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We’re Getting Close to Full Employment (nytimes.com)
63 points by nature24 on May 5, 2017 | hide | past | favorite | 102 comments


I wonder if the author has ever taken a stroll around downtown Baltimore on a weekday afternoon and seen all the people milling about who are "fully employed."

You need to carry that "employment to population ratio" graph out earlier than 1998: https://fred.stlouisfed.org/series/LNS12300001.

The employment ratio for men is down from 80%+ in the 1950s to ~65% today. Many of those men are of course in school, etc., but that merely reflects the weakness of the economy. You wouldn't expect a larger fraction of people to voluntarily go to school than in 1950 unless economic pressures compelled them to. Indeed, given that school is far more expensive today, you'd expect exactly the opposite.


The phrase is loaded... with academic context and usually refers to "structural" unemployment and is used in the context of the Phillips Curve, which correlates it with the inflation rate. Because of rule changes made in the Reagan and Bush Sr years and finalized during Clinton, both CPI (Inflation), and U3-U6 (different Unemployment measures) were altered so that they "look better" for the "misery index".

What you can really say is that economists now believe that we are near the top of the cycle where the FED will have to raise rates to prevent inflation. If you are willing to accept higher (or accelerating) inflation, then you can have a lower unemployment rate.

Of course if you have a different types of employment (manufacturing/retail), different export/import ratios (trade deficit), or credit situations (Debt vs GDP) then the structural and "Full Employment" rates (which produce rising inflation) are different. Since we live in a more global economy now even relative to the 1990s, it's harder for any one nation to change those.

https://en.wikipedia.org/wiki/Full_employment


When you go back before 1998 the biggest two reasons for the reduction you see have nothing to do with the economy. They are, in fact:

1) Women entering the workforce

2) An aging population

I think it makes more sense to look at this graph:

https://fred.stlouisfed.org/series/LNS11300060

Which shoes that the % of prime age people in the work force is up significantly since the 50s/60s/70s.


> I think it makes more sense to look at this graph:

That depends entirely on what you want to know. If you want to know the outcome on individual happiness and economic power, then no, it doesn't.

Whatever the reason, or whatever is reasonable (I do agree it's unreasonable to expect old people to work) the fact of the matter is that what 1 working individual in the 60s was producing was divided between 1.3 individuals. Today, it's > 2 (and that's in America, EU is worse). That's bound to have an impact on those individuals, the working ones, and the ones needing support.

Also another way of saying the same is that the generating coming of age in the 1980s and 1990s refused to have sufficient numbers of children. That is the reason the working age population now is stagnant (in practice shrinking).

But of course, the generation coming of age now is much worse when it comes to children. I understand why : it's harder. Even just having a bedroom for your child, just that expense, is ridiculous. It's so ridiculous that people making $100k+ in Silicon Valley have trouble doing so.

Still, the reason doesn't matter, and of course the net result will be a further shrinking working population in 20 years.

Poor kids. In this case, literally.


I'm not talking about the economy so much as the idea that everyone who wants a job has one (vis-a-vis full employment). Presumably men want jobs at a similar rate as they did in the 1960s (modulo the aging aspect which I had forgotten to account for).


> I'm not talking about the economy so much as the idea that everyone who wants a job has one (vis-a-vis full employment).

Full employment is the absence of cyclical unemployment, not “everyone who wants a job has one”.

Particularly, it's compatible with an arbitrarily high level of structural unemployment. The “rovots eat jobs” argument, for instance, is one of ever-escalating structural unemployment.


I can imagine that women entering the labor force had a negative impact on men wanting jobs. I know that stay at home dads aren't exactly common but they aren't unheard of either. Could have a couple points of impact.


That's not what full employment means.

https://en.wikipedia.org/wiki/Full_employment


Why did you downvote this? Care to explain?


The 1950s or 1960s is anything but a reasonable comparison point.

The sole reason those decades are plumped up so dramatically, is that the US took over 55% of all global manufacturing temporarily, due to the rest of the planet's dominate economies having been either destroyed or substantially set-back in WW2. It was an almost perfect storm of young men coming home and others coming of age from the post WW2 era baby boom (1960s, early 70s), and the US inheriting manufacturing dominance which was ideal for employing blue-collar men.


