
The U.S. Labor Market Isn’t All That Healthy - howard941
https://www.bloomberg.com/opinion/articles/2019-07-01/the-u-s-labor-market-isn-t-all-that-healthy
======
LarryDarrell
>"The shift to lower wage jobs for entire groups of workers is similarly
problematic. Working full time while earning much less than in the past has
profound ramifications. Entire industries have been disrupted, and often
employees find taking a new job in a different sectors leads to near-entry-
level pay -- equivalent to a 30, 40, even 50% salary cut. These folks may be
working full time but they clearly are underemployed relative to their
experience, skills and past work. This is not captured in economic data."

The US is uniquely unable to cope with this outcome. Health Insurance is tied
to employment. Education is costly. Our new mythology of Bootstraps instead of
Social Guarantees. I don't see a new robust and dynamic economy coming to the
rescue. For those of us currently doing well, this ought to be worrying.

~~~
zaroth
If a significant number of people were working now at 30-40-50% reduced wages,
then wouldn’t that show up as a decrease in median household income?

Real median household income is at an all time high, up 13% from 2012-2017.

~~~
ssivark
Isn't this the quantity that has barely risen since 1970 or so (till ~2012),
while productivity has multiplied manifold?
[https://en.m.wikipedia.org/wiki/Middle-
class_squeeze#/media/...](https://en.m.wikipedia.org/wiki/Middle-
class_squeeze#/media/File%3AProductivity_and_Real_Median_Family_Income_Growth_1947-2009.png)

Further, the median can easily mask such changes as underemployment if it
happens in much less than 50% of households, if the "middle class" previously
had a broad base. Basically, the middle of the histogram would continue to
look pretty flat (same median income for the "middle class") while the width
of the flat region would shrink (shrinking middle class).

~~~
zaroth
No, I’m not sure you can reduce wages 30-40-50% for many workers without
moving the median down, unless a similar number of workers on the lower side
had their wages increased 42-66-100% (that would effectively mean two workers
swapping places, which would keep the median the same).

Worth mentioning that the 4th and 5th Quintiles have either not grown at all
(in real terms) or even slightly fallen.

Of course compared the the 1st quintile and Top 5% everyone else has been
totally screwed.

I think the narrowing of the middle class has more to do with the dramatic
rise in housing, education, and health care costs than it does with wages.

[https://www.advisorperspectives.com/dshort/updates/2018/10/1...](https://www.advisorperspectives.com/dshort/updates/2018/10/16/u-s-
household-incomes-a-51-year-perspective)

~~~
echaozh
Median is not mean. If everyone under the median suddenly gets no pay at all,
or anything under, the median doesn't change.

~~~
sytelus
Median guarantees that at least half of the population has income increased.
Mean is unreliable to make any such guarantees. Bill Gates walks in to bar and
everyone is millionaire on average.

------
dcolkitt
Male labor force participation has been steadily dropping since 1950. This was
masked by the entry of women into the labor force between 1950 and 1990. But
that process has been saturated for thirty years, whereas male participation
keeps failing. That means that absent a major shift, the overall participation
rate will continue to decline.

The point is this is a half century trend, much too long to have anything to
do with the business cycle. Yes labor force participation today is much lower
than the expansions of yesteryear, but that doesn't tell us anything
particular about this cycle. Almost assuredly 10-20 years from today labor
force participation will be even lower than it is today, even at the peak of
the next expansion.

[1]
[https://fred.stlouisfed.org/series/LNS11300001](https://fred.stlouisfed.org/series/LNS11300001)
[2]
[https://fred.stlouisfed.org/series/LNS11300002](https://fred.stlouisfed.org/series/LNS11300002)

