Friday, January 13, 2017

If America wants to create substantially more jobs we need deregulation, supply-side tax reform, better technical education, and most importantly we need to boost the rate of immigration

See About those “discouraged workers by Scott Sumner.
"Some people argue that the 4.7% unemployment rate is misleading.  In fact, our PEOTUS makes that argument, citing figures as high as 30% or 40%. There are tens of millions of workers who are not even trying to find work (so we are told) because they are so “discouraged” by 4.7% unemployment and the Obama record of 200,000 new jobs a month for the past 7 years.  And they lack the education to do work like computer coding. But then I read articles like this:
The development boom that’s changing downtowns across the country—and adding new units in hyper-competitive markets—has also led to an acute shortage of qualified construction workers, which is starting to weigh heavily on future projects and planning. As of April 2016, there were over 200,000 unfilled job openings in building construction, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey(JOLTS).
Wait, aren’t construction jobs supposed to be the sort of work that is appropriate from non-college educated workers?  What am I missing?  Yes, some construction jobs are highly skilled, but not all.  Heck, even I have done painting, drywall and roofing.

There simply is not much “slack” left.  Many of the long-term unemployed will never work again, even if we have a 1969 or 1999-style economic boom. 

Trump loves big projects, and wants to spend a lot on infrastructure:
“There isn’t much capacity left in the construction industry,” says Julian Anderson, President of Rider Levett Bucknall, North America, a property and construction firm. “There’s a big labor shortage, and construction unemployment is down to 4 percent. It’s so nuts in LA and San Francisco, it’s gotten to the point where it’s probably turning off development.” Anderson says that proposals to deport undocumented immigrants, who make up a sizable portion of the construction workforce in some markets, may severely exacerbate the issue.
Confused?  Join the club.

How about a career in law enforcement?
Economic and social changes have made it harder for police departments to keep their forces fully staffed, and lead to increasingly desperate recruitment.
The Los Angeles Police Department was short of nearly 100 officers as of mid-December—only 1% of its total workforce, but still enough to be felt on the ground, says Captain Alan Hamilton, who runs recruitment for the department. Philadelphia had 350 vacancies, largely due to a spate of retirements. Last spring, Dallas cancelled two academy classes for lack of applicants; its preliminary applications dropped by over 30% between 2010 and 2015. In 2012, the ratio of police officers to population hit its lowest level since 1997, according to Uniform Crime Reporting Programme data published by the FBI.
The dynamics underpinning the shortages vary by department, but there are national trends making it harder for police forces to attract applicants. The first is a strong economy. Nelson Lim, a researcher at the RAND Corporation, a think-tank, says this is nothing new. When plenty of jobs are available, people are usually less motivated to enter dangerous professions. Police forces as well as the armed forces tend to field less interest in boom times.
(The article mentions a slight uptick last year in police fatalities, but they are still down sharply from 10 years ago.)  You see similar stories in manufacturing. Yesterday I heard on CNBC that there is a severe shortage of welders in manufacturing, with 300,000 positions unfilled.  This contributes to manufacturing going to places like China.  Companies in all sorts of “working class” sectors are having trouble finding qualified employees at current wage rates.  Is the problem a tight labor market, or a lack of technical education?  I’m not sure, but I don’t see much evidence for the “robots stealing our jobs” claim.

The implications are clear, if America wants to create substantially more jobs, we don’t need monetary and fiscal stimulus—we need deregulation, supply-side tax reform, better technical education, and most importantly we need to boost the rate of immigration.

PS.  I recall that a substantial share of police officers are now college grads, so I don’t mean to suggest they are all low-skilled jobs."

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