Is a part of that because women weren't expected to have jobs in the 50s, though?


Srsly: https://fred.stlouisfed.org/series/LNS12300002

Men employment rate is down from 80% to 65%, but women's employment rate is up from 30% to 55% from the 50's to now. In total the average employment rate for everyone has increased over 50 years from 55% to 60% in the US.

And there's no reason to think that we need a larger labor force than we had in the 50's - the opposite in fact.


"Need" is a strange way to think of it. The country doesn't need any particular amount of labor; it's instead individuals that need money, derived from working, to live. We don't need to have everyone employed; we just need whatever employment rate is required to ensure that everyone has money in their pockets.

The problem, I expect, simply comes down to the size of family units (by which I mean "clusters of people willing to internally redistribute income.") The fewer of those you have, the more individuals need to either be employed for themselves, or get income transfers from the government, to be able to eat/live. And I have the sense that there are far more people living on their own than there were in the 50s.


As a point of fact the way the Nazis[+] "eliminated unemployment" was by getting women out of the labor force (,,Kinder, Küche, Kirche'').

[+] Legit historical reference so should not shut down the discussion...no godwinning here.


Of course, a lot of that decline is because there are so many retirees and college students these days (a lot more than in the '50s[1]). If you look at the prime-age (25-64) ratio, it's still down substantially [0]

[0]http://www.epi.org/blog/prime-age-employment-to-population-r...

[1]https://www.statista.com/statistics/236093/higher-education-...


Not the angle of the article but I'll mention this anyway - the jobs are there.

With some exceptions, pretty much anyone who doesn't have a job - doesn't want one. There are situations where someone is truly "between jobs" as in something happened and now they are looking for another job with the same pay and skillset demands but this typically doesn't apply to the "downtown Baltimore" type crowd.


pretty much anyone who doesn't have a job - doesn't want one

Doesn't want a job, or doesn't want to downgrade their job? I.e., The laid off factory worker would rather go on disability than pump gas or wash dishes. So he is both choosing to be unemployed, but also doesn't have good job options.


This is really quite offensive. i'll tell the people who are desperate to get jobs that the problem is they really don't want them.


There are a lot of factors that have gone into that drop (women entering the workforce, aging population, the 50's number being inflated, etc) but you're right. I think trying to isolate an answer to that question is fascinating and if I were an economist it is all I would be spending my time on.


"There are a lot of factors that have gone into that drop"

Exactly. Complex systems are complex.

"trying to isolate an answer"

Wait, did you just contradict yourself? If there are a lot of factors, and they all contribute, why would you even try to isolate one? It's all of them.


I wasn't suggesting isolating one factor, I was suggesting that isolating what is actually a cause/effect of this drop, to what degree, vs what isn't is critical. I am 100% sure it's not one thing.

Economists, good ones at least, as supposed to come up with a theory that unifies the facts into a coherent story, testable so that when a factor they didn't consider is introduced, the story still holds true. This is the same of any science (to the extent that economics is a science). That's what I want to see and more of. It's part of why I didn't like Piketty but also part of why I found it a compelling effort at least.


Things like unemployment rate I feel should only be used as a relative metric, not absolute. Defining what is employed vs unemployed isn't as easy as it seems, and phrases like "fully employed" sound like they imply everyone has a job, which isn't the case.


> You wouldn't expect a larger fraction of people to voluntarily go to school than in 1950 unless economic pressures compelled them to.

I would if a larger fraction than usual is of the ages at which schooling is most common. I have no idea whether that's the case or not (or the opposite, entirely).


? Downtown Baltimore is stuffed with people who are busy working, and it's gotten pretty expensive. Most of the urban core of Baltimore is nice, it's the areas outside of the "white cross" that are structurally fucked.


Er... while for definitions of "downtown" and "stuffed" and "most of" I could agree with you, I don't think I agree with the thrust of your argument as opposed to rayiner.

