March 16, 2004

• This was an interesting article to read and I'm glad to finally read an article from someone who did some number crunching. I graduated college almost a year ago and just within the last few months was hired in a salaried position that still pays less than I should be making. I should be grateful though. There are people working here for the same pay that have Master's Degrees. Although only 5.6% are defined as unemployed, the number that aren't working or are working for less than they are worth makes the situation look much worse. Thanks for the link.
• Well, if the unemployment rate in recent history (say 20 years) has always been measured that way, then 5.6% is still a valid measure for our purposes. The idea is not to be able to determine the exact amount of people who are out of work, but to be able to compare it to how it was 5 or so years ago, for example. However, if there's been a recent change in how we analyze such things, and the new categories have been tacked on in order to lower the unemployment rate, well, that's just not right. Also, it's worth looking into the comparison of the marginal and discouraged statistics versus recent history as well, as they'll have their own stories to tell us.
• Good point Sandspider. I didn't think about it that far into the analytical.
• Sandspider Your point is valid but tangential. The key here is not what the concerned govt. agency measures or reports, but what and how the administration du jour presents to the public. Maybe all these categories have always existed, but the administration is sticking to the category where they are seen as not too bad compared to previous administrations.
• I graduated college almost a year ago and just within the last few months was hired in a salaried position that still pays less than I should be making. I should be grateful though. There are people working here for the same pay that have Master's Degrees. No offense, sciurus, but you're making *exactly* what you should be making, because that's the way the market for labor (yours, basically) works. You are paid what the market for your services will bear - if you are underpaid, other employers are out there that will pay you more; if you are overpaid, well, count your blessings :) Don't feel badly, though, that you're not making as much as you feel you should with your degree - EVERYONE feels that way. One year out of college is a troublesome time, since basically what you are is overqualified in education but underqualified in experience. And most employers care more about the latter than the former. But what you are doing is gaining that experience, by working the job you are in - 2-5 years down the road, that will pay off for you. It happens that way to almost everyone, sciurus. As far as the employment rate, keep in mind that employment is a trailing indicator of the economy - the economy has to be doing, if not well, at least better, for a while before companies will start hiring again. Last year was a good, solid up-year for the market, so this year we ought to see more hiring. And long term, we post-baby-boomers are going to enjoy some significant employment freedom, I think. Remember the late 90's, when people jumped from job to job because times were flush and people with skills were scarce? When the baby-boom retirement really gets going, you're going to see bazillions of people dropping out of the labor market. That'll create scarcity in that market the likes of which we've never seen, and that means that wages, as well as opportunity, will increase dramatically. Employment today? Admittedly kinda sucky, but nothing earthshattering in the grand scheme of things (we have gone through several periods of worse unemployment rates, these are actually, iirc, *typical* unemployment rates, they just seem humongous because most of us are comparing against the near-full employment we as an economy enjoyed in 97-99). And the economy is picking up, so increased hiring cannot be far behind. Politicians will always seek to spin the numbers fore and aft to suit their purposes, and overstate their own contributions to the health of the economy, both of which should be taken with asteroid-sized grains of salt.
• And the economy is picking up, so increased hiring cannot be far behind. Fes, I've been hearing this longer than I care to think about. Yes, in the grand scheme of things, employment today may seem kinda sucky. But in *my* grand scheme of things, it's downright awful. I've been out of work since Sept. and feel very fortunate to have gotten a freelance part time job that keeps getting extended. *Part time* mind you, which makes paying bills difficult right now. When I hear people who keep saying "things aren't really *that* bad" it makes me wonder if they are experiencing it firsthand.
• Well, Sooooz, certainly the phrase "your mileage may vary" is apropos - you're personal unemployment rate is (or at least was) 100%. Mine, since I have not lost my job during the recent downturn, is 0%. But extrapolating a general trend based on either of those numbers is fallacious. Taken to the extreme, imagine the reactions of those unemployed in 1998 - no one could argue that the economy wasn't doing exceedingly well - yet still, some people were out of work, layoffs occurred, companies failed. It was not my intention to diminish the effect of your partial employment - it is a frustrating time, and one that I have had myself in the past. But to say that since you are personally unemployed, the greater economic picture cannot possibly be improving, or that time-tested ideas like that hiring follows increasing profits must necessarily be myths, in my opinion misses the bigger picture.
• I agree with Fes about everybody going through such post-degree employment traumas; I was unemployed for a full year after graduating with a good degree from a top university. Ultimately, the job I landed was one in which my degree was utterly irrelevant (as was any past experience, and job ads like that are Pink Pidgeon-rare). We're the generation who've suffered the hangover of changing times; for our parents, it was a liberation and an expression of great social mobility to go to university, and we've inherited that drive and belief in that system. While instead, employers are now far more interested in direct, relevant work experience, and the concept of universally applicable skills has given way to an increasing demand for specialisation. I have to say that I'm unconvinced by a couple of points in your economic argument, though, Fes. While traditionally employment is seen as trailing the economy, this becomes less and less applicable as Western economies become more and more reliant on service sector jobs. The current American administration's pleas to its populace to go out and spend to 'stimulate the economy' show an appreciation of this, but an unwillingness to engage with its realities. People will not spend freely when they have uncertain job prospects; instead a (roughly) Keynesian model applies, where jobs (and job security) need to be the priority to drive the economy forwards. And I'm also not sure that a sudden drop-out of skilled labour from the economy will be of such a benefit. Short term, to be sure, there may be more jobs going round, with a higher value attached to those who can perform them. But a skill hole in the labour market can only be bad for the economy, making those higher-paid jobs all the more precarious. In case anybody hadn't guessed, I Am Not An Economist. But then, very few economists are either. Hey ho.
