The grim facts behind the great employment numbers

Summary: Let’s look behind the unemployment numbers and see the disturbing truth about the most important market in America – the market for labor.


I have long been critical of the news media and the narratives journalists spin. I have long believed that the economic statistics produced by the US government and private companies provide a reliable picture of the economy – when properly used. The past year has provided ample evidence that the former belief is correct (see America is a nation lit only by propaganda) but also that the latter might be wrong. This post might go on my Smackdowns Page, another on my too-long list of mistakes.

Why do so many observations paint a different picture than do the official employment statistics and the cheery narratives of journalists? I have no explanation. But such anomalies demand attention, like the iceberg looming ahead as the Titantic steamed through the night at full power.

A graph of which we can be proud: unemployment at a 49-year low.

FRED: US unemployment rate
Click to enlarge. From FRED.

About our wonderful, even too strong, job market

See this from the Fed’s January 2020 “Beige Book” – about employment and wages.

“Employment was steady to rising modestly in most Districts, while labor markets remained tight throughout the nation. Most Districts cited widespread labor shortages as a factor constraining job growth, and, in a few cases, business expansion. …Wage growth was characterized as modest or moderate in most Districts – similar to the prior reporting period – and there were scattered reports of wage increases from year-end hikes in minimum wages. A few Districts also noted the use of benefits, incentives, training programs, and automation to reduce vacancies.”

Economists’ models support this narrative. The “natural rate of unemployment” (aka NAIRU, see Wikipedia) is the unemployment rate below which businesses must push hard to compete for workers – especially with better working conditions and higher wages (more about it here). By this logic, rapid wage growth should have begun several years ago. From 2009 to 2015, NAIRU was estimated at 5-6%. The unemployment rate broke below 5% in January 2016.

NAIRU is now estimated at roughly 4.5%. The U-3 unemployment rate broke below that in May 2017, and is now 3.5% (see table A-15 for the six measures of unemployment tracked by the BLS).

About that wonderful wage growth – not.

Look at the average hourly wages of production and non-supervisory workers in the private sector – roughly 80% of all workers. This excludes government workers, those among the lucky few with strong unions. It excludes supervisory workers and professionals, many of whom are in the grifter economy (i.e., extracting the bulk of America’s productivity growth). How well have these workers, the rest of us, done?

Since the end of the Great Recession (almost 11 years), real wages for these workers are up 7.8% (+0.7%/year). That is not much. Those business executives screaming about workers’ wages just do not want to share – and believe that they can do quite well without giving higher wages to workers.

Real wage growth since May 2017, when the job market became “tight”, is only +2.2% (1.4%/year). That does not do much to retain employees and pull more workers into the labor markets.

This is not what a tight labor market looks like.

Update: more evidence that there is no labor shortage

Employers react to a labor shortage not just by raising wages but by lowering non-vital job requirements. Employers are doing the opposite: adding non-vital requirements. They do that during a labor surplus. See “Structural Increases in Skill Demand after the Great Recession” by Peter Q. Blair and David J. Deming – a NBER paper, January 2020 (gated).

“In this paper we use detailed job vacancy data to estimate changes in skill demand in the years since the Great Recession. The share of job vacancies requiring a bachelor’s degree increased by more than 60% between 2007 and 2019, with faster growth in professional occupations and high-wage cities. Since the labor market was becoming tighter over this period, cyclical “upskilling” is unlikely to explain our findings.”

Here is a free slidepack about the paper’s findings. This is not a new problem; it has just grown worse over time. See Overeducation in the U.S. Labor Market by Russell Rumberer (1978).

Anecdotal data ruins the narrative

My family moved from the San Francisco Bay Area (unemployment rate 2-3%) to Iowa (2.3%). In both regions, employers complain about the labor shortage. In neither place is there evidence of any shortage, except (as always) in some currently hot skills. Nor is there the widespread “acceleration” of wages resulting from unemployment below the “natural rate.”

Sidenote: The Fed never worries about an “acceleration” of profits, only wages.

The job market has the characteristics of a surplus of workers (Marx’s “reserve army of labor“).

A large fraction of jobs are offered only part-time, with few or no benefits. This gives employers maximum leverage over their employees, able to adjust their hours as punishment/reward or to reflect changing business activity. The later shifts much of the risk of business fluctuations to their workers.

