That earlier CNBC piece I profiled about "structural unemployment" and the idea that many U.S. manufacturers-particularly Siemens Corp, the American arm of the German tech giant Siemens AG- have a lot of job openings but don't think they can find many qualified Americans got me to thinking.
http://diaryofarepublicanhater.blogspot.com/2011/10/structural-unemployment.html
For one thing, of course, as I suggested in that article maybe those of us who are unemployed should be looking at places like Siemens as according to that CNBC piece unemployment is lower in the manufacturing sector (8.4 percent) than the overall economy (9.1 percent).
The second thing it got me to thinking is that this is really at the crux of the current debate of those who want more fiscal and monetary stimulus-count me in that number-and those who don't. If you believe that unemployment is totally structural then there's no reason to do any more stimulus. Or is that right? It seems that even if you did believe that it still wouldn't necessarily mean the government should do nothing but wait. For the structural problem would be that Americans don't have the necessary skills for the manufacturing jobs that have developed over the last 2 years. If that's true then your question is how do we see that all these improperly educated Americans are properly educated.
Then again the structural theory and the cyclical theory aren't necessarily mutually exclusive. There's no reason you couldn't theoretically think that both are at work to various degrees. You could believe that they both in roughly equal terms contributed to it or that one or the other was mainly the problem but that the other makes some contribution. Really if you believe it's mostly structural what is the answer then?
Again doing nothing would sentence a generation of Americans to unemployment or under-employment. There would still be some necessary work to do on improving our school system. Indeed apart from this question and its relevance we do need to do something about our schools which have more and more students coming out with an inadequate level of competence in math and science. It seems that part of the answer for these jobs may be vocational training.
Going with the theory that in the future there will be a lot more U.S. manufacturing jobs this would mean a major change in the American job structure. If this were true then we are just leaving a 30 year bear market in U.S. manufacturing jobs. This period (roughly 1979-2009; we're rather arbitrarily trying to make it a round number like 30, in truth the bear market started at the end of the 70s and ended in 2009 and may be more like 32 years say) was distinguished with a radical deskilling of the American workforce. In the first 10 years it hit traditional blue collar jobs in manufacturing but in the recession of 1990-91 we had "the first white collar recession."
This was short lived and after we had the Internet boom of the Clinton years that saw 35 million new jobs created. These jobs though were not the same kind that were lost in the 80s. These were sort of medium-skilled office jobs. The 90s were for the most part a good time, under Clinton we saw the longest peacetime economic expansion since WWII. Still there was the Nafta agreement that though we didn't necessarily feel immediate pain was another contributing factor to a further complication in the U.S. job market with the recession in 2001.
Between outsourcing, globalization and the productivity gains of the Internet boom, the labor market contracted markedly. Initially 3 million jobs were lost during the recession of 2001. While most of these jobs were replaced they were mostly to lower wage, service jobs. This was the second phase of the Great Contraction of the 30 year bear market for American jobs. While the first phase was mostly in blue collar jobs that, while skilled required little education, this second leg down was in white collar jobs.
I would say that what changed in 2001 was that for the first time in U.S. history, certainly in modern history, it was possible to get a good four year degree and yet have no job waiting for you when you left college. In another unkind wrinkle this time was also concurrent to the rise in credit exapansion but the Great Moderation had the effect of actually increasing the effective debt burden of American students in large loans.
This history of the great bear market in American jobs of course is no conjecture but actual history not up for debate. What is debatable is that we are now coming out of it.
It's important to understand what these new manufacturing jobs are not. They are not the return of the old blue collar jobs lost in the 80s. Those jobs were skilled jobs but didn't require extensive education or a strong math, science, or engineering background-these jobs do. The good thing is that they are actually very well paying.
"Workers at the very low levels can earn as much as $30 an hour, with annual salaries for engineers ranging from $75,000 to $100,000. At Siemens, the average potential salary offered for its open positions is $89,000 a year."
http://www.cnbc.com/id/44888058
As noted there's no reason that a belief in structural and cyclical unemployment have to be in conflict. Indeed the longer cyclical unemployment is allowed to continue the more of it will become structural-over time more of the unemployed will see their skills erode.
So a belief in structural unemployment is not a reason to do nothing necessarily. In addition it would argue all the more persuasively that we need to get out in front of a comprehensive plan to grow the alternative energy economy now.
No comments:
Post a Comment