
Say Hello to Full Employment - jchrisa
https://www.theatlantic.com/business/archive/2018/07/hello-full-employment/564527/?single_page=true
======
spir
This article seems to use the terms "unemployed" and "jobless"
interchangeably.

People who stop searching for jobs (eg. due to despondence or poor health) are
excluded from the official unemployment rate, yet they are jobless.

On a recent EconTalk, Edward Glaeser, the Fred and Eleanor Glimp Professor of
Economics at Harvard, said, in their recent sample, 11.9% of U.S. men aged
25-55 have been jobless for over 12 months.

From quick googling, 11.9% of U.S. men aged 25-55 is about 7.5 million people.

[http://www.econtalk.org/archives/2018/03/edward_glaeser.html](http://www.econtalk.org/archives/2018/03/edward_glaeser.html)

~~~
tmpz22
I can't help but feel the unemployment rate is so politicized that its facts
and statistics will continue to be cherrypicked outside of reality.

~~~
dev_dull
Is it called the Wells Fargo effect now? When you optimize for a number,
you'll get that number -- and it will deceive you.

~~~
gdix
[https://en.wikipedia.org/wiki/Campbell%27s_law](https://en.wikipedia.org/wiki/Campbell%27s_law)

~~~
azernik
A special case of Goodhart's Law, as applied to public policy.

------
sbjs
"For the first time in recorded history, the number of job openings is higher
than the number of people looking for a job."

So what? If there's a thousand Node developers like me looking for work, and a
thousand job openings for dentists, that's a mismatch. You may say beggars
can't be choosers, but do they expect Node developers who went through CS
courses to throw that away and take dentist courses?

~~~
wgerard
The openings seem to be largely in trades or nonskilled labor:

> Competition for workers has gone crazy, Joe McConville, who co-owns a
> popular chain of made-from-scratch pizza restaurants, told me. “At almost
> every restaurant that I’ve worked at, you always had a stack of applications
> waiting,” he said. “You’d call somebody up and half the time they're still
> looking for an extra job. That’s not happening anymore.”

> “There are not a lot of welders sitting around looking for work. The
> construction trades, the roofers, the framers, the dry-wallers,” said Dan
> Culhane, the president of the Ames Chamber of Commerce. “Those are
> [workforce] challenges that Ames and Story County and Des Moines face.”

> The trucking industry is instructive here: Trade groups have argued that it
> is facing a shortfall of 51,000 workers, yet businesses have not yet shown
> much willingness to cut hours, boost pay, and improve conditions to lure
> workers in.

~~~
lainga
The last sentence is the big problem. I feel like a lot of industries didn't
just make the best of the advantageous labour market in the last 10 years,
they reshaped themselves to become dependent on it (i.e., on cheap and easily-
replaced human capital). Now that labour's tight again, they're finding that
they've worked themselves into a hole they can't get out of.

~~~
adventured
Business just got a massive tax cut. They can dig themselves out by spending
on increasing productivity and paying higher wages. The economy needs to be
run very hot for an extended period of time, instead of getting crashed by an
obnoxiously over-eager Fed that likes to kick the economy into a recession to
dampen wage growth for the benefit of businesses in the guise of controlling
inflation.

Businesses need to be made to squeal in pain here. Run the economy as hot as
we can get it for as long as we can and shove wages through the roof at the
cost of business margins (which were just considerably boosted via the tax
cuts).

If the Republicans and Democrats weren't collectively so stupid, they'd be
cooperating on hammering out a massive infrastructure spending plan paid for
by a trillion dollars printed by the Fed across 10-15 years (or similarly
constructing an infrastructure bank filled courtesy of abusing the global
reserve currency while we still have it). And doing that would juice things
that much more right now and for the next decade.

~~~
tonyedgecombe
Not much point increasing wages if you are just going to erode them with
inflation.

~~~
saas_co_de
The myth of the link between rising wages and inflation is very common in the
media, but there is hardly any connection in reality.

Wages will naturally adjust to the equilibrium supply and demand. If the
needed increase in wages to increase production pushes prices up such that
supply falls then production will be cut to adjust. That is what actual
economic theory says.

In the real world their is a lot of lag, so some market participants will be
increasing wages and producing too much, and then they lose money, and have to
overcut on the other side, but in a massive diverse economy this random noise
balances out.

The market will never over price labor, therefore inflation cannot come from
increasing wages.

Inflation comes from printing money (or creating it digitally since we don't
actually print any more). When the inflation from printing money results in
rising wages, then that is a sign to the bankers that they should cut back so
that they can keep the poor in line, and keep them from paying off their loans
so that they can't get out of debt.

Real world economics.