In businesses (such as retail) that have long workdays, employee schedules are capriciously set. This makes it impossible for those with part-time positions to work multiple jobs. Worse, arranging one’s personal life is difficult. Body rhythms are scrambled. In a tight labor market, employers seeking to retain employers exert themselves to provide scheduling stability.

Wages are low vs. the region’s cost of living. Raises are slow and small. Price is the primary indicator of conditions in any market.

Another indicator of tight labor markets is the average weekly overtime of hourly workers. The Fed shows this only for manufacturing – now 4.2 hours/week, below average for non-recession years since 1990.

Employers set high requirements for jobs. Most commonly, requiring college degrees from jobs that barely require a high school education. Many job descriptions require elaborate skills, which workers must acquire at their own expense on their own time (in a tight labor market, employers train people). Many jobs that are essentially entry-level require extensive previous relevant experience. This indicates a buyers’ market for labor.

Age discrimination is ubiquitous. In a tight job market, wages rise to bring retired or semi-retired people back into the labor force. Now the opposite is commonplace. A recruiter I worked with in the Bay Area said that she was considered almost too old at 45.

Management jobs (i.e., salaried) often have low wages per hour due to the long work-weeks. They are often expected to work extra hours to cover for absent workers or do special projects (rather than paying hourly employees overtime). Lots of people out there desperate to climb the ladder out of part-time minimum wage jobs.

Employers treat employees as disposable cogs, the opposite of the “talent hoarding” seen in tight job markets.

Brutal tactics are employed to cram-down wages. I heard several cases of nation-wide chains that reduced the number of second-tier managers at their stores. Those losing their jobs were sometimes told to re-apply for third-tier management positions at the store – at lower wages. Here’s an example (also mentioning some of the tactics mentioned above).

People at both ends of their careers have long job searches.

What about all those job openings?

Many openings result from the high turnover caused by difficult working conditions. Many jobs, especially in retail and warehousing, are physically brutal. People get exhausted as businesses squeeze them dry. There are always more people looking.

Many employers publish openings with fantastic combinations of high requirements and relatively low pay. They are fishing. It costs them nothing and sometimes they get lucky. I have seen many of these jobs on the local job listing services remain there for over four months. Employers point to those openings as evidence of a tight labor market. In fact, they show the opposite.

A long-term imbalance between supply and demand almost always results from pricing power by the party with the stronger hand. Now businesses have the strong hand.

What about all those news stories?

They are propaganda, like so much of the news these days. My favorite examples of fake news are the “skills shortages” stories. While there are always some specific skills where demand exceeds supply (these imbalances require years to resolve), most of these stories reflect businesses hammering down wages to create shortages. Improving wages and benefits, working conditions, and terms of employment (especially job security) would make most labor “shortages” disappear like last winter’s snow.


Other than pay (the biggest indicator), the other labor market statistics show a tight labor market – after the longest econ expansion on record. How can we have a labor surplus with per capita real GDP up 11.4% since the previous peak?

I have no explanation. But I have found that these kinds of anomalies are signals that cannot be safely ignored.

For More Information

Ideas! For shopping ideas see my recommended books and films at Amazon. Also, see a story about our future: “Ultra Violence: Tales from Venus.

To better understand measurements of unemployment, see “What Does the Unemployment Rate Measure? Labor Market Slack or the Social Stress of Joblessness? Why Does it Matter?” by economist Ed Dolan.

If you liked this post, like us on Facebook and follow us on Twitter. See all posts describing the 3rd industrial revolution, about inequality and social mobility, and especially these…

Books about this crisis of capitalism

See these two powerful books about this crisis by Wolfgang Streeck is sociologist, Professor and Director Emeritus at the Max Planck Institute for the Study of Societies in Cologne. See his c.v. and publicationshis website and his Wikipedia entry. See reviews of his work here and here.

How Will Capitalism End?: Essays on a Failing System (2016).

Buying Time: The Delayed Crisis of Democratic Capitalism (2017).

How Will Capitalism End? by Wolfgang Streeck
Available at Amazon.
Buying Time: The Delayed Crisis of Democratic Capitalism
Available at Amazon.

