how much that hurts his chances, you haven’t been anywhere near a small or medium-sized business in the last 30 years.
And all the interesting things happen at the margins:
These are the people who go to the wall when the cost of employing someone gets too high. We’ve spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker — which meant the minimum revenue-per-employee threshold below which hiring doesn’t make sense has crept up and up and up, gradually. This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it’s not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can’t pull enough weight to justify a paycheck; it’s the marginal ones, the mediocre, and the mildly dysfunctional.
Meanwhile, Tim Worstall has noticed that the cost of employing women is about to increase in Europe. Some women’s “rights” committee has voted to let women have lots more paid maternity leave.
Increase the (potential) cost to employers of hiring women of child bearing age and you’ll both reduce the number they’re willing to hire and the wages they’re willing to offer them.
Once you understand that costs drive behaviour, and that tiny changes in costs cause big changes in behaviour at the margins, all this becomes pretty obvious.
Update: Jonathan Pearce comments on the same Eric Raymond article.