A new
Wall Street Journal story
on how many men aged 25 to 54 can’t find work, fails to mention but
nevertheless shellacks an
embarrassing New York Fed paper released earlier this week. The Fed’s propagandists tried to
argue that labor markets are tighter than is widely believed. The basis for the
authors’ sunny view? Changing demographics. Their proof? An absurd “normalized,
demographically adjusted,” seasonally adjusted, business-cycle free employment
to population ratio, to wit:
For each of the 10.2 million individuals in
our sample, based on their decade of birth, sex, race/ethnicity, and education,
we select one of our 280 estimated career employment rate profiles. Using the
worker’s age, we calculate the predicted employment rate for that individual
based on their selected employment rate profile. We then calculate the weighted
average of these predicted employment rates across all individuals in a given
time period to generate an estimated E/P ratio for that time period. We repeat
this exercise for each time period covered by our data.
Oh, and after that
they seasonally adjusted and then “normalized” the data.
They might instead
have looked out the window, say at the long lines any time a big employer opens
a new facility, or readily-available
information like this:
ERE reports that “Although it varies with the
company and the job, on average 250 resumes are received for each corporate job
opening.” In addition, out of every 1000 people who view an online job posting,
100 people will apply, 4 – 6 will be selected for an interview, 1 – 3 will be
invited for a final interview, 1 will be offered the job, and 80% of those who
get a job offer accept it.
Admittedly, the
Internet makes it vastly easier to apply for jobs than the old-fashioned
written submission, but this sort of bid to cover ratio isn’t consistent with a
strong employment market.
Now if you had managed
to take the New York Fed’s porcine maquillage seriously, you’d also have to
believe that employment conditions hadn’t deteriorated within particular
demographic groups. The Wall Street Journal shows how the very backbone of the labor market,
men in their prime (for measurement purposes, 25 to 54), are out of work to an
unprecedented degree. The story is worth reading in full; it has a larger-than
usual number of anecdotes, including a 53 year old community college grant writer
who was fired as a result of budget cuts, to a 29 year old who was laid off
shortly after getting his first job as a public school administrator, to a 52
year old Army staff sergeant who was discharged six months prior to being
eligible to receive a full pension as a result of a training injury.
Key sections:
More than one in six
men ages 25 to 54, prime working years, don’t have jobs—a total of 10.4
million. Some are looking for jobs; many aren’t. Some had jobs that went
overseas or were lost to technology. Some refuse to uproot for work because
they are tied down by family needs or tethered to homes worth less than the
mortgage. Some rely on government benefits. Others depend on working spouses….
The trend has been
building for decades, according to government data. In the early 1970s, just 6%
of American men ages 25 to 54 were without jobs. By late 2007, it was 13%. In
2009, during the worst of the recession, nearly 20% didn’t have jobs.
Although the economy
is improving and the unemployment rate is falling, 17% of working-age men
weren’t working in December. More than two-thirds said they weren’t looking for
work, so the government doesn’t label them unemployed….
Economists who had expected the fraction of
men working or at least looking for work to be approaching prerecession levels
by now are dumbfounded. “It’s looking worse and worse,” said Johns Hopkins
University’s Robert Moffett, who has researched the subject. “It’s unexpected.”
The story notes that
workforce participation by women in same age group has increased over time,
from one third in the 1950, to the roughly 70% level attained in the 1990s that
is largely intact today.
One impediment is that
the worst-paid jobs are sometimes not worth the all-in costs:
Since the early 1970s, the average inflation-adjusted
wage for high-school dropouts has fallen about 25%; for high-school graduates
with no college degree, it is down about 15%. Simply put, many of the available
jobs don’t pay enough to get men to take them, particularly if securing a job requires
moving, long commutes or surrendering government benefits.
By contrast, a couple
of the stories feature the cashiered men getting job training in the hope of
securing work in a new field. As many NC readers probably know, this sort of
rehab effort in most cases is tantamount to a scam. Even when an older worker
obtains a meaningful credential, the job market is so slack that most employers
can find workers who’ve previously done the same sort of work. And to the
extent they are willing to hire someone fresh out of school, most employers
prefer younger workers who are perceived to be more malleable and energetic.
Lambert raised a
question that the commentariat might be able to help answer: what happens to
men in this fix? I told him that he shouldn’t be surprised, there’s money only
to research things that show things are really swell, and not ferret out the
many manifestations of distress and dislocation.
The article makes
clear that at least some of the men are on trajectories that can’t be sustained,
borrowing and selling assets yet starting to fall behind on payments. Clearly
(again as the article indicates) some wind up living with relatives. And even
with budget cuts, we do have enough in the way of social safety nets to
forestall the establishment of Obamavilles. But I wonder how many people are
living in cars, or couch-surfing (meaning one step away from being homeless),
or (as one reader found out over the summer) renting rooms in trailer camps.
The duration and
severity of unemployment among men in their peak earning years suggests that
there is both more suffering than is readily apparent, and that this group is
also likely to wind up impoverished in their old age. These men, with their
sense of identity often strongly vested in being producers and breadwinners,
face a grim future in psychological as well as financial terms. To put it more
bluntly, this level of unemployment is suicide futures.
Poster's comments:
1) It
is one thing to "pursue your dreams, it is another thing to pay a mortgage
or rent, and to put food to eat on the table, day in, day out.
2) Having means to do the above is a big deal.
Mostly it is about our Families, and not ourselves.
3) Most
"means" these days requires both parents to work to pay the bills.
Most that will suffer will be from this very large cohort.
4) So many still seem to deny reality. For
them, it is probably easiest for others to just let coming bad things now
happen, people to suffer, depend on present tax benefits, and many people to
now die who did not plan on that, especially when kids are involved.
5) Said
another way, reality has a way of finally getting a lot of people's attention.
6) Many
people who did not plan to pick up the pieces are probably going to be bitter,
too. Raising a grandchild or grandchildren as one's own is a lifetime
commitment, and an expensive pain in the tail as most parents know. And chances
are grandparents will die first, and then what do the remaining children and
adults do? What choices do they have?
7) The transition
time will probably take parts of cool weathers, cold weathers, and warm
weathers. Public riots and other such degradations to the high quality of life
most presently enjoy or can aspire to will be real attention gainers. Said
another way, deeds and facts and moaning children will always trump words. One
cannot eat words.
8) What
happens when tax supplements and other such artificial human machinations come
to an end?
9)
Charity as a course of action is coming back in ways many have not
imagined. Now most people will still work, get a roof over their Family's
heads, and put food on the table for their Families. It is the
"other" cohort, like 25% more or less, that will truly need our
assistance, or so I think. And they will probably be both embarrassed, and
touchy, about the whole affair as it unfolds. What a shame.
No comments:
Post a Comment