Seven Explanations for Bullshit Jobs

Why are you reading this article at work?

In my Bullshit Jobs review, I criticized Graeber’s primary explanation for bullshit jobs. The topic deserves more serious discussion, and I will try to provide that here.

Explanation Zero: Rent Seeking Behavior

I call this “explanation zero,” because there’s less mystery for these sorts of roles. In my original post on Bullshit Jobs, I noted a distinction between two types of bullshit jobs. First, there are jobs that provide value to the company, but not to society at large. These include Graeber’s “goons,” like telemarketers, who cancel out the corresponding jobs at competing companies. I would add people who make incomprehensible financial assets that don’t add value to the physical world. I’ve seen one author estimate that only 15% of finance leads to output in the real economy. I won’t vouch for the accuracy of this figure, but I think we all know that some workers bring profits to their employer increasing GDP. This isn’t necessarily a bad thing. If we value competition (more on that later), we can accept some goonery as a necessary side effect.

I’m interested in the second type of bullshit job: the ones that don’t even provide value to the company that’s paying for them. Those shouldn’t exist. Those make people question their sanity. Those deserve a deep dive.

Explanation One: Professional Incentives

I won’t add much new information here, since I mentioned this explanation in the review:

While companies maximize profit, individual employees see little connection between their own life satisfaction and the bottom line. Hence, workers often engage in self-interested behavior that hurt’s the company’s profitability. As one example, managers gain more prestige when more people work under them. LinkedIn bios will boast about managing a team of over 200 people but never about managing a team of 50 people when an inefficient manager would have hired 200.

Individual employees face incentives that encourage more hiring. For example, hiring helps with promotions. You need juniors to become a senior. You need seniors to become a manager. You need managers to become a director and so on.

I also think some incentives can cause employers to keep useless jobs. If you realize one of your teams produces nothing, you could fire the employees or cut the team. Such an action might not look good for your career, though. If you remove a team, you tacitly admit to screwing up by hiring them. Others might see you as being unable to train or lead employees. Your best might be to keep them on since, hey, the team is costing you money.

Explanation Two: Monopoly Power

Let me play ECON 101 student for a second: why wouldn’t the market fix bullshit jobs? If a company hires excessive employees, a new competitor would enter the market and undercut them, right?

It’s easy to scoff at these sorts of explanations, and, yeah, some scoffing is warranted. Yet, I think it’s worth exploring why we scoff at these market-fundamentalist musings. While I reject the extreme version, it makes sense that the market competition should somewhat reduce bullshit jobs. Monopoly power, then, could explain the existence of bullshit jobs. Competitors can’t come in and punish companies for their crappy management.

Some monopoly power has arisen through lax regulation. Viacom purchased CBS, most eyewear firms combined under Luxottica, and Light & Wonder has gobbled up multiple slot-machine producers. I don’t see any unstoppable macroeconomic force as the cause of these mergers. It seems like the government could have said no, but they didn’t. I believe this is part of what the cool kids call neoliberalism.

In other cases, though, it's harder to see what the feds could do. If the government wanted to break Seattle’s Best apart from Starbucks, I don't need much imagination to picture how they would do so. We would see separate Seattle’s Best and Starbucks¹ stores, owned by different people, just the way it was before the acquisition. I'm not saying it would be easy to break them apart, but it's at least intuitive in terms of how it would be done.

On the other hand, how would you break up Google? If broken into five companies, would you use five separate search engines? Or would everyone just use the one that worked the best? The same holds for Facebook. If there were five different ones, would you have five social media accounts? Or would you just pick the ones everyone else uses? The government could de-bundle the products, like ripping Instagram from Facebook or Whole Foods from Amazon. Still, that would leave intact the monopoly power of each company’s main product. The same applies to companies with more physical products, like Apple. Could the market really hold five iPhone-like products with five different genius bars in your local strip mall? To be clear, I’m not making a normative statement here. I’m not claiming we shouldn’t break these big firms up. Rather, I’m just pointing out that there’s a less intuitive path to do so, versus, for instance, forcing MGM or Caesars to sell off a Las Vegas Strip hotel.

Other times, I think monopoly power occurs for old-school reasons: economies of scale² and brand recognition. Does Ford still sell a bunch of cars because the firm's executive team boasts a unique prowess in the production and marketing of cars? Or does it still sell a bunch of cars because, you know, it's Ford?

I searched for some papers about tech and monopoly power, and I found this one. The typical caveat applies: you should never change your opinion from a single social science paper. The author argues that IT increases monopoly power through three mechanisms:

(i) The kernel of monopoly power: private ownership of knowledge. Innovators are sole owners of important information they can prevent others from using; this is the kernel of their monopoly power.

