What if the prime-age jobs problem is just…you know…a jobs problem?

April 12th, 2017 at 10:26 am

Over at WaPo. Of course, this begs the question what to do about it.

I tried to get into some of that in recent testimony, and while I focus largely on the demand side, I do not at all dismiss the supply side, including training and help with medical/physical/addiction challenges.

I have been focusing on direct job creation (also, apprenticeships), because I’m convinced that we don’t solve the problem of persistent and inadequate labor demand in left behind places–rural and urban–through indirect measures, like tax breaks for investing in some designated zone. More to come on this.

Sources: BLS, CBO; my analysis (data available upon request).

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4 comments in reply to "What if the prime-age jobs problem is just…you know…a jobs problem?"

  1. New Deal democrat says:

    Prof. Bernstein:

    I always enjoy reading your blog, and I particularly appreciate your attention to the labor force participation issue.

    I agree that focusing on the long term trend in prime age participation by men is particularly illuminating, since it controls for demographics and for the secular surge in women’s participation.

    But I remain dissatisfied. Because it is very very clear from your graph itself that there has been a declining trend in place that goes all the way back to the 1950s! Even during the Great Society era — can we stipulate it as the most labor-friendly environment in our long lives? – male labor face participation was declining compared with the 1950s. Why?

    The 1990s were the biggest economic boom we had since the 1960s,* and yet male prime age participation was not just lower than the 1960s, but lower than the 1970s and 1980s as well. (*Anecdotally, I realized we were in a boom in the later 1990s when I was stuck in traffic on a two lane highway behind every beat-up old pickup truck in the world. At first I was annoyed. Then I realized, if every guy with a beat-up old pickup truck was employed, we were in a boom).

    I’ve taken my best shot: half a century ago, guys went from healthy to sick to dead earlier and more quickly. With better medicine and greater longevity, guys have increasingly been able to go from healthy to disabled (usually due to neck or back degeneration) for a long time, until they can go on old age Social Security benefits. As blue-collar jobs in particular have waned, it is more and more advantageous to get the diagnosis and go this route.

    Anyway, this long term trend is *begging* for an explanation from a top-flight labor economist like you.


    • Smith says:

      Opportunity changed, manufacturing jobs started to shrink by the late 1950s even, lack of full employment economy and especially factory jobs hurt levels of male participation. Even so total labor force participation kept climbing right through the 1990s as women joined the workforce. Then the 2000s came and women and men dropped out. This didn’t happen in Europe, despite Europe’s higher unemployment. But European working conditions, wages, labor protection, vacations, child care, make employment more attractive perhaps.


    • Bob Palmer says:

      A medium sized city in south central Minnesota currently has a serious labor shortage in the lower end of the wage spectrum. The problem is that those jobs don’t pay enough for workers to find housing there. Building more housing isn’t a solution because the cost of entitlements, labor, materials, etc will produce apartments that are too expensive for low wage workers. City and state are considering a buy-down to give a developer the return he wants to build apartments that low wage workers can afford. That would be an indirect subsidy to employers who pay less than a living wage in the city.

      All this is a little off the point, but it may be one of the things causing low labor force participation in the 25-54 age cohort.


  2. Smith says:

    While you’re trying to figure out how to help the chronically unemployed or long term unemployed, those who dropped out of the labor force all together, and rural, inner city, less educated, lower income, stubborn pockets of economic decline, you might also want to consider this:
    “Even the most educated workers have declining wages
    Cumulative percent change in real average hourly wages, by education, 2007–2014”
    http://www.epi.org/publication/even-the-most-educated-workers-have-declining-wages/
    (I saw this posted on two other blogs by the way)
    The obvious interpretation of stagnant wages of those with degrees is that there is a over supply of high skills workers, or not enough high skills jobs, take your pick.
    Why would one worry about the college educated with 2.5% unemployment unable to find their dream job?
    Because the result is they take jobs away from those with less education, as the graph in the link might indicate. Policy wise, you won’t help wages by enlarging the glut of college graduates, just the opposite unless you create more jobs for them too.
    Not only that, but dissatisfied high skills workers are apt to express dissatisfaction at the polls in unpredictable ways, as surly as the unemployed factory worker. Programs that ignore the middle class while admirably addressing the needs of the most disadvantaged are doomed to failure.

    “Among college-educated whites, only 39 percent of men and 51 percent of women voted for Clinton.”
    https://newrepublic.com/article/138754/blame-trumps-victory-college-educated-whites-not-working-class


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