Spent... 7? 8? years in baltimore, reading the police twitter and betting on how many triple homicides would occur today became a rather morbid drinking game. Certain areas, some even 2-3 blocks off Charles st are such that many of my friends didn't want to walk back to their houses alone, at least one was mugged off his bike on Charles itself, another had his house broken into, another peer was the "samurai sword" kid, if you remember that story. Even my breakdancing crew would joke about risks of going to certain venues on north ave, and we had a bunch of people who grew up in the center city there.

In short, I'd assert that "the areas out of the white cross" make up _much_ of Baltimore, even if it's not the much most tourists visit (e.g. anything outside inner harbor) and EVEN within the "white cross" we were VERY aware of the city we were in.


Are you talking about the mentally ill homeless folks? Are you talking about the people who are scamming tourists into giving them money with convincing stories every day?


Also should consider the number of people who are going on permanent disability:

http://www.npr.org/sections/money/2013/03/22/175076784/episo...

  The number of Americans receiving federal disability
  payments has nearly doubled over the last 15 years. 
https://www.thisamericanlife.org/radio-archives/episode/490/...


This is the hidden secret of "unemployment". A lot of people have just given up looking for employment, and are on SSDI or some other such program. The number of Americans on SSDI went from about 4M to 9M between 1998 and 2014: https://www.ssa.gov/oact/STATS/dibGraphs.html#3


Apparently if you break things down by gender the story is not as positive:

'But purportedly “near full employment” conditions notwithstanding, the work rate for the twenty-plus male was more than a fifth lower in 2015 than in 1948.'

http://www.mauldineconomics.com/frontlinethoughts/men-withou...


Using 1948 or the early 1950s without adjustment doesn't make sense. The US male labor pool was absorbed due to WW2 / the still vast expansion of the US military (and soon to be even more absorbed due to Korea). We had 550k men just in the US army at the start of 1948, with a US population base 1/2 what it is today.

By comparison, in 1939, between the army + navy + marines, we had just 334,000 total military personnel.

By 1954 we had something like 3.3 million active military personnel. That takes up a huge amount of labor slack.


Interesting. It seems there are two results here, probably independent. Note that the article talks both about "men" in the context of employment and "middle-aged white men without college degrees" in the context of mortality: it sounds like the explanations for these two statistics are quite different (and in particular, the first result about "men" is primarily influenced by non-white men).

The book it's reviewing concludes that the work rate for men in the US is falling because of mass incarceration primarily being targeted at African-American men, and because of laws that make it anywhere from hard to impossible for convicted felons to re-enter the workforce upon serving their sentence. The author of that post has bolded this passage in quoting from the book:

> As we shall see, a single variable – having a criminal record – is a key missing piece in explaining why work rates and [labor force participation rates] have collapsed much more dramatically in America than other affluent Western societies over the past two generations. This single variable also helps explain why the collapse has been so much greater for American men than women and why it has been so much more dramatic for African American men and men with low educational attainment than for other prime-age men in the United States.

Other sources (e.g., The New Jim Crow) argue that mass incarceration is an intentional policy aimed at keeping black people out of public life as the Jim Crow laws did in the past, which explains this claim from the top of the blog post: "... the great majority of them have not only dropped out of the workforce, they have also dropped out from any commitments or responsibilities to society." (I am partway through reading The New Jim Crow, and it does also mention that economic / technological changes have resulted in a much poorer job market for urban workers over the last half-century or so.)

So, if the joblessness rates are including men who can't work because they're literally in jail, and men who can't find a job because of their criminal record, it seems like there's an obvious explanation here - the number of men in those categories has gone up sharply since 1948.

However, the blog post makes another claim sourced from The Economist that for people aged 45-54, white men in the US without a college degree, in particular, have had their mortality rates rise when the mortality rates of all 45-54-year-olds in several other rich countries have fallen. (I think. It's not very clear what groups are being compared.) This is very interesting and seems like a serious problem, but it seems likely to be entirely unrelated to the previous, given the conclusions, and I'd also like to see this un-broken by race/education/age/gender in the US, and broken by those factors in other countries.

I don't have a good idea what would explain this, but it does occur to me that at the time that the people in this graph were considering getting a college degree, college was shifting towards being expected of all Americans who could attend it. (See, e.g., the uptick in the first chart in https://en.wikipedia.org/wiki/Educational_attainment_in_the_... ). So if this is just a proxy for "family wealth," I am relatively unsurprised to hear that mortality at age 50ish is correlated with how rich a family you were born into.