~~~
tonyedgecombe
Yes, I was thinking about the comment _" a trillion dollars printed by the
Fed"_ when I posted my reply.

------
crb002
Des Moines resident. "Full" just means that the number of minimum wage jobs
exceed the number of those unemployed. Software industry here is total crap.
Only large tech employers are Principal, Wells Fargo, DuPont, John Deere.

Principal will tank when the market drops (company almost tracks large index
funds), they have already hearded most employees into shared community desks
like cattle with draconian policies against any personal items or even paper.

DuPont is about to be eaten alive by State funded Chinese seed corn.

John Deere is at an inflection point where they need massive RD spending in a
bad economy. Either they ship autonomous bots for seed/weed/feed or they
become a dinosaur.

Wells Fargo ... isn't exactly the most ethical corporation.

~~~
jimmy1
> Only large tech employers are Principal, Wells Fargo, DuPont, John Deere.

Those are pretty impressive honestly.

Wells Fargo is 2008 Bank of America. They will do everything they can to
improve their image -- good time to join actually, IMO.

DuPont will be fine. JD can become a dinosaur and still live another 50+ years
on name alone.

~~~
TACIXAT
I've heard John Deere has a lot of self-driving / automation for their farm
equipment. That sounds like it would be interesting.

------
saudioger
We're also 9 years away from the end of the last recession.

The longest we've gone without a recession in the past 100 years is 10 years.

~~~
shams93
Goes to show that Obama did much better than he was often given credit for.
While Obamacare fell fall short of the medicare for all that is needed by
business - imagine not having to worry about covering healthcare for employees
for your startup - his overall job of captaining the ship through incredibly
hard times was very successful.

~~~
canada_dry
This.

Sadly, it's highly likely that the current administration will - of course
take credit - but more importantly - reap all the rewards (i.e. votes) in the
next federal election.

I still am amazed at how Obama pulled the US from the brink of utter financial
collapse shortly after taking office. Hopefully the next incoming
administration will be as lucky.

~~~
ww520
The financial rescue and QE happened in 2008 while Bush Jr. was in office.

~~~
pedasmith
You might remember that Bush agreed to making a brand-new "Office of the
President-Elect" just so that there could be a single plan of action.

------
mmt
> Yet the experience of towns like Ames and Des Moines show that such “labor
> shortages” might be due to insufficient wages and crummy working conditions
> — not an unwillingness of workers to switch industries or improve their
> skills for a job.

I think this sentiment has been repeated time and again here on HN.

I suspect the tech community is particularly attuned to it, as our sector has
something like this employment situation even when the economy as a whole
isn't doing as well.

------
joefranklinsrs
There are some other great numbers with respect to this full employment

\- In 2017 the combined reshoring and related foreign direct investment (FDI )
announcements surged, adding over 171,000 jobs in 2017. he U.S. had gone from
losing net about 220,000 manufacturing jobs per year at the beginning of the
last decade, to adding net 30,000 jobs in 2016.
[http://reshorenow.org/blog/reshoring-initiative-2017-data-
re...](http://reshorenow.org/blog/reshoring-initiative-2017-data-report-
reshoring-plus-fdi-job-announcements-up-2-800-since-2010/)

\- Within the United States, growth also has become more balanced across
industries. As in past years, the service sector, supported by growth in
employment and real wages, has grown steadily with increases in retail trade,
business services, personal services and construction activity.
[https://digitalcommons.unl.edu/bbrbin/166/](https://digitalcommons.unl.edu/bbrbin/166/)

\- Job-hopping increases, in possible boon to wage growth and productivity
[https://www.wsj.com/articles/in-this-economy-quitters-are-
wi...](https://www.wsj.com/articles/in-this-economy-quitters-are-
winning-1530702001)