• The current American administration's pleas to its populace to go out and spend to 'stimulate the economy' show an appreciation of this, but an unwillingness to engage with its realities. People will not spend freely when they have uncertain job prospects; ...jobs (and job security) need to be the priority to drive the economy forwards. Hear hear!
• You are paid what the market for your services will bear - if you are underpaid, other employers are out there that will pay you more; if you are overpaid, well, count your blessings Thats a good point, but I suppose my dissatisfaction is due to the fact that I had to scrounge for about a year to find a company that was willing to hire a new graduate from a good university. I didn't like 'having to settle' for something that I didn't necessarily want. Especially since when I entered college jobs were a dime a dozen. My complaining is useless though, I'm grateful I have work.
• where jobs (and job security) need to be the priority to drive the economy forwards. Short term positive, long term negative. Say I, as president, have a country with a 5% unemployment rate - I could conceivably go out and manufacture some sort of government company that employed those 5% (WPA sort of thing, perhaps). Suddenly: 0 unemployment. But if that company I created doesn't address very real market demands...? It's just another form of welfare, since to maintain those people in those jobs will require continuing government support until the company attains profitability (if ever). While I agree with you that people who fear that they will lose their jobs would not typically spend windfalls (although you'd be surprised - your average wage-earner often acts with vexing illogic, which is why economics is an art, not a science), the effectiveness of an administration just creating a supply (of labor) in response not to a demand but to a distinct LACK of demand is doomed from the getgo and, in fact, saps tax revenues that might otherwise be put into job-enhancing programs (like, now don't hiss now, lower tax rates for corporations) that will generate longer-term positives. But a skill hole in the labour market can only be bad for the economy, making those higher-paid jobs all the more precarious. Not necessarily, since there are several things that work naturally to ameliorate that effect: First, the flexibility and trainability of the worker, who continually learns new skills as he or she rises toward that skill-hole point in time. Second, the baby boomers will retire in gradients, not all at once, so rather than one colossal hole we'll see a series of smaller (and thereby, more easily filled) holes, at least until the labor pool begins to dwindle. Also: the combined effects of outsourcing and immigration, where skill hole jobs get farmed out to countries that have people with the available skills (or where it's cheaper to train them) and incoming people bolster the pool of available labor to fill the holes.
• Caveat: I am also Not An Economist.
• What I always wonder is - what if our economy is changing at such a basic level that high employment is no longer possible? We have so many labour saving devices, but we don't talk about where that labour is to go to get work and thus money. I supose I sound like a nineteenth century luddite, but I do keep thinking - what if there isn't more work to do, skilled or unskilled? And when do we get that 20 hour week that was predicted in the 70s?
• Who's going to look after all those old boomers? Who's going to build that building, fix your car, shuck your oysters, plumb your house, educate your children, admin your super fund, engineer and construct your transport systems? Who's going to bring us into the hyrogen economy? Who's going to feed you, entertain you, protect you? Workers.
• hydrogen. Yeesh.
• But what happens if the boomers decide to keep working? I know professors in North America are working past 65, much to the detriment of their own graduate students. I guess I just see the economy changing in ways no one, least of all me, understands. The most important part of those figures in the post are the figures that aren't there - the underemployed given too few hours to support themselves, those who have given up looking, the marginalized. When I was unemployed, I wasn't counted in the figures because I wasn't eligible for unemployment benfits (hadn't worked long enough before being laid off). But that didn't mean I didn't have rent. My brother eeked along with 1/2 pay for 18 months because his employers would not give him steady hours. He's now a couple thousand in debt, and his credit is ruined. And he worked in the "booming" service economy. I think about all the things we have done to save labour, including our very questionable North American farming practices, and I think: why are we trying to save so much labour when we need so many jobs? Maybe things will get better in a few years - maybe I am just doomsaying. But I'm old fashioned (like 17th century old fashioned) and I can't help but think of our world as one of finite resources which we are currently burning through in order to save what is a much less finite one: labour.
• The most important part of those figures in the post are the figures that aren't there - the underemployed given too few hours to support themselves, those who have given up looking, the marginalized. Maybe I misunderstand you, but that's what the post is talking about. The _real_ unemployment figures, which include the marginalized and underutilized and discouraged workforce.
• I know professors in North America are working past 65, much to the detriment of their own graduate students. Get out of my way you old fuck! Didn't you promise me a job? Hey, your qualifications will still be of value. You may, however, need to be flexible in considering the options they afford you.
• Wolof: I don't know about where you are, in but here in New Zealand, those 65 year olds claim taxpayer funded pensions and have been voting for policies whose impacts (paying for tertiary education, for example) fall most heavily on younger people. So the 65 year old who prevents me from getting a decent job is also pocketing my paycheck for his expensive healthcare, his pension, and is enjoying the benefits of a free university education that my peers have to pay for.
• Sorry Gyan, yes, I was just reiterating the important part of the post. About the mandatory retirement for university professors: I have no illusions or expectations for my own employment - I already make more money than most people in my family, and that on a scholarship. But there are pronciples at stake. Professors who stay in their positions past 65, at least those with tenure and good pensions, must be aware that they are worsening an already difficult situation in the academic job market. I would love for them to stay on as professors emeriti, but if they do care about the future of the students they profess to mentor, they will not add to the problem by remaining full professors. It just seems a little greedy - like they've had their career, and now they would like part of someone else's as well. Some places deal with this by having mandatory retirement ages, and frankly, maybe we all should respect retirement more than we do. Rodgerd: is that happening in NZ too? It's all over Canada and the UK - baby boomers who went through university on low or sometimes no tuition are happily voting for tuition increases, because you know that if students don't go into bankruptcy for their education, they just won't appreciate it. I wonder if they will also vote to grandfather pensions out after themselves? /bitter twenty-something who watched 50 year old men systematically wage war on her education system for 8 years