I'm deeply skeptical of any explanation that claims that we have both a "shortage of labor" <i>and</i> "downward pressure on wages":<p>> <i>If men and women from the ages 25 to 54 took part in the labor market... [t]hat would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor...</i><p>> <i>Trade with China flooded the U.S. with cheap imports, forced domestic firms to shift operations overseas and put downward pressure on wages of less-skilled Americans.</i><p>There's an obvious capitalistic answer to this problem: If you're "crying out" for labor, then you may need to offer more money. This will encourage more people to work, or to acquire the skills you want—look at all those coding bootcamps, for example.<p>Claiming that there's a labor shortage <i>and</i> downward pressure on wages is an extraordinary claim, and it requires a detailed explanation. Otherwise, the obvious assumption is that somebody wants specialized skills for below-market prices. If markets are good at one thing, it's adjusting prices to balance supply and demand.
I can squeeze myself into that group due to long extents of unemployment in my prime years and I:<p>- graduated college early<p>- graduated law school early<p>- was a judicial law school<p>- co-developed and sold a patent pending business method for the automated calculation of fees in statutory litigation<p>In my specific case, especially in law, one thing holds me back (essentially placing me on a do not hire blacklist) I have a blemish on my criminal record for a possession of marijuana charge when I was 21 years old. Law is an old school industry that doesn’t generally overlook that type of thing, I even had 1 interview end immediately right when that was asked/disclosed during the interview itself. But even outside of Law I have applied to hundreds of jobs without ever getting interviews, I have applied to all the tech companies (in legal positions) without an interview. I have probably even applied to a dozen or so YC companies and never a single interview, YC even invested in a start up that is supposed to help people with criminal records get jobs and I reached out for assistance and was told they couldn’t assist me. This brings me to my second point, like there are “blacklists” and policies against candidates with criminal records, there are just plain old blacklists and I bet most of this 3.5 million are on them.<p>It’s not just People with criminal records either, people with poor credit are on blacklists, people with employment gaps are on blacklists. These blacklists are both internal company policies but also in some cases real shared lists between recruiters and other lists HR checks. I’ll personally be alright because I can make money without a <i>job</i> but most can’t and need traditional emoloyment. And they will never get a job because they are in in this endless cycle of employment gap and poor finances (bad credit) that can never be rehabilitated because of mindless policy. This also explains a class of people ready and willing to be exploited in the gig economy.
I personally know several people who are no longer competitive in various jobs due to the massive influx of illegal immigrants. These are tradesmen, landscapers, and others who used to be able to support their families and live in the area. Many of them now commute long distances (so they can live in lower cost areas) for far less pay. Their children are not following them into these jobs. And its not because they're unwilling to do the work. They're priced out because their own government is unwilling to protect them from these predatory practices.
There has to be a point where mere unemployment isn't stigmitized. Of course, being lazy, unproductive, and at worst destructive has to be condemned/disincentivized, but the association of unemployment to unproductive and from unproductive to some sense of worthlessness/leeching has to be amended in our society. Whether it's UBI, an increase in non-profits, and/or a proliferation of diverse and meaningful government funded projects (arts, public works, infrastructure), there are many ways to put people to meaningful work and utility besides working for a for-profit corporation. I think overcoming the stress induced by higher unemployment produced by automation will be one of the biggest societal challenges America (and beyond) will face in the coming decades. The outdated, 20th century model of work hard (for a company) -> be happy/fulfilled/successful will change. Ultimately, I think automation is for the best: let humans do what they do best (be creative, think abstractly, form and implement new models of the world/society/some concept, learn/iterate/improve/adapt) and let machines do what they do best ([generally speaking] automated tasks that require little improvisation or flexibility).
I'm in my prime and relatively competent. The reason I'm broke working on my own startup and not at a company is because every company or successful project I've been a part of has not led to my success as an individual.<p>FTE at a startup is high risk low reward. You might think with funding a startup is not high risk. It is. You are giving up the huge salary you'd get a a megacorp. And don't even get me started on the common stock issue.<p>FTE at a megacorp is medium risk medium reward. Not high enough reward until you get to the higher levels - difficult to do.<p>And also the dull monotone reward signal of direct deposit every two weeks is so incredibly boring.<p>So now I'm left bootstrapping. The only thing left with high reward. It's hard. My insurance sucks. Trying to work with other companies is obnoxious. Every app store takes 30% and thinks they have employees without the paperwork. One app store I built something for requested(demanded) never ending meaningless changes then released a copy of my idea without telling me. It wasn't even that good of an idea in retrospect.<p>The game is rigged and not optional. People everywhere hate rigged games.
<i>3.5 million Americans could either be at work today or looking for jobs. That would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor.</i><p>Yeah right. It's my experience that companies do not care about picking up anyone who is not already perfectly tailored for the role needed. If that person hasn't been found, the req just sits there. Sometimes for a year or more. That there is some "unfilled gap" of jobs is a fallacy.