[…]

(ii) IT enables network externality on platforms. The economic effects of ecosystems is obvious- they enable wide network externalities among interdependent participants. Such business models are based on the idea a platform is a coordination device used by many people at virtually zero marginal cost to the platform owner; hence, its profits increase with the size of its user base. Externalities are the direct consequences of IT, since all that is shared is information.

[…]

(iii) IT Platforms: increasing returns and rising optimal firm size. Apart from declining cost over time, IT entails increasing returns to scale over a wide and rising range. Scale economies, coordination externalities and falling computing cost facilitate firm management and increase optimal firms’ size. In many cases they lead to a “winner takes all” outcome

If that reads like Egyptian hieroglyphics³, allow me to translate:

1. IT gives firms private knowledge that competitors can’t use

2. IT becomes more valuable as the company gets more customers

3. It’s easier for bigger firms to pay for the IT stuff

Think of a very un-tech company like McDonald’s. They have tons of customer data (point 1) that provides an advantage over smaller or younger competitors. This customer data becomes valuable as more people buy the product (point 2). There’s a large fixed cost to this IT stuff that’s easy for McDonald’s to pay for, but impossible for a new entrant into the market to pay for (point 3). McDonald’s, therefore, enjoys some level of monopoly power that it wouldn’t have enjoyed in the pre-IT world. The market, then, becomes less competitive, so it doesn’t punish firms for filling their offices with bloat.

Explanation Three: Workplace Complexity

Here’s a fun game for you. Get a one-week calendar for next week. Okay, you probably won’t do that, but imagine one in your head. Think of the three co-workers who⁴ you work with the most and chart out their forty-hour work weeks. You can start with the meetings they share with you, then you can add the time that you know they’ll spend on related projects. If you’re like me, these calendars don’t look much different that the blank ones we started with. Next, for the parts of the calendar that you could mark, explain how each time-block will impact the company’s bottom line. Could you craft three full calendars, with the business value of each event explained? I’m guessing you’d have a better chance of beating Dark Souls blindfolded.

I’ll admit that I’m not providing a lot of insight here, but it’s worth saying: the modern white-collar workplace is complicated. It’s just hard to tell what everyone is up to, so managers struggle to identify unproductive employees. Contrast this with the proverbial widget factory, where the bosses won’t have any trouble spotting those who don’t produce widgets. In fact, some see this as a positive. One advantage of working for a larger firm, I’ve heard professionals say, is that you can “hide.”

Explanation Four: Professional Class Power

This explanation is the weakest and most nebulous. Not coincidentally, it’s also the closest to what Graeber presents in Bullshit Jobs. I’m not usually a power-dynamics guy, but I think we can analyze power in the workplace. When workers have more power, their conditions improve. This includes wages and benefits, of course, but it also includes better treatment at work, more consistent schedules, and a means to file grievances.

Maybe white-collar workers have gotten more powerful in recent years, and we’re wielding that power. I think this explains some of the recent workplace fads, like the discussion of mental health. I tune that stuff out, but it seems like a lot of my fellow professionals enjoy it. Well, what else do white-collar professionals like? First, we want people that make us feel more important and gain more power, as discussed in explanation one. Second, we want more employees helping us out, even if we won’t have a full forty hours of work for these employees. Finally, it’s nice to increase the demand for our skill sets.

Again, this one is a bit fluffy. There’s no data scientist union out there negotiating for more junior analysts and mindfulness group chats. I hope someone smarter than me (and, for that matter, smarter than Graeber) can piece together a more sophisticated model for think. In the meantime, I think the concept of a managerial class acting in its own interests makes some sense.

Explanation Five: HR Liability

Front-line employees can lose their jobs by taking an extra sick day, but we don’t see much firing in the office. I once worked with someone who everyone recognized as a low performer. He not only didn’t produce much, but he also displayed an attitude that clashed with company culture. Yet, he didn’t get fired. He didn’t even get put on a performance improvement plan. Management just kinda… waited him out. He eventually found another role, so he left without anyone having to endure a firing process. I’m not alone in seeing an event like this. There’s even a term for it: de-hiring.

Part of this stems from liability. From the 21st Century Salonnière:

I think we need a category for people who do tasks that are created to decrease liability -- endless reports and trainings that no one cares about; and they create endless rules about what you can't do (top of the list, you can't fire anyone). All the money they spend on all those bullshit jobs could just be used to pay off lawsuits, if there were actually any.

