The BLS is out with a new employment report this morning. The headline unemployment rate ticked up to 7.9%, but my preferred employment indicators are the employment/population ratios by gender for ages 25-54. That ratio for men is as above. Basically, the recovery stalled out in 2012 - we ended the year much where we started.
For women we get this:
Clearly, the labor market still sucks for a lot of people.
(I am having connection troubles - Stuart you may have already recieved this comment)
ReplyDeleteA recent report from McKinsey paints a fairly clear picture of what to expect long term in employment dynamics for developed countries (with a focus on the US). In short, most of the (manufacturing) jobs lost over the past decade are due to static demand in the domestic US market in a context of significantly increasing productivity.
By 2030, the developing economies will represent a (new) consuming class equal to the existing class (an additional 1.8B consumers). Companies looking to get at this demand will often need to be producing in those regions - if the developed countries are lucky their corporations will be successful in establishing activities in the markets and send home earnings - jobs ... not so much.
Offshoring and outsourcing is only a minor factor in the US employment decline over the past decade.
The report is interesting but dense, IMO a worthwhile read in terms of understanding where the classic manufacturing industries are headed.
(3MB PDF) http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights%20and%20pubs/MGI/Research/Productivity%20Competitiveness%20and%20Growth/The%20Future%20of%20Manufacturing/MGI_%20Manufacturing_Full%20report_Nov%202012.ashx
Re: McKinsey report.
ReplyDeleteI don't know if it's the same one, but another one predicted that by 2020 there will be a HUGE surplus of non-college education workers in America. Even if America has never had a higher rate of pushing out college-educated people.
Why? Because of automation.
And in fact, on issues like driverless cars or speech recognition(which is seriously improving fast), more and more white collar jobs are getting automated.
People do not realize, however, that those who are hurt the most are India and China.
Chinese manufacturing employment actually peaked in 1996(!) and has been declining ever since.
Even Foxconn, which makes Apple products and other high-tech equipment is slowly replacing its human armies for robots. It has pledged to use 1 million robots by 2015(but I think they're slowwalking it, in part due to pressure from the Chinese government because of the drastic effects it'd had on employment since Foxconn is a pioneer and other companies would follow in their robotic paths).
In the United States, after a brief uptick in manufacturing employment, it has declined for the last 5 straight months.
Productivity is up, but employment keeps trending down. Again, it is the machines. Why do you think Apple is sending some of its manufacturing from China back to America, like the production of the iMac?
Because it can now have a completely automated factory in a way it couldn't 15 years ago.
As Krugman has said, inequality has changed. It used to be labor vs labor, namely high-educated vs those with less education.
Now it is capital vs labor, even if you're well-educated, that's simply no longer as safe a bet anymore to escape unemployment.
And that is why wages are falling. More and more highly educated people are taking jobs that usually would have gone to high school graduates(and dropouts) in the past. The difference this time, they are leaving those positions only slowly. People in their 30s with college education are still doing menial jobs at a high rate, something that wasn't the case the same way before.
Also, it now helps to have a good grasp of economic history. The industrial revolution did wonders for the world, technologically, but people who have looked at employment carefully did not at all find it was beneficial for workers. There's still a debate about it, naturally, but it is telling people are even having serious discussion about it.
The fact is, the coming decades may be great for technology, but it's far from clear that we will not have a poorer population with more joblessness. Maybe 15% unemployment will be the new normal(of course, it will be lower than that, as people drop off the labor force and stop being counted).
In some unproductive economies, like Spain, 20% unemployment is probably the new normal.
This is all bizarre, since there are fewer and fewer young workers in proportion to old workers and we've all been told as the boomers retire "there will be too much demand for jobs".
Well, people who were born in 1940 are now 73. I'm assuming most people retire around 65-67(even if the post-recession environment has brought some of them back).
In other words, we're already half-way, if not more, through the baby boomers' retirement. Yet those jobs for young people keep not happening.
The labor market will be the big next story in not just the economy but in our societies this decade, aside from the environmental issues we've been talking about.
http://www.bom.gov.au/announcements/media_releases/ho/20130201.shtml
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