------
throawawy3242
And here I am. Laid off after 2 months, among hundreds of workers, and unable
to find employment. Someone tell me more about these "more jobs than people"
again. BTW I have a B.S in Computer Science and living in the USA.

~~~
jcims
Since you're using a throwaway, could you provide some real details to back
your statement? E.g. experience level, skill sets, region, jobs you aren't
interested in applying for, what kind of things that you think could make the
situation better for you, willingness to relocate, willingness to accept a
shit job with a good company to work your way to a better job, etc?

I ask because my mom is a 68 year old woman with a high school education in a
rural community and she's had probably 6 jobs in the last two years. They
aren't awesome paying jobs but at least half of them were full time and enough
to squeak by. She just tries them on for size and quits them if they don't
fit. Definitely a job hopper, but I don't understand how she can get so many
jobs in a depressed area in the midwest and folks like yourself remain
unemployed.

------
zeth___
Looking at statistics instead of stories:

[https://fred.stlouisfed.org/series/IAPCPI](https://fred.stlouisfed.org/series/IAPCPI)

In Iowa 2008 was the biggest drop in nominal personal income since 1955. The
period 2009-2017 had the slowest nominal personal income growth since the end
of the great depression in 1931. 2017 was one of 3 years to record negative
income growth in the last 50 years (2008, 1993).

This all speaks of a labor market working far beneath capacity, one that
hasn't yet made up the loss of income from the last recession. One no where
close to full employment which leads to constant and substantial overall
income gains.

~~~
mmt
Interestingly, of the neighboring states, only SD exhibits the same shape of
curve (although NE is close, with a decreasing of the slope at the end, like
KS, which is nearby).

It certainly doesn't seem like full employment, but it also doesn't seem like
it can be extrapolated to the other 99% of the population in other states (not
that I'm saying that's what you were implying).

------
bayfullofrays
I hate these kinds of numbers because they hide the fact that most of these
jobs do not provide a living wage.

~~~
Veelox
Hey, how about instead of requiring employers to pay more we reduce the cost
housing, medicine, and schooling which are the biggest drains on people
expenses.

~~~
s73v3r_
That doesn't make a lick of sense. Why are employers entitled to cheap labor?

~~~
Veelox
The same reason that landlords are entitled to expensive rent, doctors to high
salaries, and colleges to high tuition. Its the market rate for those things.
I would say there are much better second order effects from focusing on
bringing prices down than the second order effects of focusing on forcing
employers to pay more.

~~~
49531
I don't think the market explains most of those things. College tuition isn't
because there is a short supply of educators and high supply of people wanting
to be educated. There's not much scarce about it. I would argue that tuition
increases because we've streamlined student loans and marketed college as a
tool of mobility. Doctor pay is also highly abstracted from something like
"market forces". Rent prices are probably the closest thing to a commodity
determined by market.

Also, forcing employers to pay more is actually a supply/demand conundrum. If
you want to buy unskilled labor for $8/hr but the going rate is $15/hr you're
not going to have much luck.

~~~
Veelox
I feel like we are strong agreeing. If we change the how student loans worked
we could reduce the rate of increase. If we changed out medicine worked we
could bring down prices (currently there are way to many links in the chain
all making a buck). Also, if we allowed more housing to be built, prices would
go down.

>Also, forcing employers to pay more is actually a supply/demand conundrum. If
you want to buy unskilled labor for $8/hr but the going rate is $15/hr you're
not going to have much luck.

The issue I have is most people who want a living wage, want to be done by
setting the minimum wage so that a 40 hr week job gets you their. The causes
lots of problems because it eliminates everyone from the labor market that
cannot produce that much value. So in the end, you negatively impact the
young, the old, the disabled, those who want to work part time, even ex-cons
by setting minimum wage at a living wage value.

