South By North Strategies, Ltd.

Searching For “Good” Jobs

In a recent report, John Schmitt and Janelle Jones of the Center for Economic and Policy Research wonder, “Where have all the good jobs gone?”

The U.S. workforce is substantially older and better-educated than it was at the end of the 1970s. The typical worker in 2010 was seven years older than in 1979. In 2010, over one-third of US workers had a four-year college degree or more, up from just one-fifth in 1979. Given that older and better-educated workers generally receive higher pay and better benefits, we would have expected the share of “good jobs” in the economy to have increased in line with improvements in the quality of workforce. Instead, the share of “good jobs” in the U.S. economy has actually fallen. The estimates in this paper, which control for increases in age and education of the population, suggest that relative to 1979 the economy has lost about one-third (28 to 38 percent) of its capacity to generate good jobs. The data show only minor differences between 2007, before the Great Recession began, and 2010, the low point for the labor market. The deterioration in the economy’s ability to generate good jobs reflects long-run changes in the U.S. economy, not short-run factors related to the recession or recent economic policy.

Around The Dial – August 14, 2012

Economic policy reports, blog postings, and media stories of interest:

• Robert Reich lays out “the Ryan choice.”
• John Cassidy explains”how “government initiatives can work.”
• Bruce Bartlett says not to blame Obama for Bush-era policies.
• Truthout makes the case for a postal savings bank.
• Dean Baker explains “what Democrats can learn from Romney-Ryanomics.”

An Avoidable Problem

A recent report from the National Employment and Law Project details the extent to which policymakers refuse to learn from the mistakes that left so many state unemployment insurance systems underfunded going into the “Great Recession.”

States were about $38 billion short of meeting recommended pre‐recession trust fund reserve levels and will need to accumulate approximately $86 billion of trust fund reserves to be adequately financed by the end of 2016. At the end of 2010, the nation’s collective trust fund balance stood at a negative $30 billion. Nationwide, employer contribution rates would have to increase by over 50 percent from 2010 levels for states to accumulate adequate reserves within the next five years. The necessary increase is even more extreme for the most highly indebted states. Realistically, it is unreasonable to believe that states will close this gap without doing further harm to the UI program’s ability to sustain unemployed workers and their families through periods of temporary job loss.
…
Accumulating adequate pre‐recession reserves requires a long‐term commitment and foresight on the part of state lawmakers and employers to raise or maintain employer contributions when there is no existing crisis. Recent observers have pointed out that there is little incentive for myopic state lawmakers to accumulate adequate trust fund reserves (Galle 2012, 2–5). Those predominately large states that were not prepared for the recent recession needed to collect substantially more tax revenue from employers following the 2001 recession to have met the recommended solvency measure. Going forward, an even greater commitment will be necessary from insolvent states for the entire trust fund system to return to solvency over the next five years.

A Budget Cri De Coeur

Mark Thoma lets loose a cri de coeur regarding the unceasing misrepresentations of the budget problems facing the United States.

… According to this narrative, our budget problems have nothing to do with the Bush tax cuts, higher spending on the war, and the the loss of revenue and higher spending on social programs from the recession, it is Social Security and Medicare that are the problem. As for the recession itself, it wasn’t financial executives in the private sector who made the bad decisions that caused our problems (as they made a mountain of money along the way), it was bad government housing policy that was somehow to blame. And, of course, to solve the problem we shouldn’t use higher taxes to claw back any of those large, large gains those at the top made during the bubble years — gains that in the end hurt our economic productivity instead of helping it — instead we should reduce the social insurance for typical, working class households that had nothing to do with causing the crisis. After all, if we were to take back the “rewards” those at the top got for crashing the economy, we’ll take away their incentive to do it again. Can’t have that….

Around The Dial – August 13, 2012

Economic policy reports, blog postings, and media stories of interest:

• Off the Charts defends disability insurance.
• Ryan Lizza of The New Yorker critiques the VP selection of  Paul Ryan.
• Paul Krugman describes “a culture of fraud.”
• Stateline reports on the looming turnover in state legislatures.
• Policy Shop points out that Americans are “more productive, less prosperous.”