A potentially important development: is the improving job market helping to stabilize the labor force?

August 1st, 2014 at 12:00 pm

Over at PostEverything, with nice pictures.

The piece, which builds off the fact that the formerly tanking labor force participation rate has been fairly stable now since last August, ends with a sports analogy:

Simply put — and because who can resist a econo-sports analogy — we’ll put more growth points on the scoreboard because more people have come in from the sidelines to contribute to the game.

The idea is that if greater labor demand pulls people into the labor market who are currently sitting out, that will boost GDP growth, which is roughly the sum of productivity growth plus labor force growth.

But I fear the analogy may be a bit off. What game allows you to keep sending people in such that as your team grows in numbers, it can score more points than your outnumbered opponent? Imagine a basketball game where you could just keep sending in players off the bench without pulling anyone out. That sounds a bit more like war than sport. Still, you get the point…

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2 comments in reply to "A potentially important development: is the improving job market helping to stabilize the labor force?"

  1. Fred Donaldson says:

    You were not a panel pundit this morning on the jobs report on CNBC, but I watched anyway, especially interested in the comments of Proctor and Gamble’s CFO.

    He was asked if he had any problems finding qualified employees in America for his company. He said the company has no problem hiring excellent employees, and that they post 3,000 jobs a year and get one MILLION applications.

    An hour later someone said he was astonished at 3,000 jobs and one million job seekers, but another person on the panel said that P & G was global , intimating this million didn’t represent America’s abundance of skilled workers. Of course, that ignored the original question and answer – qualified workers in America.

    Fashionable arguments for more job training and education campaigns ignore the fact that there are not a smidgen near enough jobs for all levels of talented unemployed, but obvious facts are quickly dismissed by economists and politicians who blindly follow blanket ideology.

    P.S. I always wince at the argument that we have a shortage of engineers (for example) in this country, recalling the efforts of a friend, several years ago, who was valedictorian of his HS class of nearly 1,000, SAT of 1600 on the 1600 scale, graduate with honors in engineering at CMU, but still struggled for six months to get any job at any salary as an engineer. Talk about the brightest and the best. Then, explain why we need hundreds of thousands of tech visas, if not just to lower salaries and create an employer-absolutely-dominated workforce that tells you to volunteer to labor another four or six hours a day with the hidden threat of no job and no right to stay in this country.

    P.P.S. I will not close with my usual “$15 and 40 hours or Fight” for the sake of brevity.


    • smith says:

      The bargain struck by Democrats and Republicans was we’ll give Democrats more potential voters in the long run, if we get a vastly increased pool of cheap and legal immigrant labor, low and high skills, now. This helps 10 million undocumented immigrants who would no longer face deportation, but of course can’t vote (some percentage would eventually after 10 years). It helps businesses looking to cut average wages and sustain the erstwhile mysterious stagnant wage plateau of the college educated. It prevents losses too, the Republicans from losing more of the 1st and 2nd generation immigrant community’s vote, the Democrats from losing significant business support, their money more important than actual workers to protect incumbency. (organized labor also had narrow selfish interests for lending support)

      The progressive answer is to scrap the current bill and support the immigration of free labor, no employer sponsorship required, give everyone the ability to speak up for their rights, bargain for wages and working conditions, switch jobs, collect unemployment, organize drives for collective bargaining, strike, not face physical arrest for deportation if dismissed, be free not to work. There are other distasteful aspects of the current bill, but the restrictions that create a vast expansion of a two tiered labor system is the most pernicious.
      It’s also counterproductive to target domestic tech and science workers and researchers, even if they average 80,000 a year.


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