I'd be interested in how many stay-at-home dads are in that drop.


Approximately 0%. Outside the upper-middle class people don't have the luxury of not working. Real income has stagnated for middle and lower income people.


As child care costs have risen, at least some families in the middle have concluded that it makes little sense for the parent with worse career prospects to work solely for the purposes of paying day care costs. When stagnated incomes can no longer pay for the expenses required to work, working makes less sense financially.


How do you know that? From people you know or is there a resource for that information?


man I know people working as bank tellers, who rent just a room and still cant make ends meet. I dont think the 'employment' is good enough anymore. The tech who services my car at the premium car dealership said he has another job in addition to this full time job and still cant afford stake at home. I think in last 10 years a lot of new living expenses have been added to our daily life. cellphone bill, internet bill, all kind of bullshit mandatory donations to kids school, new 100 dollars per year for each point above 3 points on driver license, school books cost like 10 times more than they used to, have to have alarm system costing 30 dollars per month to get a property insurance discount, all that shit. wages did not keep up with raising costs. i see too many employed hard working honest people whose average checking account balance is usually a 2-3 digit number


> man I know people working as bank tellers, who rent just a room and still cant make ends meet

It's always been like this for people. There's this myth these days that all the employed people of yesteryear had comfortable lives. There's always been a large portion of society struggling to make ends meet - until recently, it was basically the definition of 'working class'.

As an example, ask your bank teller friend if they've ever had to darn a sock. Struggling to make ends meet looks a little different these days, but it's far from a new phenomenon.


Honestly, I think the biggest difference is in expectations. Look at this graph [0] from an NPR article.

The amount of disposable income spent on food has almost been cut in half since 1960. The example of darning socks is a good one. When people darned socks it was not really because they were poor, per se. It was because socks were expensive. Now socks are considered to be disposable items.

When I grew up, my mother had a carbon steel kitchen knife. Singular. I wander into people's homes and it's rare that I see less than 5 or 6 crappy knives that are, again, basically disposable. How many people have a sharpening stone in their house (and I'm not talking about the next-to-useless honing instrument that people buy and also don't know how to use)?

You've got people spending over $100 per month on cable TV, internet and cell phone. Not just one cell phone either. Every single person in the family needs one, so that they can play Candy Crush and take pictures of their breakfast (pancakes made from a mix because people have lost the ability to add baking powder to flour). Darning socks? Who has time for that???? Socks are free anyway.

Look at this graph for real disposable income since 1929 [1]. Money is like computer memory. The more you have, the more inventive ways you will find to use it. There is never enough. I wonder how many people would actually be better off spending an evening darning socks instead of stressing about how many "likes" they have on Facebook.

[0] http://media.npr.org/assets/img/2015/02/27/thr-income-spent-...

[1] https://fred.stlouisfed.org/series/A229RX0


Steak at home?


I meant steak, sorry for typo.


I still don't understand that phrase. Help?


the guy said he would like to be able to afford steak to take home more often, and I quote 'but nope, I guess its beans again this week too"

sorry I wrote 'stake' twice. it may be keyboard on my phone messing with me


hahaha. thanks.


> The tech who services my car at the premium car dealership said he has another job in addition to this full time job and still cant afford stake [sic] at home.

Qu'ils mangent de la brioche?


I guess thats why she was hang later


The official unemployment rate includes only those who are "actively seeking" employment, by specific measures.

It does not include those who have given up looking for work or don't consider the available work sufficiently rewarding. A sufficiently strong recovery brings more of those to find work.

Labor force participation may be a better measure. https://data.bls.gov/pdq/SurveyOutputServlet


Did you read the article?

> Broader measures of unemployment tell the same story. The so-called U-6 rate, which captures people who are working part-time but want a full-time job, and those who would like a job but have given up looking out of frustration, is also back down to its level before the last recession. It fell to 8.6 percent in April from 8.9 percent, and the last time it was lower was November 2007.