40 thoughts on “The grim facts behind the great employment numbers”

  1. There are several comments here about the work habits of the young. But with little awareness that this is commonplace of history: “those darn kids.”

    In the 1950s, people complained about the beatniks and those kids listening to Elvis (those evil hips!) instead of working hard. In the 1960s there were all those hippies. In the 1880s, cattle barons complained about the difficulty of keeping cowboys – who would drift off from their brutally hard, dangerous, low-paid jobs.

    Every few years, an article debunks this foolishness, such as these two.

    Every Every Every Generation Has Been the Me Me Me Generation” by Elsbeth Reeve in The Atlantic – “Millennials are the ‘ME ME ME GENERATION,’ writes Joel Stein for Time magazine’s new cover story out today — which makes him only the latest culture writer in the last century or so to declare the youth self-obsessed little monsters.”

    People have always whinged about young adults. Here’s proof” by Amanda Ruggeri in the BBC – “Older people love to gripe about the entitled, lazy millennial generation. But it’s nothing new – by delving into the archives, we found plenty of parallels stretching back 2,000 years.”

  2. Everything you described is spot on. The current interview process contradicts the worker shortage narrative. I’m in the software biz. I remember when there really was a shortage of programmers (about 20 years ago). The job search process was something like this:

    1) Find a plethora of job openings on monster or
    2) Email your resume (say on Monday)
    3) Get a phone call, perhaps the same day, Tuesday at the latest
    4) In house interview by Wednesday or Thursday.
    5) If you could demonstrate that you were competent (not walk on water good) you would often get a phone call with a verbal offer, sometimes the same day as the interview (happened to me once).

    They moved fast and were not terribly picky for a good reason: If they didn’t move fast, someone else would snap you up. And if you stayed put, you’d probably get a 5% raise, so they would offer you maybe 10-15% more.

    1) Apply through the company’s website, filling out a long questionnaire on software like Taleo
    2) Wait, wait, wait. If they call you, it will be after 2 weeks
    3) Hour long phone screen by hiring manager. Not too hard to ace, but if you aren’t careful you can blow it.
    4) One or more hour long technical phone screen interviews
    5) If you get this far, you will be asked to take a coding test. Sometimes it’s online. You usually get an hour or two to solve a non trivial assignment, which must compile and run flawlessly, I once applied at a place where the expected time to complete the test was over 10 hours.
    6) If you haven’t crashed and burned yet, you get invited to a grueling all day interview, where you will be bombarded with vague trick questions.
    7) Even if you think you knocked the ball out of the park, you might not get an offer.
    8) If you get an offer, the pay bump would be tiny. In some cases it will be 0.

    I’ve been on both sides of the process. Once we had a candidate who seemed very solid, not perfect, but solid. Well, guess what? That wasn’t good enough, so no one was hired. We kept searching until the req was cancelled. There were plenty of candidates who could do the job, but there was always some sort of show stopper (often salary requirements) so no offer.

    And raises? I know people who haven’t had a pay raise in over six years.

    I saw a news article saying how people at the bottom are getting the biggest raises (percentage wise) but as you mentioned, it’s only because their raises were legislated via regional minimum wage hikes.

    1. I work in cybersecurity, which is booming now the way you describe programming being 20 years ago. Most people in my field switch jobs every year or two, because there’s seemingly always another firm that wants your skillset badly and will give you a 20% boost in salary. I have to shoo away online recruiters constantly.

      And you can see what they did to the formerly competitive computer programming/coding field: they commoditized it. Obviously, being a lucrative field, you were naturally going to get a glut of young people who would pursue compsci degrees or taking coding certification courses. On top of that, global capital figured out it was easily outsourceable/offshoreable, so you could just have labor in India or the Phillipines do it for cheaper. Now, you see all these “learn to code” initiatives where they’re trying to train unemployed rust belt and coal mine workers to write JavaScript, so they can basically create an ultra-cheap coding labor force domestically. I also see an increasingly tendency of business to try to “Uber-ize” it and turn coders into “independent contractors”, via stuff like Topcoder and Upwork.

      They’re trying all the same tricks now in order to commoditize cybersecurity and drive down wages, like pushing cybersecurity education really hard and “bug bounty” programs. Cybersecurity certifications and certain gov/audit requirements that can’t be easily offshored offer some protection, but it won’t protect wages forever.

