Transcript and some perspectives as well

A Snapshot of the US Labor Market
A few things to think about…and (I hope) a lot of Q&A
Neal Rappaport, PhD in Economics
Visiting Professor of Economics
Colorado College
[email protected]
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Where do we get the data?
• US Department of Labor, Bureau of Labor Statistics
• http://www.bls.gov/
• Types of Data
• Unemployment rate / Jobs / Earnings
• Monthly, yearly
• By Category
• Gender, Race, Ethnicity, Veterans’ Status, et cetera
• By Educational Achievement
• New unemployment / jobs data comes out first Friday of each
month at 8:30 Eastern Time
• Understanding definitions
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What are the returns from education?
Private and Social Benefits
What is the difference?
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According to a report released this week by the Organization
for Economic Cooperation and Development, across the
developed world the average person who has graduated from
college (either two-year or four-year) and has any earnings
makes about 57 percent more than a counterpart with no more
than a high school education,” writes Rampell. “In the United
States, the comparable earnings premium is 77 percent.”
Despite the value of a college degree in the U.S., college
graduation rates in the U.S. are increasing at a much slower pace
than in other rich countries. And, as Rampell points out, it’s not
just individuals in the U.S. that benefit from a college degree:
“[T]he average return to taxpayers [of tertiary education for the
average man] is $230,722 in the United States, versus less than
half that, $104,737, across the developed world.”
Source: Freakonomics Blog, 8 July 2013
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But Educational Achievement is Tapering Off
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Some Good News…Some Not So Good…
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Some Good News…Some Not So Good…
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If you drop out???
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Manufacturing--Traditional Route to MiddleClass Jobs for HS Dropouts and Graduates
• Historically, manufacturing jobs were the path to the middle class for HS
dropouts and graduates
• E.g. Immigrants, African-American migrants from South to North
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Are Manufacturing Jobs Making a
Comeback—Fact or Fiction?
• “They're closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they ain't coming back to your hometown” – Bruce
Springsteen 1984
• “I want to give incentives to companies that are investing in you, the American people, to
create American jobs making American goods that we're selling around the world, stamped
with three proud words: Made in America." --President Obama, 17 July 2012
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Are Manufacturing Jobs Making a
Comeback—Fact or Fiction?
• Some fact and some fiction but US is not changing from a service economy to a manufacturing
economy
• Lost ~ 6,000,000 manufacturing jobs—2000-2009; re-gained ~ 600,000 since 2010
Manufacturing peaked as share of US economy in 1953 (28% and 33% of jobs)…now 12% (and
10% of jobs)...but real GDP rose from $2.6 trillion to $15.5 trillion over that period…
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Are Manufacturing Jobs Making a
Comeback—Fact or Fiction?
• Evolution of the economy and labor market is natural and inevitable
• Not all service jobs are “bad” and not all manufacturing jobs are “good”
• We are not becoming a nation of “burger flippers” and “insurance
salesmen” but there is a lot of good in flipping burgers and selling
insurance—if that is what the market demands…
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Obamacare and the Labor Market
• Hyperbole dominates…
• "Hardworking American families are struggling and their life has become harder and harder
and harder. And madam president Obamacare is the biggest job killer in this country. The
American people want to stop this madness and so do I.“– Ted Cruz, September 2013 (and,
I am sure, many other times)
• The US economy has added private sector jobs every month since October 2010
• The likely benefits of Obamacare for small businesses are enormous—James Surowiecki,
The New Yorker Magazine, October 2013
• Reality…
• "There is little evidence … Health Care Reform has (sic) had a significant impact on the job
market," said Mark Zandi, chief economist of Moody's Analytics, September 2013
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Obamacare and the Labor Market (cont’d)
• Structural Changes in the Labor Market make analysis difficult
• Labor Force Participation Rate Falling
• Retiring Baby Boomers? (Demographics)
• Discouraged Workers? (Economics)?
• Obamacare (Legislation and Policy)?
