Government

EYE ON THE PIE: Care-giving could be competitive edge

March 28, 2005

Joe Gomeztagle and I were having delicious but illicit desserts at Steak n Shake in Merrillville. Joe, you will recall, is the guy who was the force behind getting the state's former property-assessment practices declared unconstitutional. This day, Joe was telling me that we're on the wrong track in Indiana again.

What I like about Joe is that he is often out ahead of others who are labeled "thinkers." While others are pushing for government efficiency, Joe is talking about something far less abstract, employment. If you think about it, he is right on target. As I drove away from our meeting, I had these thoughts:

In many cases, we have too many people working in government. If they had better skills, if their work were better organized by management (the political leadership), there would be fewer people needed to do the tasks they currently perform. But if we cut employment in the public sector, where would these people get jobs?

"But government should not be the employer of last resort," you assert. Agreed. Excess employment in either the public or private sector is a burden on society. We tend to call it under-employment. At the same time, unemployment is a comparable waste of human skills.

How can we correct underemployment (inefficiency) and unemployment in our state? One route is to increase the demand for the labor we have. This was the philosophy of the 1930s, when we created jobs by building roads and planting forests.

But today, road- and bridge-building is not as labor-intensive as in the '30s. We now use a single machine to do the tasks that used to be done by dozens of men. If we are to increase the demand for labor, we need to direct money to those tasks that have yet to be mechanized. Among these tasks are high-quality care giving for the young, the ill and the aged.

We would have to retrain those who are currently under- or unemployed to do these jobs and, thus far, society has shown little interest in putting resources into such efforts. We would rather spend our money on 42-inch TV screens to watch "American Idol."

Note that a program that would increase the demand for labor in care giving does not require government intervention. What is needed is a desire by individual citizens to see higher-quality care provided for the young and the aged. This would be a change in the consumption patterns of the private sector that would lead to greater efficiency by using our human resources more effectively.

Instead of having under- or unemployed people, we could buy services from Americans who are prepared to help others. This would make us not only more efficient, but also more consistent with our stated desire to be a compassionate society.

Government efficiency would rise with an increase in the demand for that labor. As care-giver wages rose, workers would be drawn into those activities. Governments would have an incentive to modernize and employ fewer people, thus raising productivity.

Think what it would mean to Indiana for attracting business if we could boast that we have top-quality care-giving facilities, unmatched in the nation. For many well-educated, high-earning couples, the care of their children and parents is among their foremost values. If we want to attract the cutting edge of industry, maybe we need to learn how to use our least-skilled population more effectively.



Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mmarcus@ibj.com.
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