      1. Anon,

        I too have seen that. The US has shown a remarkable ability to quickly train people for hot fields. This often leads to a boom-bust cycle. Aerospace engineers were hot in the late 1960s, then often unemployed in the 1970s. Geotech and petroleum engineers were hot in the 1970s and often unemployed in the 1980s.

        Employment in the oil & gas industry was 276k in March 1983 and 118k in December 2003. Joke from 1988: What do you call a geotech engineer? “Waiter!”

    2. Frank,

      This post was already too long, but I wanted to mention the same phenomenon you describe: employers’ processes for hiring (and their attitude during it) is that of people with a massive surplus of candidates. It’s as if they’re choosing apples from the well-stocked produce shelves of the local supermarket.

      Some of the jobs offered are terrible deals. Such as a supervisory job in a tax preparer firm – an office located in a bad part of town, working weekends and nights, for a job ending in April – for a salary $2 higher than entry-level retail clerks. The seasonal aspect was a killer. That means the job search has to begin again in a few months, after all my momentum was lost, perhaps in a worse economy.

      1. From what I have heard, even applicants for near menial positions have to jump through several hoops in the interview process these days.

        Another fad I forgot to mention, you are often asked to prepare a 15 minute presentation on a topic they will give you day before the interview, and you are expected to have a Q&A session after you give the presentation.

      2. Another change I’ve noticed from the “good ol’ days” has to do with temp/contract work. Back in the day the hourly rate for contract work was quite a bit higher than what a full time employee was paid, about twice as much. Fast forward to today: a six month contract job pays about the same as what I am paid now, but with no benefits, no insurance, no paid time off, etc.. And I would say that if a recruiter contacts me, it’s for a short term contract gig, which tells me that people are accepting them.

      3. Frank,

        That’s an important and ignored point. Gig work shifts the biggest cost – uncertainty, risk, volatility – from the business owner to the worker. Of course, the worker is far less able to carry that risk.

      4. We had a rather large layoff a few years ago. Most of my former coworkers are still stuck in no benefit contact gigs.

  3. Wages haven’t generally kept up with the rise in rents, either, although I suppose the only slices of the country that matter politically (so I am told… regularly) generally already have their houses paid off. The class war has been something of a rout for my entire lifetime.

    1. It does seem as though there has been a conspiracy to inflate the cost of shelter, both at the rental and purchase level. There has been a lot of apartment construction in the past few years, but it mostly seems to be in the “luxury” category, which is unaffordable to many. I see this even in my small town (a Denver exurb). The downtown area has been gentrified, with luxury apartments whose rents are bigger than the average local paycheck.

      A discussion for another day perhaps.

      1. Frank,

        No need to invent conspiracies. Anyone familiar with real estate knows why low income housing is far less profitable than that for the middle and upper classes.

        The former is a tough business, requiring hard and tough people. Custard-head liberals would go broke at warp speed.

        The latter offers quick profits.

      2. And yet, housing used to be affordable. At current prices it’s becoming unaffordable even for the middle class. The median price for a house in my podunky, flyover town is 400K, while the median local household income is only 60K. Historically a price to income ratio of 2-3X is considered affordable, what we have in my town is 7X, which is a recipe for disaster. It’s even worse in other places.

      3. Frank,

        I’m not surprised that you are so misinformed, being a reader of sources like Shadowstats. Here a few sources with real information. Experience has taught me that this is a waste of time, however.

  4. I’ve been studying this issue for some time and have yet to find a good explanation that covers all the data points. Here are two reports that support Larry’s arguments:

    Any time over 35% of the eligible work force is not employed, is by definition, NOT a period of strong employment. For comparison, the Great Depression saw a maximum reported unemployment rate of 25%

    It appears to me to be a confluence of several issues that have varying degrees of importance at different times:
    1. Labor report are accurately tabulated but no longer accurately measure what they were intended to measure because the underlying conditions have changed but the reports have not.

    For example, many of the reports are based on unemployment compensation but an increasing number of employees are not eligible for unemployment compensation, either because their benefits have run out or because they are re-entering the work force after long periods of self-chosen unemployment (such as caring for an elderly relative).