• CBO estimate: 2.3 fewer full-time workers by
2023, 4 Feb 14 report
• “choose not to work” not lost jobs
(as cited on WSJ.com, 4 Feb 14)
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Obamacare and the Labor Market (cont’d)
New report stokes debate on Obamacare, jobs
Nonpartisan congressional analysts say people will choose
to work less in the coming years because of the new
incentives from the health care law
Report fuels Obamacare debate with estimates of job loss
LOTS OF POLITICS and LOTS OF SHOUTING and SOME ECONOMICS
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Obamacare and the Labor Market
• My view:
• We need to separate health care from employment…an historical accident
• If Obamacare severs the link between health care and employment, then it will provide longterm benefits to the economy and labor market
• If not, then it will likely not achieve its stated goals of expanding health care access while
containing costs
• Some progress of cost containment but too early to declare
victory
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International Comparison of Spending on Health, 1980–2007
Total expenditures on health
as percent of GDP
Average spending on health
per capita ($US PPP)
7000
6000
5000
16%
16
8000
United States
Canada
$7,290
14
Netherlands
Germany
Australia
United Kingdom
12
10
New Zealand
4000
8
3000
6
$2,454
2000
4
1000
2
0
0
1980 1984 1988 1992 1996 2000 2004
8%
United States
Germany
Canada
Netherlands
New Zealand
Australia
United Kingdom
1980 1984 1988 1992 1996 2000 2004
Note: $US PPP = purchasing power parity.
Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).
Overall Ranking
Country Rankings
1.00–2.33
2.34–4.66
4.67–7.00
AUS
CAN
GER
NETH
NZ
UK
US
OVERALL RANKING (2010)
3
6
4
1
5
2
7
Quality Care
4
7
5
2
1
3
6
Effective Care
2
7
6
3
5
1
4
Safe Care
6
5
3
1
4
2
7
Coordinated Care
4
5
7
2
1
3
6
Patient-Centered Care
2
5
3
6
1
7
4
6.5
5
3
1
4
2
6.5
Cost-Related Problem
6
3.5
3.5
2
5
1
7
Timeliness of Care
6
7
2
1
3
4
5
Efficiency
2
6
5
3
4
1
7
Equity
4
5
3
1
6
2
7
Long, Healthy, Productive Lives
1
2
3
4
5
6
7
$3,357
$3,895
$3,588
$3,837*
$2,454
$2,992
$7,290
Access
Health Expenditures/Capita, 2007
Note: * Estimate. Expenditures shown in $US PPP (purchasing power parity).
Source: Calculated by The Commonwealth Fund based on 2007 International Health Policy Survey; 2008 International
Health Policy Survey of Sicker Adults; 2009 International Health Policy Survey of Primary Care Physicians;
Commonwealth Fund Commission on a High Performance Health System National Scorecard; and Organization for
Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).
Conclusions
What we see today is an American economy that has boomed because
of policies and developments of the 1950s and '60s: the interstatehighway system, massive funding for science and technology, a publiceducation system that was the envy of the world and generous
immigration policies. Fareed Zakaria, 2011
Jobs are central to the American Dream. Nancy Pelosi, 2012
Education is the passport to the future, for tomorrow belongs to those
who prepare for it today. Malcolm X, 1964
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Conclusions
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One More Thing… (NY Times 12 Feb 14)
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A task…
Please form into groups and consider the following:
Given the strong connection between jobs and education
in the US, what changes (if any) do you think American
education should pursue to enable the maximum number
of young people to enjoy opportunity, satisfaction and
financial security in the job markets of the future?
Please discuss for about 5 minutes.
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Related task
A remark by President Obama at his latest State of the Union Address:
“But I promise you, folks can make a lot more, potentially, with skilled
manufacturing or the trades than they might with an art history
degree. Now, nothing wrong with an art history degree - I love art
history. So I don't want to get a bunch of emails from everybody.“
Should we encourage our youth to pursue practical educations and
discourage them from the liberal arts?
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