~~~
rayiner
It’s better to look at prime age participation rate (25-54):
[https://www.bls.gov/emp/tables/civilian-labor-force-
particip...](https://www.bls.gov/emp/tables/civilian-labor-force-
participation-rate.htm). Among men it’s down from 91.8% to 88.5% since 1996.

~~~
Balgair
That's a very interesting chart to look at! Thank you.

One thing to look at is the projected rates in 2026. Non-hispanic white males
are projected to be at 64.5 percent in the labor participation rate. This is
in part due to the aging of the Baby boomers out of the work force. Still,
that means that 1 of 3 non-hispanic white males will not be working and I
don't see any reason for the trend to change.

Also, the maximum outflows for Social Security are expected to be in ~2030
[0]. The presidential election cycles are 2020, 2024, 2028, and 2032.

Lastly, the projected temperature of the Earth is expected to be ~0.3 degrees
C higher in 2030 than it is today. For reference in terms of the possible
effects of climate changes on human politics and government, CrashCourse
recently did a good episode on the 17th Centrury Crisis where global
temperatures _fell_ ~0.5 degrees C [1,2]. TLDW: things were _really_ bad.

[0]
[https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1.html](https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1.html)

[1]
[https://www.youtube.com/watch?v=cmKHYpC_jVs](https://www.youtube.com/watch?v=cmKHYpC_jVs)

[2]
[https://en.wikipedia.org/wiki/The_General_Crisis](https://en.wikipedia.org/wiki/The_General_Crisis)

------
thorwasdfasdf
First of all the U1 unemployment numbers are bogus. Look at the U6 numbers if
you want a better picture of the truth. those show unemployment at 7-8%.
Anecdotally, amongst my MBA friends, their unemployment level collectively
seems to be about 30%.

If you look at where all the jobs are, it seems to be they're all in low cost,
low skill areas: waiting tables, dishwasher, etc.

~~~
kkwteh
That 30% MBA unemployment figure is much more striking to me than the article.
Any thoughts as to why your friends can't find jobs? Where were they planning
on working?

~~~
rmah
My guess is that they got their MBA from lower tier university. One of the
dirty secrets of MBA programs is that only MBA's from top tier schools
(Harvard, Stanford, Wharton, etc.) have significant positive value. The ones
from the 2nd tier MBA programs _might_ be worth what they cost if you have
reasonable industry experience prior to going for it. Other MBA programs are
about as valuable as an undergrad degree in "business". Note, I'm not
commenting on the quality of education -- I'm sure many less prestigious MBA
programs provide a great education. I know this sounds harsh and insensitive,
but from my experience, it is the way it is.

~~~
jcadam
I got an MBA (not from a top school) back in 2010. It has not changed the
trajectory of my career in any way as far as I can tell.

I'm a 39 year old Senior Software Engineer. My BS in Computer Science has done
much more for me, obviously. In fact, sometimes I forget that I have an MBA
until someone corrects me when I fail to mention having a Master's degree, or
calls me out for saying something derogatory about people with MBAs :)

------
castlecrasher2
After the list of "what a healthy worker economy looks like" bullet points I
expected some data to show these aren't the case but was disappointed to not
find them. As is the case with many articles like this, I can only assume that
making the case with words alone means the data does not support their
conclusion.

------
icebraining
> The gig economy was supposed to create lots of well-paying, independent
> jobs;

I hate this kind of revisionism. The gig economy was never some sort of
political plan that promised anything. It was just the name given to the
increasingly common work model. In fact, "creating jobs" was pretty much the
_opposite_ of the gig economy.

~~~
CodeMage
I don't think it's revisionism. I think it's an accurate description of the
hype that surrounded the gig economy. That's what everyone used to parrot in
defense of borderline illegal "disruption" by Uber and such.

To quote Ronald Wright, "Socialism never took root in America because the poor
see themselves not as an exploited proletariat but as temporarily embarrassed
millionaires." The gig economy is just a new way of exploiting that mindset.

~~~
jressey
The quotation gives "The Gig Economy" active voice. The author is saying those
who enacted the economic model had the intention of creating those well paying
jobs. They obviously never had any intention like that. That statement is
revisionist.

~~~
basch
The American Dream promised = the american dream was a shared belief and
mindset.

Its not so much saying the gig economy was an actor with its own agency, there
is an implication that the gig economy was a shared perspective of hope.

~~~
nostrademons
I never observed that shared perspective of hope in Uber drivers I rode with,
though. It was always a means to an end, not the means to the end. If people
thought they were going to end up with a better life, it was because they were
finishing their master's degree, or running a software business, or just
wanted to stay in the U.S. while their kids got acculturated and educated.
Uber was a way to rack up some extra spending money in the meantime. Nobody
I've met was under any illusions about their ability to get rich off Uber,
except maybe the Uber employees with stock options.

~~~
basch
I do think the promise was "easy money on your own time, be your own boss."
Something you could do to fill the cracks, without getting a second job. Every
uber driver ive ever talked to about it says one of the main reasons they do
it is being able to choose when to work.

------
austincheney
> The gig economy was supposed to create lots of well-paying, independent
> jobs;

Instead it has created companies that vacuum investment cash with no hope of
profit and an army of depreciated labor. The economy would be better off if
investors saw a return on their investment and if 20% of the gig labor force
were suddenly unemployed provided that the freed labor wages are redirected to
the remaining 80%.