    The corporations are being driven into lock-step by their efforts to minimize costs and maximize profits. The “natural rate of unemployment” theory assumes that companies will break ranks to seize top talent but if corporations view employees as expenses instead of assets there is no reason to do so.
    The state of information technology makes it easy for corporations to quickly emulate other companies successful strategies (in this case to keep costs low and productivity high)
    Although it is happening far more slowly than theorized, automation is changing the need for workers in unpredicted ways that I don’t fully understand yet. The key point overall: it seems to be allowing companies to use fewer people to provide roughly the same level of service.

    But on the flip side of the same coin, if the consumers have less cash because more of them are unemployed, companies cut costs (remove jobs) to keep profits up, which sets up a vicious cycle. The cycle WILL break down but I cannot tell where or when.

    This country has undergone similar periods before but none so deep or so well documented. Historically these periods end when some new technology or event (such as WWII or the Vietnam War) increases internal demand, opens new external markets, or reduces the supply of available workers. By definition, it is impossible to predict when or how these events will occur.

    1. According to the real unemployment rate is about 20%. I’m not sure how they calculate that number, but I believe they include “discouraged job seekers” who have given up looking for work as unemployed and they don’t count part time workers as fully employed, which kind of makes sense to me.

      1. Frank,

        Shadowstats is a cartoon, as source of misinformation. Ten minutes reading it is time wasted from your life.

        The rise of of such sources has been a great benefit to the Left, as they lead the Right into ignorance and delusions.

      2. Like I said I don’t know how Shadowstats calculates their numbers, and 20% seems a bit high. But the government’s 3% U3 figure is even more risible. Even the U6 number (6%) seems low, as that was once considered the full employment rate. If U3 really was 3% there would be rampant wage inflation, as opposed to cubicle dwellers not getting a raise in years.

      3. Frank,

        Total nonsense. You don’t understand the meaning of the U-3 vs. U-6 metrics. Wage inflation is more linked to U-6, which reflects the people able to be drawn into the labor force.

  5. The Man Who Laughs

    “Many employers publish openings with fantastic combinations of high requirements and relatively low pay. They are fishing. It costs them nothing and sometimes they get lucky. I have seen many of these jobs on the local job listing services remain there for over four months. Employers point to those openings as evidence of a tight labor market. In fact, they show the opposite.”

    About all I can add is that I’ve actually seen this, I’ve also seen us fail to hire people who were perfectly qualified because the hiring process was dragged out until the qualified people had given up and gone some place else. They needed to eat, and didn’t have time for HR to pore endlessly over the applications.

    I finally decided that if the bosses wanted to hire they could, and if they failed to hire it was because they never really wanted to in the first place. The sheer number of interviews the applicants had to go through looked to me like a decision not to hire had already been taken. When they want to hire, they can hire. When they don’t, an excuse can always be found.

    1. Peasant,

      “there’s a whole lot of nothing going on where I toil.”

      Totally absurd. The US is having the longest economic expansion on record -= slow, steady, low-inflation growth. Without obvious imbalances of the kind that end expansions.

      “The BDI–as much as I can understand it”

      The Baltic Dry Index is useful for people shipping stuff. It is an almost useless economic as a global indicator, and less than useless as an indicator for the US.

  6. I looked at your links. Yeah, prices are lower in very low wage areas like the deep south. A more useful link would show what prices are like in major metro areas, the ones where where the jobs are.

  7. ‘Inflation’ is ‘on its way’?

    “In November M3 in the United States of America jumped by another 1.0%. In the last three months M3 rose at an annualised rate of 12.5% and in the year to November it was up by 8.5%. (We use the M3 estimates prepared by the advisory firm, Shadow Government Statistics.) These rates of money growth are a clear departure from the pattern (of annual money growth between 3% and 5%) which prevailed for eight years until spring 2019. If the Institute’s emphasis on the relationships between broad money and nominal GDP, and between real broad money and real aggregate demand, proves correct, early 2020 should see above-trend growth demand growth in the world’s largest economy. Given that the American economy is operating with low unemployment, above-trend demand growth implies capacity strains later in the year and risks of higher inflation in 2021. (The explanation for the upturn in US money growth is that to a significant extent the Federal deficit of $1,000b. is being financed from the banks, i.e., it is being monetised.)