Yes, but does a U-6 level of 8.6% constitute "full employment"? According to the technical definition they're unrelated. Less formally, 8.6% unemployed, underemployed, or discouraged seems quite a bit short of full anything. Pointing out flaws in the original definition or terminology in no way implies that the GP hadn't read the article, and the suggestion to prefer labor force participation is a good one.


"Full employment" is a technical term that means no cyclical unemployment; it can involve arbitrarily large quantities of non-cyclical, e.g., frictional and, more to the point, structural (mismatch between skills and demand) unemployment.

It seems intuitively likely to me that structural unemployment is becoming a bigger problem (and that structural rather than cyclical factors are an increasing factor in discouraged workers.)

"Full employment" doesn't mean no employment problems, it just means that the problems are non-cyclical.


Labor force participation doesn't take into account demographic changes so it's almost categorically worse than U3. Look at U6 for something that takes into account discouraged and part time workers.


Labor force participation has many other problems - retirees being a huge one. There are disputes on who to include as actively looking for work and how to measure the underemployment, but labor force participation is not the answer.


Labor-force participation can be scoped to just prime-age workers (25-54): https://www.theatlantic.com/business/archive/2016/06/the-mis...


You know how else you get to "full employment"? By eating all the unemployed. It's scarcely less ethical than what the government and NYT are doing here.

(1) Define "full employment" as 95.3% of the "workforce".

(2) Define "workforce" to exclude arbitrarily many groups.

(3) Ignore all the people who've been forced into one of the excluded groups.

This is not full employment in any reasonable sense of the word. Not unless "full health care coverage" is 95.3% of people who are above the poverty line and have no preexisting conditions.


A modest proposal, indeed. Let's not leave out the underemployed, degree holding burger flippers and Wally World clerks. The Circle K by my house had an architectural engineer for awhile, but he got away.

https://en.wikipedia.org/wiki/A_Modest_Proposal


The official unemployment rate (U3 numbers) should be ignored. This number serves little purpose other than being a political tool today.

https://www.facebook.com/ellis.winningham/posts/142209383784...


To further this, U6 is around 8.6% - 1.

1 - http://www.macrotrends.net/1377/u6-unemployment-rate


U-6 is close to prior Great Recession too, according to the chart.


Once salaries start rising I'll believe you.


U don't have to believe anyone.

But if u believe in math, then even with this U-6 metric, it is back to 2007 level. Meaning this U-6 metric is not really an indicator diverging from the official claim either.


It's positive in that it's tracking with U3. My point is that it unemployment on a daily basis, what mainstream America feels, is still twice as high as the "Full Employment" target set by the Feds.

As to purchasing power, I'm not able to readily find numbers not that. Last I heard, people are working longer hours for the same pay they received in 2007/8. If that's true, they are functionally making less money. I've seen it first hand. People working 45-50 hours to make up for short staffing. However, I only have a few localized, anecdotal data.


I'm looking here:

    http://www.macrotrends.net/1316/us-national-unemployment-rate
I find it almost impossibly odd that "1 year after the decade" is sufficient to imply a recession. By that chart, 2021 is going to blow.


It gives you some idea what the job market is like, on average, based on people who are actually in the market.

From the point of view of employers looking for workers, only the people who apply for open positions actually count. If nobody's applying, there's a shortage. They might have to start paying more. That's meaningful, good news for workers.

On the other hand, if people who weren't looking for work start applying again, it would mean the official unemployment rate goes up. Seems like that could easily happen.


What does being employeed matter? Having a liveable salary and average lifestyle for all is more important.


I'm just going to leave this here: http://www.shadowstats.com/alternate_data/unemployment-chart...

But I fully expect to be down-voted out of reality


Shadowstats is pretty much bullshit. See:

http://www.economonitor.com/dolanecon/2015/03/31/deconstruct...

http://www.economonitor.com/dolanecon/2015/06/15/deconstruct...

I upvoted you because I want my reply to get visibility.


I am guessing your claim is something like "If you count long-term discouraged workers, and U-6 only counts short-term discouraged workers, it has not actually recovered"? (Note that it's fairly common to downvote people on HN who aren't clear what they mean, whether or not what they mean would be acceptable to the hivemind.)

