Optimism about the U.S. economy: people will naturally work harder

I had dinner this evening with two Harvard undergraduates.  I asked how they felt about our government borrowing trillions of dollars that they would have to pay back.  “It’s a good time to be in school,” they responded.  What did they expect would bring the U.S. out of this depression?  “When Americans realize how tough it is going to be, they’ll start working a lot harder.  I spent last summer working in a lab in India.  The Indians worked much harder than any American because it is much more competitive over there.”

This might be a more sensible explanation of how we might plausibly return to economic growth than anything that I’ve heard from politicians or economists.

[Alternatively, the kids could get jobs as public school teachers upon graduation.  This New York Times article talks about the lives of some teachers in the Rochester, NY public schools, which has doubled its real-dollar payroll expenses over a couple of decades even as the student achievement has continued to slip.  The Times story concentrates on the benefits enjoyed by the unionized public employees and doesn’t mention the fact that the schools are considered failures and that an employer would find an ample supply of better educated workers in most parts of Mexico, India, and China.]

6 Comments

  1. Roger

    February 3, 2009 @ 2:09 am

    1

    The US already has the lowest number of vacation days (two weeks) in the “civilized” world. Hopefully there will be an understanding of the difference of being at work vs doing work.

    The worst thing is the huge amount of friction on successful businesses by use of the legal system. There are no consequences to suing a company and hence consuming their cash that could have been far better spent on other things (research, people etc).

    There is also friction on employees due to the health care system. People are less likely to move somewhere that may be better for the economy such as a company that takes on risks (eg new tools, techniques, research) or is small.

    It would be nice to see greater mobility of people – ie the ability to go where they are needed and can best be used – and for companies to not have to waste exorbitant sums on lawsuits and settlements that have no real merit.

  2. SuperMike

    February 3, 2009 @ 2:27 am

    2

    Here’s the problem with that: Motivation. Why, exactly am I going to work harder? To buy stuff? Most of us have all we need? To get a house? We’ve either got one or are priced out of the market (or the loan market) Buy a new car? Cars last 20 years now! Save for the future? Hah! Inflation’s going to wipe out any cash we might put away, and looting will savage any investments. The golden-egg-laying goose is pretty much killed. Smart, ambitious kids are going to be looking for jobs in government for a while.

  3. chris

    February 3, 2009 @ 2:27 am

    3

    I work with a very bright guy who emigrated to the USA from India and who recently spent about six months working in our company’s software development office there. His brother still resides in India and manages a group of software developers there.

    I was really surprised when this co-worker told me–flat out–that software developers working in India are “far less professional” than those working in the USA. I was genuinely surprised by this, and when I asked him what he meant by it, he related to me some of his own experiences working both there and here as well as some stories from his software-manager brother. He said the management style there is a lot less laid back than here in the USA, and for this reason people tend to spend a *lot* more time in the office but they actually get a lot less done and have to be “ridden” constantly to make progress. (I’m not sure which came first: the draconian management style, or the lackadaisical worker attitude which would seem to require it.)

    I asked my co-worker what the software developers do during all those hours if they’re not working, and he said that “looking busy” is easy to do, from playing solitaire to surfing the web, and a lot of such idle activities are undertaken as a matter of course. I told him I would have guessed the opposite–that developers working in America are the less productive ones, but he assured me that this was not the case, not by a long shot.

    Coming from an Indian who has extensive experience working in both India and in the USA, this revelation popped the “Indians work harder” myth for me, and you can take this opposing data point for whatever it’s worth.

  4. Michael McDonald

    February 3, 2009 @ 9:43 am

    4

    Philip,

    I found the idea of someone with her level of training making $100K+ / year fascinating. One wonders how much you professors at MIT make? Is there a published list somewhere? Even a general range would be interesting. You’d think a PhD and maybe a Nobel Prize or two would count for competitive pay, but somehow I doubt it.

    Mike

  5. philg

    February 3, 2009 @ 10:34 am

    5

    Michael: Glad you enjoyed that article on teachers in Rochester, NY. It is amazing that there are any significant number of jobs in Upstate NY paying more than $100k/year. The area almost defines economic collapse (though I guess we shouldn’t laugh at them; they were just a couple of decades ahead of the rest of the U.S., as we have recently become aware).

    To set the record straight, I’m not teaching at MIT right now. I tried to retire from all things nerdish in 2001. I publish some links to faculty salary data in
    my “Women in Science” article (http://philip.greenspun.com/careers/women-in-science). It looks as though an Associate Prof (someone who would be about 20 years post-undergrad and therefore comparable to a schoolteacher who had worked for 20 years) at MIT earned $106K for nine months (source: http://chronicle.com/stats/aaup/index.php?action=detail&id=1710). So the salaries are comparable. Keep in mind, however that MIT is one of the better paying universities in the U.S. and that Boston is one of the highest cost of living cities in the world. The median price house in Rochester costs $84,9000 (less than one year salary). A dilapidated cramped standalone house in Cambridge costs about $1 million (10 years of salary for the teacher at MIT).

  6. Rick

    February 3, 2009 @ 11:57 am

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