    Elsewhere the message is closer to ‘steady as she goes’. The Eurozone also has enjoyed rather strong money growth in recent months, but this feature has not been as marked as in the USA. In China and India money growth in 2019 has been steady at high rates appropriate in these economies with strong underlying trend growth in output. (But India suffers from serious ethnic and religious tensions at present, which may have economic consequences.) Japan’s money growth is stable at a very low rate, while the UK has a money growth recovery in conjunction with a clarification of the Brexit process. The overall conclusion is that during 2020 the world economy will see at least trend growth of demand and output, after a lacklustre 2019. “

  8. Anecdotal: A number of areas have had to adjust for the work ethics of the young replacements for older workers, combined with impact from information technology. Examples are construction and retail. In construction and retail sales, many firms are using part time older workers due to expectations/deficiencies of the young workforce. In manufacturing, many jobs that required learned skills have been replaced by much fewer jobs that the learning requirements are considerably lessened. Add to this are other points made about how organizations are using tactics to keep wages down, and there are many reasons for the apparent discrepancy, IMO.

    I don’t think it is as much an organized propaganda, as much as it is an outdated accounting system with respect to the tactics being used by organizations, such as claiming lack of skilled workers in order to obtain permits for low wage foreign workers.

    My opinion is that all of the mentioned reasons indicate the beginning of what the AI revolution early stages should look like.


    1. John,

      “A number of areas have had to adjust for the work ethics of the young replacements for older workers,”


      “many firms are using part time older workers due to expectations/deficiencies of the young workforce.”

      Evidence? It’s not visible to me. From what I personally can see, firms have a strong (overwhelming) preference for younger workers. Given the numbers – and claims of labor “shortages” – they should be tapping the available workers 60+ more than they are.

  9. Larry, “Anecdotal” is what I stated. I, myself, have seen this is two workplaces, and from talking to managers and owners of construction companies and retail companies who had same problems. Their claims are about the workforce, and how the margins are so low in retail from internet, it is affecting their ability to keep employees fulltime. These are small to medium businesses. Yes, they mentioned wanting to have younger workers, but were having real problems with keeping them. One interesting thing I observed myself when hiring, and have been told by owners and managers are that the young have been taught, according to these managers and owners, to push for a five year deal where they will be guaranteed to get substantial income increase. Also, these young workers had timeliness and attendance problems, got offended easily, and thought they should have an equal voice to even owners on such things as schedules or overtime. More than one person confided in me that they could not run their business that way, and that is why they had part time old workers who dependable about business needs.

    I started asking due to the number of old workers at or past retirement being used by business before I retired, since they were doing work for me and our company, a medium sized industrial site; and I was curious. I myself am one who was hired as a part timer because of the difficulties with young workers. I have friends who are consultants, and they also talked of the pushback during the interview process, and had started a mentoring program with a local university in order to meet staffing needs.

    1. John,

      “talking to managers and owners of construction companies and retail companies who had same problems.”

      Business owners always complain about the pay of employees, just as aristos complain about the cost and quality of servants. Look at literature from long-ago (eg, Dickens). I’ll bet this was true in the first Mesopotanian cites.

      “they mentioned wanting to have younger workers, but were having real problems with keeping them”

      I’m always surprised by American’s unfamilarity with how free markets work. Shortages result from setting prices too low. For labor, “price” includes wages, benefits, and working conditions.

      “these young workers”

      Old people complaining about those kids is another omnipresent fact of life. The whines were deafeningly loud in the 1960s and 1970s.

      “had started a mentoring program with a local university in order to meet staffing needs.”

      Businesses will do anything to avoid raising wages. Even highly profitable businesses. Look at the many articles about pay and conditions in Amazon’s warehouses. But for some reason, these corps always have enough money to pay their senior executives lavishly. It’s no longer enough to give them a rich lifestyle. They get paid enough so that several generations of their descendents never need work again. They become like landed gentry – while whining loudly about the wages of the peons.

      1. Larry; I don’t disagree. Couple of points.

        One is that though they complain, they could be correct. This is true of almost all complaints.

        Another is that I saw this use of persons, at my former employer, at current employer, and with contractors brought in. I also had to deal with their behavior and go through the foreman or manager when work was unacceptable. If they are using these to hold down prices, then that is also how the free market works, as well.