If so, I'm curious what this website's methodology for calculating long-term discouraged workers is - and in particular whether that includes people who have been "discouraged" by being in jail, or people who have trouble finding a job because of a previous criminal conviction. (I'm also curious whether this includes people who have retired young, are on trust funds and never really wanted a job in the first place, etc.)

'lukasb linked a very interesting blog post, reviewing a book that claims that a huge explanatory factor for unemployment is mass incarceration. So any useful analysis of the causes of non-receding unemployment needs to take this potential factor into account; it may well be the case that ending mass incarceration and creating a federal fair-chance law will cause the "ShadowStats" number to rapidly drop back to matching U-6. I don't see any mention of this factor on that website.


I downvoted the comment because you were lazy and just barfed up a link to $DEITY only knows where with no further commentary. The fact that your source is, how to put this politely, frequently demonstrable bullshit is secondary.


Sorry I clearly misunderstood. I thought the OP was demonstrable bullshit.


Can you provide arguments for this claim so we can debate each other's claims like intelligent people, instead of just linking data without context and linking curt replies?

See this article from the founder of this forum: http://www.paulgraham.com/disagree.html


> But I fully expect to be down-voted out of reality

And I obliged.

Next time, leave the meta-comments out.


meta-meta-meta


Report: https://www.bls.gov/news.release/pdf/empsit.pdf

My comment was going to be about how unemployment doesn't count multiple very large and important groups, including those looking for work for 12 months or more. But actually it looks like those numbers have pretty much all improved as well, and some even more significantly than the base unemployment rate.

Discouraged workers dropped by about ~20% from last year, marginally attached workers dropped by about ~10%. Long-term unemployed dropped by ~20% from last year. At first glance that seems pretty crazy.

I'd love to see some analysis on this.


I'll worry about too much employment when labor's share of national income returns recovers.


So if we are saying this isn't that great of news, what should I make of some European countries?


I had this conversion with a feminist. I claimed that a large reason for wage stagnation is that women hit the workforce en masse in the 1970s. That's when the stagnate wages started. I made no judgement on women working. I just tried to explain why everyone's wages have barely moved: more labor supply. Compounding this is global labor. Sadly, the individual became quiet combative about these two facts.


We detached this subthread from https://news.ycombinator.com/item?id=14277113 and marked it off-topic.


Without any knowledge of the situation in question, I'd offer that the way facts are presented is more likely to cause emotional responses than the facts themselves regardless of audience.


> Without any knowledge of the situation

Above poster argues that the problem is the way the facts were presented.

- Doesn't provide any evidence for this

My experience is the opposite. When dealing with ideologues there is no way to mention some things without "triggering" them.


I'd say it's both!

If the recipient is in an "us versus them" mindset, then they are going to be biased toward poking holes for ideas on the "other side". See also: "Why you think you're right -- even if you're wrong", by Julia Galef [video] https://youtu.be/w4RLfVxTGH4

There are obviously ways to present facts that cause people to be predisposed to rejecting them. I would argue that there are also techniques that can help pull people out of this mindset (for example, acknowledging that the listener's opposing view is a valid one), which can improve the odds of them being receptive to new information.


Why does that only hold for labor, why is there no corresponding executive and management pushdown? There is additional supply for those positions, too.

P.S. Why even mention the "feminist" angle? It doesn't feed your point, and it seems you use it self-servingly to go silent on their response.


> There is additional supply for those positions

The supply of executive and management workers is constrained by the intimate trust that can be formed with the individuals. I'm not sure that scales with the total workforce. Much like friendship, I suspect that the average person has no more friends with 7B people on earth than an average person had when there were 2B people on earth. There are just practical limitations to the number of people that you can build that kind of relationship with. It is not like a line worker where the job is implemented such that almost anyone can walk into the job as a 'replaceable cog'.


Those aren't facts they are things you made up. Economists and others actually study this stuff you know, there are empirical ways to make this judgement without back of the envelope guessing.

But if you like superficial reasoning explain the variance in wage growth between the US and countries where feminism has had more impact on the labor pool like Scandinavia, which suggests the exact opposite of your hypothesis.



Increased labour supply doesn't naturally lead to lower wage growth, so she was right.


