Don’t Help Your Child Get A Job?

The Telegraph has an interesting article that calls for people to disregard the interests of their offspring in favour of some nebulous concept of “social mobility”.

Too many parents are eager to provide their children with the opportunity of work experience at top companies, said James Caan, the entrepreneur and Dragons’ Den panellist who will be introduced in his new role on Tuesday.

There is definitely something wrong with unpaid internships. But the answer isn’t to get rid of them, it’s to stop telling everyone they can be astronauts.

Parents and teachers instil unrealistic dreams in young people, who then accumulate student loan balances that are larger than a house deposit, while simultaneously not earning enough labour market income to justify the “investment” in their human capital.

We’d be better off if people stopped worrying about social mobility and started worrying about developing valuable skills – you know, the ones you get paid for.

A lot of the bleating over unpaid internships is around “luxury / self-actualising” careers like film production, fashion design, journalism and broadcasting. It’s a perfectly competitive market in those fields, the rewards if you succeed are great, but unless you have parental support to tide you through the low earning years you are unlikely to get to the peak of your profession.

If you look at successful journalists and broadcasters in New Zealand, you’ll quickly realise how many leveraged their parent’s wealth and connections to their advantage. Small town success stories are for baby boomers. Millenials have to be completely realistic about their situation, their parent’s situation and identify a valuable skill that they can get paid for.

Self-actualisation is a luxury good. Social mobility is a myth. Hard work and dedication seem to be remnants of a bygone era. The number of young people who have no concept of how supply and demand works in the labour market is astonishing. No wonder many Millenials are disillusioned when they haven’t figured out that it doesn’t matter what you want, it matters what the specific sub-market of the labour market you want to enter wants.

For a glimpse of how the American system functions, not that I’d ever want New Zealand to become like that, they’re looking for “22-22-22” – 22 year olds willing to work 22 hour days for US$22,000 a year.

Welcome to globalisation folks – with high labour mobility, easy access to knowledge over the internet and therefore faster supply/demand imbalance correction times – you too can experience what happens if everyone suddenly wants to do what you do for a living.

There really is a trade in labour going on – developing countries are getting richer, because they’re a lot hungrier to learn and earn than coddled first worlders. They’re happy to work long hours for relatively little pay because relative to their local labour market they’re earning a very good wage.

Asking people to not help their child get a job doesn’t make things better. In fact, not taking advantage of parental connections is borderline sadistic in a competitive labour market. Every network node matters at the margin – future employer, future client, future business partners, future supplier. I doubt James Caan would thwart the implicit privilege his children experience due to his success.