2014-03-25

ZMP

I've been notably out of the blogging loop lately. Truth be told, I may have reached "peak blogging" last year, and I've been experiencing diminishing returns ever since. The blog may survive, or may not. I suppose it depends on how interesting my life gets in the future, and how much time I dedicate to waxing about it. See this post for additional clarification.

But this morning, I went back to my blog feed to catch up on what's being written-about, and I discovered this post by Scott Sumner, which references this post by Tyler Cowen. I'm too late to the party to add an impactful comment under either of those blog posts, so I'm stuck with having a go from the comfort of my own blog.

The Argument For ZMP Workers
There is a lot of conjecture about the concept of a "zero marginal product" (ZMP) laborer. The idea here is that there are people out there in the economy who simply do not add value to the economy. For the sake of argument, let us imagine the receptionist at an office building. When you check-in at the office, you inform him or her what your business is ("I have a three o'clock appointment with Mr. Reynolds."). He or she then pages Mr. Reynolds, who walks down to meet you, and off you go to your appointment. This job belongs to a real human being, but it's easy to see how the same function could be performed by a touch-screen computer system integrated with the company's email server. The receptionist doesn't seem to add any value. He or she spends all his or her "down time" surfing the internet or watching TV or playing FreeCell or any of the other things you've seen receptionists do when you've checked-in somewhere.

If the economy gets tight, this receptionist might be the kind of person who loses his or her job and never becomes employed again. Why? Because this person has a comparative advantage in an economic activity that is no longer scarce. It doesn't "pay" to hire this kind of employee anymore. They don't bring anything to the table. Hence, "ZMP."

My Argument Against ZMP Workers
Of course, in the real world, someone might lose his or her receptionist job and go on to do some other low-skill task that actually does add value. The receptionist may find a promising career as a data front-end analyst (to give one realistic example), cleaning up data so that it can be imported into company databases and used by higher-level employees. Or, the receptionist may go to work at Starbuck's or Costco, drawing a similar salary by performing tasks that require little or no training. Or, the receptionist may take the loss of his or her job as an opportunity to focus on some as-yet-unpursued economic contribution (perhaps he or she is an artist or is college educated but does not yet work in his or her chosen field). Perhaps dozens of things.

My point is that, while it is extremely easy to imagine ZMP jobs, it is not so easy to imagine ZMP people. So the existence of "ZMP workers" seems to be a ruse. I do believe that there are many jobs in every economy (from the beginning of time) that add no particular value to anything. This, however, is a characteristic of the job, not one of the worker.

Coda:
I have blogged about ZMP before. In this post from 2011, I seem to be attracted to the idea. Look at my wildly off-base criticism of Bryan Caplan:
Caplan seems to believe that the economic consultants in my story "didn't have ZMP because they found other jobs."
In fact, it was I who was wrong, not he. If they found other jobs, then they must not be ZMP workers - it was their jobs that had ZMP. (As an aside, I still think that scenario fits with Arnold Kling's PSST idea, but clearly my criticism of Caplan's point was wrong, wrong, wrong.)

Somewhere along the lines, I successfully corrected my thinking on this. In my initial post about shotgun theories (April 2013), I used the ZMP concept for inspiration. There, I defended Caplan's position.

Later, in August, I was back to criticizing Caplan again, but luckily still had the right idea about ZMP.