Posts tagged ‘jobless recovery’

May 26, 2015

Has the underemployment rate topped out?

by Grace

Has the trend of rising underemployment rates for new college graduates finally turned a corner?

20150521.COCCollegeGradUnderemploymentChart1

While unemployment rates improved over the last few years, underemployment rates have only started to drop more recently.

The unemployment rate for recent college graduates began to fall in 2011, and it has continued to do so—with a hiatus during 2013—ever since. However, aside from a brief dip in early 2011, the underemployment rate continued to climb well into 2014, rising to a level of more than 46 percent. This divergence between falling unemployment and rising underemployment between mid-2011 and mid-2014 suggests that more college graduates were finding jobs during this time, just not necessarily good ones. The steady growth of non-college jobs, coupled with the relatively soft demand for college graduates during this three-year period, appears to have forced many recent college graduates to take jobs not commensurate with their education. More recently, though, the tide has turned. With the demand for college graduates rising at a solid clip since last summer, underemployment has also finally started to come down. Since last June, the underemployment rate for recent college graduates has fallen by about two percentage points, to 44.6 percent.

The underemployment rate is still historically high.

While these trends are no doubt good news for recent college graduates, it is important to keep the gains in perspective. As we have shown before in this post and this article, the underemployment rate for recent college graduates remains quite high by historical standards. At 44.6 percent, we estimate that nearly half of this group is working in jobs that typically do not require a college degree—a rate that is much higher than when underemployment hit a trough of around 38 percent in 2000. And while the demand for college graduates appears to be picking up, significant labor market slack remains, so continued strong growth in the demand for college graduates may well be necessary to make a more serious dent in the underemployment rate.

The Washington Post has an optimistic view.

Why the era of college grads working at restaurants and cafes is coming to an end

For now, I’ll wait and see.

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Jaison R. Abel and Richard Deitz, “The Class of 2015 Might Have a Little Better Luck Finding a Good Job”, Liberty Street Economics, May 15, 2015.

March 27, 2015

Achievement gap cripples opportunities for minorities in nation’s increasingly diverse workforce

by Grace

The stark differences that show blacks and Hispanics trailing in academic achievement indicate a growing problem for our country’s future economic health.

Primary working-age population in the United States will experience a net loss of 15 million whites between 2010 and 2030.

Who has the skills to prosper, or even survive, in our knowledge economy?

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By 2044, people of color will account for a majority of the U.S. population. In the newest Brookings Essay, Jennifer Bradley examines efforts in U.S. metropolitan areas to prepare a more diverse workforce, with a particular focus on Minneapolis-St. Paul.

Minnesota reflects the achievement gap common throughout the United States.

With most of the future growth in the labor force coming from people of color, it’s alarming to have to acknowledge how profoundly the existing education and training systems have failed them. Statewide, 85 percent of whites graduated from high school on time in 2013, compared to 58 percent of Hispanics, 57 percent of blacks (including both U.S.-born African-Americans and African immigrants), and fewer than half (49 percent) of American Indians. The gaps are slightly larger at the metropolitan level, and wrenching for the largest city, Minneapolis, where just 51 percent of Africans, 41 percent of Hispanics, 40 percent of African-Americans, and 34 percent of American Indians graduate from public schools on time.

Business leaders have become heavily involved in trying to find solutions.

It’s a matter of pure business necessity. “This is not just about charity or being nice to people of color.”

Some employers have initiated training programs geared toward helping low-skills workers develop into self-sustaining employees.  But that doesn’t blunt the recognition that K-12 education is at the core of any solution.

Still, Rybak understands that it all comes back to education. To take on leadership positions and help companies compete globally and engage with many different cultures, children first need to succeed in primary and secondary school, which is why, after his last term as mayor, Rybak signed on as executive director of Generation Next. This is a coalition of leaders from universities, city and county governments, city school systems, major companies, local philanthropies, and non-profit organizations who came together in 2012 to try to eradicate the achievement gap among students in Minneapolis and St. Paul. He sees the education gap as the hardest thing to overcome in the region, and also the most important. Fortunately, the interest in doing something about it crosses party lines. Republicans who control the state House of Representatives have called for education reform to help deal with the gap, and the head of the state Republican Party calls it “arguably the defining issue of our time in Minnesota.”

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Jennifer Bradley, “The Changing Face of the Heartland: Preparing America’s Diverse Workforce for Tomorrow”, Brookings Institution, March 17, 2015.

 

March 24, 2015

Are older workers crowding out job opportunities for young people?

by Grace

Older workers’ expanding participation in the labor force may be at the expense of employment opportunities for younger workers. 

One of the major trends in the U.S. workforce during the early 21st century is seniors’ expanding participation in the labor force. People who qualify for AARP membership have been retiring later and are more likely to be in the labor force now than people the same age were during the 1990s tech boom.

There have been significant changes for all seniors, but the increase is most striking among people 65 and older. For 75-year-olds, labor-force participation has risen to 14 percent from 9 percent since 2000. The number of people age 65 to 79 in the workforce has grown by 3.5 million. Of that, 1.6 million is due to the growing population in that age group, and 1.9 million is due to the increased propensity to work.

Employment helps seniors remain self sufficient.

The United States is going to be a very different place, demographically, for the next 30 years. Seniors putting in more years at the office will help ease that transition, cover a small part of Social Security’s deficit, and allow more older Americans self-sufficiency in their retirement.


The sliding labor participation rate for younger workers is clear.

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The question remains how much this affects younger workers who are still suffering during this jobless recovery.

…workers 55 and under still have about 2 more million jobs to go before they recover all the jobs losses since the start of the great global depression …

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Salim Furth, “What Percent of 75-Year-Olds Are Still Working?”, The Daily Signal, March 21, 2015.

Tyler Durden, “Old vs Young: The Story Of America’s Two Labor Markets”, Zero Hedge, January 9, 2015.

September 10, 2014

The jobless recovery in one chart

by Grace

An illustration of our jobless recovery from economics professor Mark J. Perry

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Bottom Line: The US has been producing new record-high levels of GDP in almost every quarter since Q3 2011, and we are now producing 7.65% (and $1.14 trillion) more real GDP today than in late 2007. But we are producing that record-setting level of real output with a quarter-million fewer workers than in 2007. One explanation for America’s record-high output with 227,000 fewer workers is that the Great Recession facilitated what might be one of the greatest expansions of worker productivity in US history. The fact that we’ve been able to greatly expand national output with fewer inputs (workers) represents a huge increase in economic efficiency, but has also left us with a lingering “jobless recovery” and an economy that is struggling to create new, post-recession employment opportunities for millions of Americans.

Labor force participation remains low.

Perry explains that he is using the “more comprehensive measure of total civilian employment” instead of the total payroll number, which recently climbed up to pre-recession levels  However, his bigger point is supported by the troubling increase in the working age population during that time.

As good as that might sound, surpassing the previous high-water mark in terms of payroll employment is cold comfort for recent graduates and other new entrants into the work force, as well as for the legions of Americans who lost their jobs in the Great Recession. While payrolls may be back to where they were before the downturn, the working age population has risen by roughly 15 million over the same period.

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Mark J. Perry, “The current state of the US economy in one chart”, Carpe Diem, September 5, 2014.

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