The jobs problem (some rambling Friday-night thoughts)

Last updated on: January 25, 2014 at 12:55 am by Jane the Actuary

The jobs problem (some rambling Friday-night thoughts) 2014-01-25T00:55:00-06:00 Jane the Actuary

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So, as many of you know, I consistently follow relatively few blogs, but one of those is Megan McArdle at Bloomberg View, and I and attempt to follow the “how to get blog readers” instruction of writing up some witty comment with a link to a lengthier treatment in your own blog post, more often there than on any other blog. (And, from the blogspot traffic sources report, her readers are more willing to follow such a link than on other blogs.) Now, part of that is because the outdated internet browser on my work computer* doesn’t load comments on National Review Online, but she also does toss out topics for discussion with reliable frequency — though it would help if she would talk about pensions more often, of course.

(* Mind you, I’m not spending my whole workday blogging or reading blogs, but it’s in the nature of my part-time schedule that I have the flexibility to, say, take a long lunch break, honest!)

Anyway, today’s post was on a Slate article proposing that the government guarantee jobs for all. The Slate article itself is rather flaky and poorly thought out, especially for someone who claims to be a Ph.D. candidate in sociology. But it links back up to a continuing concern of hers; as she says, “As longtime readers know, I think the decline in opportunity for college graduates is a big problem.”

There was also a post on marginalrevolution.com on a recent study on income mobility, which, I confess, I’ve only partially read.

And I went back to the family stories I wrote about earlier this week. Sure, there are other interesting family history stories, and a lot of research we haven’t done yet, but what intrigues me are the life stories: Amelia, at the turn of the century, twice widowed with four children, taking in laundry to support her family, with the eldest daughter leaving school to work alongside her, and, one presumes, the children pitching in after school; and then Leo, in the 40s and 50s, supporting his salary on, first, a barber’s, and then an insurance salesman’s salary. Mind you, the family wasn’t particulary wealthy — they were able to buy their home in the suburbs in the 50s due to a modest inheritance, and my mom at Thanksgiving shared her memories of the house, small and old and her father’s choice because of the 10 acres it included (which I attibute to the immigrant in him). My mother attended nursing school because the students earned their way through by working at the hospital, and later helped her younger sister with college money.

My dad, on the other hand, had the classic “work his way through school” story in the late 50s/early 60s– well, not quite; I know there was some money coming from his family, but he worked at the Pizza King, and in the kitchen at his fraternity house, and was in ROTC (though not with a scholarship) as well, while studying engineering.

Now there’s increasingly a mood that the “American dream” is fading. Partly that’s coming from college graduates who can’t find the jobs they’re expecting, but I’m not sure how much there’s a significant decline in job opportunities and how much of this is changed expectations — the gender studies majors who are stuck waiting tables — or an increase in college students without a corresponding increase in high-skilled jobs. I’m the first to admit that I haven’t really gathered statistics on this, though.

But there are a couple key problems contained in the “college kids can’t get jobs” mantra. Tuition has escalated unsustainably; the University of Illinois reached the $100,000 marker (for an in-state student, including room and board) according to reports in today’s paper. And there are too many jobs for which a college degree isn’t really necessary but demanded by employers anyway. Consider my mother — her R.N. was earned at Deaconness Hospital in St. Louis; this is now a for-profit college offering four-year and master’s degrees in nursing (it was acquired by DeVry, according to Wikipedia), with tuition and fees of $19,000 per year.

Or consider my father. Not that he didn’t attend college; he studied mechanical engineering at Purdue. But a different part of his story — when he was still in high school, he had one job after the next, helping build homes, repair cars, and worked on the family (hobby-sized) farm and developing other skills that meant that when he was assigned to a supervisory position in a vehicle repair unit in Germany during his tour of duty there, he was ready, at the age of 23, to supervise a group of 20 civilians and enlisted men, and had the car repair skills to supervise not only the workers but also the quality of the work. Does a college graduate in 2014 have this sort of life experience? And, without a collge degree, can a young person build themselves into employability?

But the problem stretches beyond just young people. It’s bigger. The rewards are becoming increasingly outsized for the highly-skilled, with the right skills, and wages are stagnating for the working class, due to the twin competitions of low-cost workers overseas and (illegal) immigrants in the US willing to accept low wages. Or offshoring and H1-B visas impacting the middle-class. The “invisible hand” may do many things, but it can’t remedy this, at least not in the short-term, and not without significant dislocations for people. Heck, I read once, some time ago, speculations that the stagnation in wages since the 70s could be connected to the entry of women in the workforce — that the growth in the labor force reduced wages in a supply-and-demand fashion.

Now, to some degree, the jobs that everyone remembers from a golden age of supporting your family with a high school diploma were generally arduous, and the number of physically arduous jobs, that pay well because of the physical difficultly of the jobs, have dropped substantially. They also generally required far more than 40 hours per week, or at least offered the prospect of pay-boosting overtime. I doubt my grandfather punched in at 8 and out at 5. And the Greeks? They’re known for small businesses (Greek immigrants, that is; not Greeks in Greece, who are known for preferring cushy government jobs), and my Greek side of the family was no exception — and small businesses mean a lot of hours.

So is that the answer? Do people need to be more entrepreneurial? Both in terms of literally starting businesses, and developing practical real-world skills with an entrepreneur’s mindset?

I don’t know. I haven’t seen a solution, in anything that I’ve read from the right-of-center or left-of-center worlds. Watch this space? That’s something I’m watching for, or perhaps some hints of a way forward that I can assemble into something more.

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