Huh? As a general matter, increased labour supply _does_ naturally lead to lower wage growth. That's simple supply and demand, which is about as "natural" of a phenomenon as you can get.

It doesn't necessarily lead to lower wage growth, of course, particularly when you take into account other factors that might change contemporaneously. For example there might be union or political pressure to redistribute more profits to workers.

But the point is that with an increase in the labor supply, ceteris paribus, we should expect lower wages, and thus lower wage growth averaged over the period before and after the change in labor supply. The persuasive burden should be on someone trying to prove otherwise. That burden might be easy or difficult to overcome, but we shouldn't mistake where the burden should lie. Otherwise we're rejecting basic, sound economic theory.


But of course it's not "ceteris paribus" since those new labourers are are wage earners, their consumption results in more economic activity, and so the wheel of prouction and consumption spins faster.

Take a thought experiment in the opposite direction, if 50% of the labour force decided to drop out, and so there would be about a 50% drop in GDP - do you think there would be big real wage increases for those who remained employed?


If 50% of the labor force dropped out, I would absolutely expect wage increases. I'm ignoring the claim of a 50% drop in GDP because that muddies the waters, and is conclusory; precisely the thing I think we avoid if we stick to my original point.

Yes, we know that "ceteris paribus" is a lie--other elements of the equation will always be different. Moreover, there are complex feedback mechanisms at play. But _how_ they're different is what matters, not simply that they're different.

Precisely because those second-order effects are so complex is precisely why people relying on them for their argument should hold the burden of persuasion. I don't think that should be controversial.

Yes, it's a PITA. I'm tired as much as anyone else of conservative economists and conservative politicians applying economic laws too simplistically, arriving at conclusions completely at odds with _reality_. When our conclusions differ from reality, that's a strong hint we should look for the flaw or missing element in our model.

But none of that justifies shifting the burden. Once you shift that burden you've effectively discarded the laws of supply & demand, and have put earnest, learned critics on the same pedestal as charlatans and radicals. Once you prime people to accept the more complex, non-intuitive answer over the simpler answer, you've poisoned public discourse.

That's how you end up in a situation like Venezuela. Venezuela isn't broken because it's corrupt; all those working poor knew the government was corrupt while voting for them. But people there believed the destructive and poisonous criticisms of liberal economics, and so are simply no longer able to accept even the most basic precepts of supply & demand.


Right, but this one is easy to push back on. If only men work, and most men need to support a family then the wages that all men are willing to accept is higher. Once families have two breadwinners, both men and women are willing to accept lower wages. The average household income is $55k but the average two income household makes $100k which I would hypothesize is the real growth area. The 'middle class factory worker' making $80-90k lifestyle now takes two people to realize.


But since the 2 people are creating much more material value, this explanation would mean that a much bigger % of it was going to profits instead of wages.

I think the decline of unions and globalization are more credible explanations.


I think it is a combination of all those. It's just an overlooked cause. I think many avoid it entirely because they believe it demeans women. As I said in another post, more capable about came to the fore in much large droves than the US could ever take at one time from immigrants. We now had a massive surplus of labor. This would drive wages down.

With this, the collapse the union base, and add new cheaper labor in the rest of the world. Also enact free trade policies that didn't tax imports that used essentially slave labor to make their products.

The end result is depressed wages from without and within. So too automation rendering a portion of this pool redundant.


She probably became combative because you were deploying the lump of labour fallacy and in doing so either explicitly or implicitly blaming women working for the failures of economic policy since the 70s.

Although this would at least make a refreshing change from the usual gambit of blaming immigrants, unfortunately you seem to have managed to do that as well.

Your 'just tried to explain' (wrongly) is a classic example of why the expression 'mansplaining' is a thing. Please stop.


I don't think I'm committing that fallacy given history. Look where women went to work: office level work, or service work if you will. Look where men were transitioning during the late 60s: office level work, or service work if you will. Now you've got 2 groups of people competing for the same work. Historically with a constrained pool of labour, you'd expect wages to rise to get the few available candidates to work for you. Since the 1970's, that pool is essentially 33-60% great than what it could have been. Also during the 1970's you saw an increased rate of women attending university. Again, gaining skills and accreditations required by the general employers at the time.