        Yes, I agree the free market works, and that is the primary mechanism that margins are getting so low. Yes, there are highly profitable businesses. But this does not address my point. To my point of information and automation, it will not be these highly profitable that are indicative of the part of the economy I was commenting on, since it is the small and medium businesses that employee most people, and actually fuel a large fraction of our economy.

        The positions I am looking at are ones used in the past as a stepping stone to a better life. What I don’t know is whether there are those who don’t need it and what they obtained. And important in a good accounting, is what I am seeing the start of many, especially young men, disengaging from the economy, as we have discussed here at your site? Because many of the jobs were in the past used by young men to progress up the economic ladder, by skills, or providing money to obtain education or skills for the next step.

        I don’t know, but I found the consideration worth discussing.


      2. John,

        A note about older generation looking at the younger generation: from “The Scarlet Pimpernel” (1905):

        “Bunch of young jackanapes! They’re all alike, these fashionable puppies. Insufferable! What that young man needs is a year or two of hard campaigning – facing powder and shot, undergoing privation.”

        In the 1934 film, these old guys are shown as corpulent and indolent – while the young men (the Scarlet Pimpernel and his team) are lean, fit, bold heroes.

        Some things are recurring dynamics of life.

    1. Georgette,

      “What even is the economy?”

      Let’s turn to the Merriam-Webster dictionary:

      “The wealth and resources of a country or region, and the production and consumption of goods and services.”

      A more technical definition from Investopedia:

      “An economy encompasses all activity related to production, consumption, and trade of goods and services in an area.”

  10. I’ve been reading Streeck, ‘How Will Capitalism End’. I’m partly puzzled by what I have read so far, and partly unimpressed.

    Its similar to reading the so-called ‘Political Marxists’. Its very hard to make out what they or Streeck mean by ‘capitalism’ or what they mean by its ending and replacement by something else. Or what that something else is.

    When you read the Political Marxists, the extent to which there can be functioning markets, mass production, wage labor, and still for the economy not to count as ‘capitalism’ unless it also meets some very subjective and emotional and unquantified critera doesn’t make any sense. Similarly with Streeck, the end is not specified (at least not yet) sufficiently specifically for one to tell whether its even happened, let alone if its likely.

    Much of the vocabulary used in the argument is both undefined and unclear. There are for instance repeated references to something called the ‘means of production’, as if that was a clear and distinct idea with a definite reference. But at least so far he never says what this consists of.

    It reads (as do the Political Marxists) as if Streeck has never worked or spent time at senior levels of a large company in the ‘capitalist’ West. He seems to have no idea how specifically they work, and he seems to have no idea even what this thing called ‘capitalism’ consists of.

    Von Mises may have made the most insightful comment on the subject. I recall that when asked what made a society capitalist he replied without hesitation that it was a stock market and a real estate market. Streeck lists five ways in which capitalism may end, and says he favors a sixth, and seems to think it inevitable. But its not clear whether after this happens there will still be stock markets and real estate markets. In his scenarios the structure of property ownership, surely the essence of what we usually think of as the capitalist/socialist divide, is completely unclear.

    I am not very clear about any of these issues myself. I do agree that there appears to be if not a crisis, at least quite many very disturbing developments at a fundamental level in Western society and economies. But I’m not, at least not yet, finding any help with clarity or understanding in Streeck.

    I’ll carry on reading and see if light starts to dawn!

  11. A paper about the wildly increasing requirements set by employers

    “Structural Increases in Skill Demand after the Great Recession”
    By Peter Q. Blair, David J. Deming, NBER paper, January 2020

    “In this paper we use detailed job vacancy data to estimate changes in skill demand in the years since the Great Recession. The share of job vacancies requiring a bachelor’s degree increased by more than 60% between 2007 and 2019, with faster growth in professional occupations and high-wage cities. Since the labor market was becoming tighter over this period, cyclical “upskilling” is unlikely to explain our findings.”

    Here is a free slidepack about the paper’s findings:

  12. And from what I have read, underemployment is on the rise in Europe and other parts of the world. A full time job with benefits is becoming a precious commodity.

    And if 30 million are effectively unemployed as per the link, then the real unemployment rate is in the double digits, which aligns with my anecdotal observations.

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