I think that’s part of the story, but I don’t think it explains the entire aversion to firing. The US has terrible labor laws, and companies don’t seem to have any issue firing blue-collar workers. I see two additional factors.

First, firing sucks. Most people hate conflict, so no one wants to start the “you’re probably getting fired” conversation with an employee. This is unprofitable, but from explanation two, though, we know that employee incentives differ from company ones. Would you rather a) feel sad for a couple of days or b) see your company lose money due to a bad employee? That’s an easy choice for me.

Second, consider the optics. A manager might not want to fire an employee that she hired since, by doing so, she would admit to making a bad hire. Yet, if the employee quits, the manager can just dismiss the ordeal as an extenuating circumstance. Firing might also make one look like a weak leader. I once went through team-lead training, and businesses love this growth mindset stuff. Our leaders really think you can talk an employee into not sucking at their job. As a Freddie deBoer reader, you can imagine my thoughts on the matter. Regardless, this situation results in some unproductive employees that no one wants to remove.

Explanation Six: The 80/20 Rule

If you read enough business articles, you’ll encounter truisms like these:

The Pareto Principle, also known as the 80/20 rule, says that 80% of results come from 20% of the causes

[…]

Here’s how the Pareto Principle can be used in different aspects of business:

• It can be assumed that 20% of your employees drive 80% of the output.

• It can mean that 20% of product features cause 80% of the program bugs.

• It can mean that 20% of your customers account for 80% of complaints.

Alternatively,

What is Price’s Law?

50% of the work is done by the square root of the total number of people who participate in the work.

Only a handful of people produce half of the results in any given field or company.

In a similar vein, here’s a Harvard Business Review article called The Unimportance of Practically Everything

None of this [tendency to multitask] would matter if activity and reward were linearly related. But we live in a world where almost everything is worthless and a very few things are exceptionally valuable. This is a counterintuitive idea. After all, the idea that 50% of results come from 50% effort is appealing. It seems fair. Yet, research across many fields paints a very different picture.

The very different picture is the aforementioned Pareto Rule. He continues:

Once we unlearn 50/50 logic, a whole set of behaviors become instinctive. We start scanning our environment for what is really essential. We eagerly eliminate the nonessentials. We say no to 1,000 projects in order to say yes to the one that is exactly what we are looking for.

These aren’t the musings of some oddball anarchist professor. This isn’t Occupy Wall Street; it’s just Wall Street. The business world agrees that most work goes nowhere.

If we combine this with explanation three, over-hiring might make sense as a strategy. Maybe 80% of your employees provide little value, but the top 20% make up for it. In a world where it’s difficult to differentiate the first group from the second, I can see the value of increasing your headcount beyond what’s necessary. I think sports provide a good analogy here. If an NBA team acquires four first-round draft picks, the team isn’t hoping for four pretty-good players. Instead, it sees a 1-in-4 shot at picking the next superstar that will transform the franchise. Maybe it’s just a good business strategy to hire more right now, find the 20% of workers who provide real value, and cut the bloat later.

Explanation Seven: It’s the Bureaucracy, Stupid

Tell me if you’ve seen this story before. Your team is busy, and you’ve built up a huge backlog. At long last, you finally hire that extra employee, and you train them up. As a result, you, uhhh…. finish more or less the same amount of work as you did before and your backlog stays the same size. You might have also experienced this in the other direction. A poorly timed quit, firing, or layoff leaves your team with one less worker, and your shorthanded team performs just as it did at full strength. If you recognize one of these stories, you’ve seen Parkinson’s Law in action: “work expands so as to fill the time available for its completion.” If you think a task requires five people, somehow, someway, it will.

Parkinson’s Law probably represents a universal feature of large, human organizations. Mari, The Happy Wanderer discussed this within the context of the former Communist Bloc.

You can’t imagine the layers of bureaucracy in situations where at most one worker could handle things. A trip to the main post office [in Czechia] to pick up a package could take you all day because you would have to go to like eight different counters to conduct this simple transaction. (I used to beg people in the US never to send me a package, ever. Nothing could possibly be that important.)

I consider this the most boring explanation for bullshit jobs, but we shouldn’t ignore the boring stuff. Some bullshit jobs probably have nothing to do with IT, 21-st century capitalism, or incentive misalignments. Bureaucracy grows.

1. Looks like Nestle owns them now, but Starbucks did recently: https://en.wikipedia.org/wiki/Seattle's_Best_Coffee

2. Stuff gets cheaper as you get bigger. The 500,000th car is cheaper to make than the 500th one.

3. I have the paper open in Google docs and it’s giving Grammarly a heart attack.

4. I’m not a “whom” guy.