Do you know how you’re going to benefit from this screwy economy? There are lots of opportunities to win or lose. How do you make sure you get something out of this world? How do you make sure you land one of the good jobs, and avoid the pitfalls of a fiercely competitive market?
Workforce Data and Inequality by Education
Jeffrey Sachs, the noted economist from Columbia University, wrote a brief overview of the jobs market in the US. Unemployment is near a ten-year low in the United States. This is getting into the news because it kinda looks like Trump’s policies are having a positive impact. But it’s tricky.
What is interesting is the great divide between those with a university degree and those without. Sachs diverts our attention to the more-accurate employment-to-population (EP) ratio which is currently 60.1% “meaning close to three of every five adults is working, still down sharply from the peak rate of 64.6% in early 2000.”
The EP ratio is varied by education level, at 72.1% for those with a degree and 54.9% for those with only a high school diploma.
Sachs notes that job losses in the past decade have been mostly caused by automation and not globalization. He cites the self-serve kiosks at McDonald’s as an example. Policies aimed at saving and creating jobs through restrictions of trade and immigration are “doomed to fail.”
Sachs recommends that America prioritize quality education and job skills, preserving and improving the vital role of public schools. He also recommends America boost the incomes of lower-skilled families through government transfers to break the multi-generational cycle of poverty that discourages skill attainment by the kids. Sachs also points to countries that provide a higher quality of life through better government spending in health care, child care, and other programs, which boost the quality of life regardless of job success.
Public Policy and the Political Divide
I personally agree with Sachs, but I lean that way anyway. I’m well-educated, I come from a union family, and I live in an urban area. I also work in the public sector, and I’m Canadian.
I think the hardest thing for liberals to understand is the opinions of those who are locked-down by hardship and who decline this “expert” help. It’s true at the aggregate level that we should ensure people get help. But at the individual level, people who have actually been poor perceive that overcoming hardship is a case of perseverance, getting out to look work, staying away from high-risk habits, and keeping an eye out for the occasional physical threat. If there are millions of people who have this individual opinion, it bundles together into a block of pro-market voters. The prescription of public-policy solutions seems policy-correct but off-target in the messaging.
Meanwhile, new technologies will disrupt every sector and make billions for those who create or innovate these new solutions, leaving everyone else in the dust.
It’s hard to make sense of it all. To understand this, you need to know that there are secret whispers amongst all economists that “everything causes everything else” in a big hot mess. It’s still possible to have a thriving economy for strange reasons. Trump could still cause the economy to grow by accident. To what we attribute our personal success or failure is frothy right now, and it’s reasonable to not take anyone’s judgments to seriously, including your own.
The simple question we should ask when a few big winners bring in the gold, is will you get your cut? The winners think they get to keep it all. We’ll see.