Archive for February 2011
There’s been some discussion lately of federal funding for the arts, especially in light of the debate about cuts in the next budget. As someone who planned on a career in the arts until I realized how utterly unlucrative that would be, I have a particular interest in this. By unlucrative, I don’t mean that being a theatre director (my erstwhile dream) wouldn’t make me a millionaire. I mean that, according to the Bureau of Labor Statistics, in May 2008, about 150,000 people were employed as actors, directors or producers in all fields. That includes film, television, theatre and radio. Assuming that all of these breakdowns are equal,* 12,500 people were employed as theatre directors that month in the entire country. As a comparison, there were about 750,000 lawyers employed that month. Even someone who is very good at directing theatre (which, frankly, I wasn’t) is unlikely to be employed in their chosen profession at any given time. So, instead, I decided to be a policy analyst, a profession about which the BLS is curiously silent.
My public finance textbook includes a refresher on microeconomics. Like most microeconomics texts geared toward the public sector, one of the examples that comes up again and again is the effect of TANF benefits on an individual’s work, and especially how that affects the larger labor supply.
It’s interesting to me that in all of these examples, how much an individual works is always described as her “preference” for work. I know, in economics, the word “preference” is supposed to lack the kind of pejorative undertone that’s piquing my interest, but in an introductory textbook, I think it’s fair to assume that the readers probably won’t be thinking like economists right off the bat.
By using “preference,” the implication is that a TANF beneficiary makes an active choice about how many hours to work based solely on the level of benefits she receives. Higher benefits (i.e., more money) = fewer hours worked. However, TANF benefits are based (in part) on how many children a beneficiary is supporting. Beneficiaries with more children are granted higher benefits. It’s possible, then, that there’s a common cause behind the correlation between work hours and benefit levels: beneficiaries with more children have to spend more time parenting and can’t work as many hours and also receive higher benefits.
The use of the work “preference” also implies that the beneficiary decides how many hours to work. On a macro level, there’s a certain amount of truth to this; a person generally applies for a job with an understanding of how many hours each week she’ll be expected to work. However, anyone who’s ever held any kind of job can tell you how well that expectation lines up with reality. In better-paid, white-collar jobs, the tendency is for that number to be understated. These jobs generally come with an annual salary, so when work hours vary, it’s usually because the employer wants the employee to work more (with no additional pay). In the kind of retail and service industry jobs that are more prevalent among TANF beneficiaries, the opposite is true. Workers are paid by the hour and employers are more likely to cut hours to save money. A TANF beneficiary may actually have a preference for working more hours, but her employer won’t allow it.
I understand that economics textbooks will use economics jargon. That jargon needs to be defined, however, and I’ve never seen any text explain the distinction between an economic preference and a personal preference. When your text is targeted toward students of the various disciplines of the public sector, (including students who will someday work on welfare policy), it’s problematic to not offer a fuller explanation of how the economic concepts interact with the realities of that sector.