Free Lunch: Where will the jobs come from?

Δημοσιεύθηκε: 7 Απριλίου 2015 - 10:59

The long and the short of US jobs woes

Head-scratching is competing with hand-wringing over the state of the US labour markets. Last week's jobs numbers punctured the balloon of optimism that earlier employment growth had inflated. New jobs, amounting to 126,000, was only about half of what had been forecast and the aggregate number of hours worked actually fell. Earlier numbers were revised down, too. And with more sophisticated seasonal adjustment than the Bureau of Labor Statistics normally uses, jobs growth in March looks even worse.

The one bright side that can be glimpsed from this is the intellectual satisfaction that job numbers are now telling a similar story to other US economic statistics. That is to say, a story of sharp slowdown. Free Lunch reported a month ago how now-casting techniques indicated the eurozone (!) was growing faster than the US. That contrast now looks even worse for the Americans. According to the Atlanta Fed's GDPNow index, the US economy ground to a complete halt in the first quarter. That compares with Now-Casting's latest estimate of 2 per cent annualised eurozone growth (and 2.5 per cent annualised for Q2).

As for longer-term labour market prospects, Brookings fellow Harry Holzer examines the much-discussed hollowing out of middle America. There is a well-established polarisation of the US labour market, where traditional occupations commanding middle-range wages and requiring a middling amount of skill or education have shrunk, with most jobs growth in recent decades coming at the top or bottom of the income and skills distribution (and wage growth only at the top). But look more closely and you find what Holzer calls a tale of two middles. The number of jobs in construction and manufacturing has indeed fallen. But a new set of mid-range jobs, especially in healthcare and services, are growing fast. These require some post-secondary education and some of them pay good wages.

While the growth of the "new middle" is not yet enough to make up for the shrinkage of the "old middle", Holzer argues the pace of "new middle" expansion is set to accelerate. In a companion paper, he argues that policy support for skills training can help this process along.

Could some of those "new middle" jobs be assistants to highly creative people? Francesca Mari has written an enthralling report on the "assistant economy" - or more precisely the exotic world of assistantships to the extraordinarily accomplished. It's worth reading not just to learn about the general phenomenon but also for the anecdotes about assistants to people from Susan Sontag to Barack Obama.