~~~
mdorazio
I'm trying to figure out why the author thinks the gig economy was supposed to
create good jobs. It was supposed to create ways for people with free time to
earn a side income at around minimum wage, but with more flexibility. The
phenomenon of gig jobs getting turned into full time occupations points to how
bad the rest of the labor market is for many people.

~~~
daveslash
I'm not sure that it was ever _explicitly_ stated that it was supposed to
create jobs, and I never expected or claimed that it would. That said, what
I'd like to add is this: a few years after the recession people who were still
feeling the employment effects were certainly looking towards the growing gig
economy with high hopes that it would create jobs for them. I don't have hard
supporting evidence; that position anecdotal and based off conversations with
people at that time. I also think that (depending on what sources you read)
many journalists capitalized on this to talk up the hype.

~~~
mdorazio
Thanks for the response. 100% agree that when gig jobs started picking up, a
lot of people were very hopeful about it, especially journalists. But I think
a lot of the hope was only on the naive underemployed person side, not on the
gig _employer_ side, where the business models can only work with extremely
cheap labor (if they work at all).

------
supernova87a
Well, I have long had misgivings about policymakers focusing on single stats
as their optimization function.

"Employment" means a lot of things, and a government focused on that
simplistic number will probably not produce long term what you want. And we
have not incentivized our policymakers / government to do anything but pay
attention to that single number. As soon as a politician can claim # of jobs
increased, it's as if that alone is great.

What about: \- the quality of the job \- the pay of the job \- the
sustainability of the job / industry \- where that work takes us as a country
strategically?

So here you have people being told that jobs are being created left and right.
But scratch even a little bit and you find that they're not very good jobs. Or
they're jobs that are strategically not going to help us in the long run.

------
pattisapu
Interesting facts cited in the academic paper [1] linked in the article:

\- Black Americans report significantly more optimism as to their careers and
the economy than white Americans; Hispanics polled report something in between
those groups.

\- Poor Americans score lower than their counterparts in Latin America.

[1]
[http://www.dartmouth.edu/~blnchflr/papers/jelit%20paper.pdf](http://www.dartmouth.edu/~blnchflr/papers/jelit%20paper.pdf)

------
usbseeker
It was only the marketing plan of a few companies that stood to profit from
it.

------
jazzyk
The only statistics which needs to be looked at is here:

Bureau of Labor Statistics: Civilian labor force participation rate

[https://data.bls.gov/timeseries/LNS11300000](https://data.bls.gov/timeseries/LNS11300000)

Let the data speak for itself.

~~~
larkost
A complicating factor not addressed in that graph is the aging of the U.S.
population. I don't have great numbers immediately available, but it looks
like over that same period of 10 years the population over 65 has grown from
about 40million to 50 million. Those people are still considered in that graph
as not participating.

~~~
jazzyk
Nope - the statistics only covers working age (18-67)

------
taiwanboy
I think it’s quite telling about the bias of hacker news users that this
posting is alive and well on top of the first page, whereas a posting about US
having the longest economic expansion in history, that was on the front page a
few hours ago, was flagged and now gone within minutes of reaching top 10

~~~
Stryder
What does that tell us? That HN trends pessimistic? That the HN audience is
under-employed? Or something else?

~~~
bmmayer1
I may be reading in between the lines but I believe OP's point is that HN
leans more liberal which in today's political climate means more receptive of
negative economic news (thus necessitating more intervention / change of
government control) rather than positive economic news.

But again this could be way off base.

~~~
rootusrootus
HN may lean liberal, but that would be primarily because half the commenters
here are from western Europe, where even the conservative politics are
frequently liberal by US standards.

~~~
rc_kas
Partially. Also partially because HN users are younger, and younger people
tend to hate Republican ideas.

~~~
dsfyu404ed
Younger and on the coast. West of I95 and East of I5 you'll find plenty of
young people who may find certain social policy points dated but generally
agree with republican ideas.

Actually, there was an article on the front page earlier today talking about
this phenomenon (social filter bubbles) but it's long gone because everyone
was complaining it was a dupe. Go figure.