~~~
s73v3r_
I cannot disagree more. It's a "minimum wage". What good is it if it's not a
living wage? What's the point of having a minimum wage that one cannot survive
on?

~~~
Veelox
Honestly I would be fine with no minimum wage. I also tend a little more
libertarian than most. I am fine with the minimum wage setting a floor to how
much people are paid because it cuts down on explotive practices.

That said, putting the minimum wage to an amount that is surviable at 40 hours
a week removes people on the margins that would benefit from a job that paid
these than a living wage. Note I am taking as a given that a business will
only employe someone if they on average produce more benefit than they cost.

Two examples of people on the margin that would otherwise be priced out.

Frank is retired and draws social security he is old and doesn't move as fast
any more. He gets a job with the park service cleaning/resetting campgrounds.
He enjoys being outside, interacting with campers, and the extra money is
nice. Since the service pays per spot cleaned, Frank will never make a living
wage. I think Frank should be able to take this job.

James just got done serving 5 years for felony distribution of crack. Seeing
his son only once a month has made James decide to go on the straight and
narrow from now on. As an ex-con it is hard for him to find a job. In fact
because ex-con tend to be bad employees most business don't bother. If there
was no minimum wage a business could hire James at a rate of the average ex-
con and he could prove himself a good worker and move to a better paying job.
I think such a job should exist for James.

I think these are two examples of productive economic activity that would
otherwise be impossible if the minimum wage was set to a living wage.

~~~
s73v3r_
"Honestly I would be fine with no minimum wage"

With all due respect, that's probably because you're not someone who's having
to survive on it.

"That said, putting the minimum wage to an amount that is surviable at 40
hours a week removes people on the margins that would benefit from a job that
paid these than a living wage."

I don't believe that population is significant, or more significant than those
that do need it to be a living wage.

"James just got done serving 5 years for felony distribution of crack. Seeing
his son only once a month has made James decide to go on the straight and
narrow from now on. As an ex-con it is hard for him to find a job. In fact
because ex-con tend to be bad employees most business don't bother. If there
was no minimum wage a business could hire James at a rate of the average ex-
con and he could prove himself a good worker and move to a better paying job.
I think such a job should exist for James."

I do not believe that having a non-living wage job would help, because James
would still need to survive, and on a non-living wage, he's going to have to
supplement that income somewhere. A better thing for James would be "Ban the
Box" laws, which prevent potential employers from asking about criminal
history if it's not relevant to the job.

"I think these are two examples of productive economic activity that would
otherwise be impossible if the minimum wage was set to a living wage."

And I don't. Just about every example for why it shouldn't happen comes down
to business wants cheap labor. And that's not an argument that I am
sympathetic to.

~~~
Veelox
You have quite a few objections and I will try to address them one at a time.

>With all due respect, that's probably because you're not someone who's having
to survive on it.

I have a lot of respect and empathy for those working multiple minimum wage
jobs to make sure their children have food to eat. With that said, whenever I
consider a policy I start with how I think the world ought to be and then I
make considerations for how the world really is. Hence why I say it is
probably a good thing that we have the minimum wage.

>I don't believe that population is significant, or more significant than
those that do need it to be a living wage.

Data would be nice, but I would guess that the long term gain in increased
experience from more jobs happening would be better than the marginal
increased income for those with the now higher minimum wage.

>I do not believe that having a non-living wage job would help, because James
would still need to survive, and on a non-living wage, he's going to have to
supplement that income somewhere.

James would need to live somehow, by keeping the min. wage low, we give James
the chance to gain a work history at a low paying job (while he is provided
supplemental support) so he can transition to a better paying job.

>A better thing for James would be "Ban the Box" laws, which prevent potential
employers from asking about criminal history if it's not relevant to the job.

Ban the Box is a bad idea because it hurts young black men[0]. tl;dr when
employers cannot know that a person does or doesn't have a criminal record,
they don't hire from the populations with high rates of criminal records
(young black men).

>And I don't. Just about every example for why it shouldn't happen comes down
to business wants cheap labor. And that's not an argument that I am
sympathetic to.

I feel like you missed an important assumption I made, business will never
hire a person if the value that labor produces is less than the cost of the
wage. The min. wage sets a floor on the value a person and this hurts people
that cannot produce more value than the floor. This is different from the fact
that a business seeks to minimize costs of which labor is a major one. That is
capitalism, some business seek to pay people that absolute minimum they can to
cut costs. Others (like QuikTrip and In-N-Out) pay a premium for better
workers to get better value.

What is your suggested fix for businesses wanting cheap labor?

[0] [https://www.huffingtonpost.com/entry/ban-the-box-laws-may-
be...](https://www.huffingtonpost.com/entry/ban-the-box-laws-may-be-harming-
young-black-men-seeking_us_599c36ede4b09dbe86ea371b)

------
solaxun
This article's title is pretty terrible... "say hello to full employment" \-
then proceeds to discuss the employment situation in Iowa for the length of
the article.