There's a lot of challenges, automation, globalization, immigration, poor schooling, poor family life, discrimination, clueless human resource departments, unjust stigma from encounters with criminal justice system.<p>All these things are issues, part of the reason many people can't work.<p>With all that in mind, some (largish?) percentage of people not working are simply unemployable. As in, they won't be able to do a job. Or they will make more trouble than they will put out so are net negative to have employed and thus don't stay employed. I don't know what can be done about this, probably feed them and call it good. Not sure everyone is owed a job, at least the way the system is set up now.
<i>>Higher minimum wages are probably another cause.</i><p><i>>After declining in inflation-adjusted terms from 1998 to 2007, minimum wages rose almost 11% in real terms between 2007 and 2016, Abraham and Kearney estimated. Firms may have outsourced jobs or spent more on automation to offset the higher costs of low-skilled labor.</i><p>Is it just me, or is this a shockingly misleading paragraph? That minimum wages rose in real terms tells us nothing. They may have kept in place with inflation, or they may have even continued to fall in inflation-adjusted terms. This is not an apples-to-apples comparison at all.
Not sure why people are shocked by this, it's just the basic principle of diffusion.<p>As long as america continue to allow free trade our wealth and jobs will flow out of the country as countries seek cheaper labor and sell it right back to America with no restrictions. The standard of living is raising in other countries while lowering in the US. Labor is already getting too expensive in China for cheap goods so companies are beginning to look at other countries for cheap labor, or bring manufacturing back to the US and us automation to make up the difference.<p>The US really has no incentive to allow this to happen. We have the largest market in the world and could very easily do what China does if other countries want access to it. The US allows anybody into our markets while China bends them over the bargaining table requiring them to give up IP and form joint ventures with Chinese companies. What incentive does the US have to do "fair" trade? We have all the leverage in any negotiation but for years haven't used that leverage. At some point we're going to have to or the citizens are going to either rebel or accept lower standard of living, lower income, and lower life expectancy.<p>I'm starting to believe that the reason Washington DC does nothing about the opioid crisis is because it benefits them. If thousands of unemployed, heavily armed rust belt men were not strung out and dying from addiction they probably would have organized and marched on DC a long time ago and got payback on the politicians who have sold them out for personal gain.
<i>Next on tonight's news: disability cheats, the millions of Americans who could work, but don't.</i><p>Yep, I'm a cynic.<p>Then, there's this:<p>"<i>After declining in inflation-adjusted terms from 1998 to 2007, minimum wages rose almost 11% in real terms between 2007 and 2016, Abraham and Kearney estimated. Firms may have outsourced jobs or spent more on automation to offset the higher costs of low-skilled labor.</i>"<p>I was unaware there were many minimum wage jobs that could be outsourced or replaced. Most are in the service industries, right?
I didn’t read the study, but an even bigger factor than SSDI is Medicaid expansion. Free insurance with no co-pays and deductibles is worth a lot of money if you consume any healthcare services, and you can only get it if you <i>don’t</i> earn more than 140% FPL.
On the one hand, US is doing great. US grew 3% annualized last year, on a base of 19T, the most in the world. That's very impressive considering how big the base is to even have such a big percentage. You can compare that to China, where they had to keep reporting a fake 7% growth despite their provinces confessing to a 20-30% fake revenue. In the last 40 years, America's middle class shrank 7%. However, the lower middle class shrank 7% as well, and the upper middle class grew 16%. (<a href="http://money.cnn.com/2016/06/21/news/economy/upper-middle-class/index.html" rel="nofollow">http://money.cnn.com/2016/06/21/news/economy/upper-middle-cl...</a>) . Implying that alot of the lower middle and middle had moved up. Especially in certain cities like San Francisco or Santa Clara, where there is just an abundance of $130k+/year jobs (and contrary to popular belief, one can easily save $50-60k/year by renting a room in a house at $1000/month).<p>On the other hand, it seems like the lower class has barely budged, and has remained in place and their quality of life has suffered. They have been losing manufacturing jobs to China and other countries (20M at the height in 1970, 12M currently <a href="http://money.cnn.com/2017/04/07/news/economy/us-manufacturing-jobs/index.html" rel="nofollow">http://money.cnn.com/2017/04/07/news/economy/us-manufacturin...</a>). However, now with an administration dedicated to bringing jobs back from overseas (with focus on manufacturing), and enacting tariffs on countries that competes by flooding the market and destroying local competition, the jobs for lower class should be growing starting this year. The current solar/washing machine tariff, and upcoming steel and aluminum tariffs against China should help.
Causal statements. No experiment means you shouldn't make causal statements.<p>You can have natural experiments, but I don't see any. Did they try kidnapping Congress and forcing them to do a total embargo on China? Seems a no.