As to mansplanning, I didn't do that. I never said the individual was a woman. In fact it was a portly, hairy MALE friend of mine. I also didn't say women in the workplace was bad. Just there are consequences of expanding the labour pool with more intelligent hard working people.


I want you to consider the way you phrased your statement, and compare it to the way I phrased my question.

You: "[The] reason for wage stagnation is that women hit the workforce"

Me: "because women weren't expected to have jobs"

The way you phrased your statement can be interpreted as saying that women are the cause of wage stagnation. Surely, that's not what you meant at all.

The way I phrased my statement implies that society, and the change in society's expectations of women, are the trigger. This shifts the "blame", if you will, from women, to everyone.

I realize I'm being nit-picky about words, but in my experience, women and minorities care about words a lot, and so taking care in the way you use words can help them be more receptive to your facts and ideas.


*>I realize I'm being nit-picky about words,..."

If you were nit-picky about words, you would realize that the entire post you quoted from was utterly inoffensive to anyone not trying to find offense. FFS, he (excuse me for assuming that) even said "I made no judgement on women working."


I really perceive no difference between those phrasings. I also don't have a strong desire to pander to those who go so far out of their way to avoid charitable interpretations. Fortunately, I know very few such people (male or female, majority or minority).


>She probably became combative because you were deploying the lump of labour fallacy and in doing so either explicitly or implicitly blaming women working for the failures of economic policy since the 70s.

That's not a valid reason to become combative. If she felt the GP was wrong, she could have simply, with facts and logic, explained why she felt that way.

In my observation, when people respond to an argument with combativeness, it usually means they realize they cannot refute the argument with facts and logic. So they get all nasty and start name-calling (e.g. "you're a racist!") or they deploy some childish, imbecilic bromide like accusing the other person of "mansplaining".


Sure. And people also beecome combative when the person arguing with them is being a dick.

Case in point: my previous post has attracted a rapid slew of (not exactly undeserved) down votes, and precisely one person (you) even attempting facts and logic. And even yours pitches 'childish, imbecilic', which isn't uncombative itself, in context.


Downvoter here. First of all, downvoting isn't combativeness. Secondly, if you want fewer drive-by downvotes, you might try making it worth a reader's time to respond--don't post obviously bad ideas (no one wants to explain the obvious); demonstrate that you're thoughtful, well-intentioned, and reasonable (only trolls want to debate an unreasonable person); etc.


I down voted your post too. You told him he was mansplaining and to please stop. How does that help anything in the discussion?

I appreciate the wage gap problem, but throwing terms like "mansplaining," are typically done by garbage websites trying to get clicks by stirring up gender tensions. It actually stands to freeze progress rather than further it, but hey, ad revenue right?


I'd like to note, though, that it was a good post aside from the personal attack. I would have upvoted if the text dedicated to admonishing the parent were instead dedicated to expanding on how the lump of labour fallacy applied.


Yes, I would also like to know how doubling the work force as a factor in pushing down wages is a fallacy (particularly in the 80s). I understand it's a complex problem. Another factor in stagnant wages is automation and much of what we tout as worker productivity isn't necessarily workers working 10x faster or harder, but automation allowing them to get 10x more done. Think in terms of Excel vs "running the numbers" manually, databases vs. file cabinets, etc. As an aside, part of the reason the VA is so inefficient is that many of their patient records are (were?) in file cabinets.

The worker doesn't do 10x the work out of pure skill (though learning to use Excel is part of it) but the investment in licenses and software done by the business. It's fair to say if the business invested in building a software system, they should reap the benefits of the productivity it yields, even though that stagnates wages. I also believe a worker who understands Excel should have higher wages than one that doesn't, though today, it's a requirement for a job in accounting.


>And even yours pitches 'childish, imbecilic', which isn't uncombative itself, in context.

The term "mansplaining", and the use of it, is in my view extremely childish and imbecelic, in just about every scenario in which I've seen it used. And it's based on a gender-based generalization that is as illogical as if I had said "she became combative because women are driven by emotions rather than reasoning! She should stop fem-plaining!"




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