~~~
falcor84
In what way is it terrible? It used Iowa as an example of what other regions
may experience in the future if unemployment rates go down. I got exactly what
I expected out of this article.

------
IronWolve
Talking to an in-law on the city council back home, the local places that do
jobs like tire changes, oil changes, pizza delivery, are having issues finding
people. Even with 15 dollars an hour wage, and this is in a small 2 store
town. I didn't even ask if those are 40 hour jobs or part time, makes me
wonder.

------
frgtpsswrdlame
We're not at full employment. Full employment implies wage growth but wages
still aren't growing very fast. This is a case where we've gamed the metric.
If wages continue to grow faster then we'll know we're getting towards full
employment.

------
hn0
When I open this page on my phone I am greeted with a privacy modal that
blocks the entire screen, with a consent button below the fold, which I cannot
reach because scrolling appears busted. (Mobile Safari)

------
InclinedPlane
Hello Full Employment, good luck making up for 4 decades of absent real wages
growth, I suspect it's going to be a difficult climb.

------
walshemj
Lol in todays Investors Chronical (weekly version of the FT for investors)
there was an article discussing the Philips curve - it commented that the
official unemployment rate is of by about 2x that actual rate in the states
and not much better in the UK.

------
purplezooey
Wage growth is not going to pick up. There are a billion people in the other
hemisphere that are poor and will gladly accept the same work for subpar pay.
That wage growth will pick up in any meaningful way is another false line fed
to us by the right wing message machine.

------
1337biz
Wasn't 'jobs,jobs, jobs' Trump's core economic message?

~~~
downrightmike
Jobs are the wrong thing to focus on period. Focus needs to be on ownership.

~~~
plasticchris
Federating ownership is the opposite of convenient for the politican. Having a
smaller number of people you need to please to get money is much better.

~~~
downrightmike
True. And most of their fundraising targets people who can afford to donate
thousands of dollars. So whose problems do you think they are listening to and
writing legislation to resolve? Put more people in the group that can donate
makes more donors and gives us a larger pool of people who can afford to run
for office.

------
ProAm
The national unemployment rate has always been political fodder and not a good
indicator to the heath of people employed. Statistical smoke and mirrors
considering they do not count people who've stopped looking for work because
they cannot find it, those who are under-employed, or those who are earning
less this year compared to last due to inflation and wage stagnation.

~~~
aero142
Stop getting your economics reports from political news sources. "They don't
count people who've stopped looking" is not a meaningful statement. There are
many statistics that report this. Labor force participation rate is the one I
always look at next to unemployment rate and gives a better overall picture.

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

In this case, I think you make a valid point. Why is the labor force
participation rate not climbing back to 2008 levels?

~~~
ChrisLomont
A large part is demographics, and the drop was known for decades before it
happened, as mentioned in papers from Census. FRED reports also explain this.

Another part is people staying in college longer (or going back to college) to
get more education which is needed for a modern workforce, and the result of
that is more lifetime earnings, not less.

A third part is many people are opting for one income, since many couples can
now live on one income. More people moving from the middle class did so by
moving up rather than down.

~~~
elvirs
>A third part is many people are opting for one income, since many couples can
now live on one income."

I beg to differ, its quite the opposite actually. More people are in debt
compared to past. Not sure if that's what you mean by 'climbing up'

~~~
ChrisLomont
Here's two sources showing more people are climbing up from middle class
rather than down [1,2]. There are plenty more you can find with a Google
search.

[1] [http://www.aei.org/publication/yes-the-us-middle-class-is-
sh...](http://www.aei.org/publication/yes-the-us-middle-class-is-shrinking-
but-its-because-americans-are-moving-up-and-no-americans-are-not-struggling-
to-afford-a-home/)

[2] [https://www.washingtonpost.com/opinions/is-the-middle-
class-...](https://www.washingtonpost.com/opinions/is-the-middle-class-moving-
up/2016/06/24/214dc04a-3a28-11e6-8f7c-d4c723a2becb_story.html?utm_term=.19fe8be489f5)

------
iand
Ugh! We should be striving for ways to create a zero employment society.

