Friday, August 2, 2013

Boy, I hope this assumption is correct

My morning Wonkbook e-mail made an interesting point, regarding the unemployment rate and the labor-force participation rate* (emphasis mine):
The popular (well, popular among depressed econ wonks) image of discouraged workers sighing and deleting their account once and for all is wrong. The rate of labor force exit is actually lower than it was in the aftermath of the 2001 recession. It’s labor force entry that’s suffered. 
In particular, it’s suffered among women — and it’s really suffered among young women – who are a lot less likely to enter the labor force than they were in 2002 and 2003. 
That is, in certain ways, a more encouraging trend: Discouraged workers who leave the labor force typically see their skills erode. Young people who delay entry are often staying in school longer, gathering skills that will ultimately prove valuable to them (and student loan debt that will prove burdensome). 
But that comforting possibility surely doesn’t explain all of the drop in entry we’re seeing among younger people. And it doesn’t really explain any of the drop in entry we’re seeing among older people.
I sure as hell hope that they're gathering skills that will ultimately prove valuable, as opposed to just racking up student loan debt. (If our student was a 5th year graduate student in chemistry (certainly not the median student), another year would not really add all that much in skills.)

We are all impacted by the Great Recession, but I fear that it is the young people (folks under 33 or so) that have been affected the most by the relatively poor job recovery. Best wishes to them, and to all of us.

*Short explanation: the labor force participation rate is a measurement of the number of people who are working or seeking work ("in the labor force") compared to the total population. If you're a student or retired, you're not counted in the numerator. Since the Great Recession, the labor force participation rate has fallen from 66% to 63%. Some of this can be attributed to the aging of the American labor force (i.e. people retiring), but a lot of it cannot -- and economists debate the reasons why.


  1. I'm wondering if all the outsourcing/wage reduction has either deleted or generated enhanced competition for entry-level jobs or convinced lots of people that their knowledge and skills are not valued and so they see no reason to bother using them for people who don't care for them. I would think we've also made ourselves more expendable and that we don't see other people as people but as expendable, and that can't help improve willingness to enter the workforce.

    One of my wife's cousins is sort of puttering along, working in a coffee shop, and my dad-in-law was wondering why; when he was starting, there seemed to be entry-level jobs and a belief that if you worked hard, you would be rewarded. I think that both of these have taken fatal (or damaging) hits - being rewarded for hard work hasn't happened (based on worker productivity), and there doesn'tt seem to be a ladder for people to start climbing.

    Why women? What are their alternatives? Have their jobs been disproportionately impacted, or is something else going on?

    1. When I was out of work as a chemist, I made some pretty good money on the side doing handyman work. I think a lot of men end up going into the building trades if they can't find something in their field, and it's pretty rare for women to take this path due to the physical strength required.

    2. Well, back in 2005 when I was starting my PhD, I kind of was thinking that I wanted to work for pharma, and my friends who were graduating were getting interviews with Schering Plough and the like, but after starting to read 'In the Pipeline' and learning about all the dysfunction and the lack of respect for their workers, I gave up on that. Then when the recession happened in late 2008, I was close to finishing up and I knew that things were going to be bad, so I just decided to find a postdoc and get the hell out of America to see the world until everything quieted down.

      I still would consider a big chemicals firm like BASF or DOW or their smaller equivalents, but I would never work for a pharma company now. The last few years have made me think even less of them than before, and I didn't think it was possible. I was reading a story in Nature Jobs about a guy who took an internship at Pfizer in 2009 and is now working there full time and the story was about how he made a great discovery and was happy working there, but all I could think of was 'that poor fool...'

      Although, in light of this post, I think CJ should look at his previous one and try to make that unemployment graph include the labor force participation rate. Would be something more realistic.

  2. I heard on NPR of "low skilled" factory people after being let go being told they would never ever get a decent job again, and then something "would happen" and they would go on disability. A nice, albeit small, check for life.

    Its tempting to set up some kind of deforming lab injury and claiming disability. Heck, if good fractions of people in ceratin counties in the South do that, why not me? I know! Burn my right hand on a bunsen burner. Ill be back in just a second...
    *calls SSI*

    1. Except that unemployed "low skilled" people just sit at home, then go to McDonalds every day and become obese, suffer a heart attack, and half their body becomes paralyzed. Or they get diabetes and another illness. Certainly not as pleasurable as a deforming lab injury, but in the end both of you won't be able to sit at home on those checks and play video games. Well, not ones that require fast reaction times and controllers anyways.