"What happened to the U.S. employment miracle?" | Bleader

"What happened to the U.S. employment miracle?"

by

Sign up for our newsletters Subscribe

2 comments

Last weekend, 11,000 economists descended on Chicago for the annual meeting of the American Economic Association and allied organizations. That sounded like a great opportunity to get a fix on what's ailing us. After perusing a 400-page program that listed everything from "Robustness and Approximation in Mechanism Design" to "Implications of Rational Inattention," I sat in on a panel considering “What Happened to the U.S. Employment Miracle?” Here’s what I heard:

Things are not really better.

From Harvard professor Lawrence Katz:

* The percentage of us with jobs (the employment/population ratio) is smaller now than it was two-and-a-half years ago, when we supposedly hit the bottom of the "Great Recession" and began a recovery.

* Jobs that are available skew to the top and bottom of the spectrum—there’s been a major loss of those that would support a middle-class lifestyle.

* To get to full employment today, we’d need to create 10.6 million jobs.

* Even if things go very well (as they did in December, when the government says 200,000 jobs were added), allowing for growth in the labor force, it’ll take at least seven years to do that.


Eureka! There are too few jobs.

University of Chicago’s Robert Shimer:

* Although the official unemployment rate has fallen from more than 10 percent to 8.5 percent (in December), nothing much has changed. The apparent “improvement” is due to job seekers dropping out of the labor market and no longer being counted.

* 1999 to 2000 was a “gold rush” period—we shouldn’t expect a return to those levels.

* Contrary to some assertions, we’re not saddled with a poor-quality workforce. People can’t get work because employers aren’t hiring anyone.

Men, especially young men, are in trouble.

University of Chicago’s Steven J. Davis:

* The share of us who fail to complete high school is greater now than it was a half-century ago.

* Jobs for less-educated young men began vanishing before 2000.

* We didn’t notice because the problem was masked by the construction boom that came with the housing bubble.

* Former construction workers account for a disproportionate share of current unemployment.

The “employment miracle” was Mom going to work.

Princeton’s Henry Farber:

* The strong U.S. employment performance in the last quarter of the 20th century was almost entirely due to women entering the workforce.

* That performance began to fail in 2000.

* Perhaps stronger unions would have prevented the outsourcing of so much work to other countries.

Farber’s final speculation—which he said surprised even himself—was quickly shot down by his fellow speakers. But when someone in the audience asked the question lurking behind all of this, it was Farber who answered.

“How do you get employers to hire in the U.S., when they’re getting the work done more profitably elsewhere?” the audience member wanted to know.

“I don’t have a clue,” Farber replied.

All this was supported by lots of squiggly visuals—charts and graphs, mostly comparing U.S. performance to that bastion of economic stability: Europe. For another take on how we got into this fix, check out DeVry historian Jerry Harris on globalization.

Read more from Money Week:

"Against all odds," by Kate Schmidt

"An awesome gesture of 'Fuck you, poor people,'" by Mike Sula

"Lessons I learn from Margin Call," by Ben Joravsky

"Five great songs about money," by Miles Raymer

"Obama in town this evening for the usual reason," by Steve Bogira

"The euro crisis? You bet it's important!" by Michael Miner

"Money: What do you want with it?" by Ben Sachs

Comments (2)

Showing 1-2 of 2

Add a comment
 

Add a comment