David Brooks On High “Structural” Unemployment

Funny David Brooks brings up structural unemployment in his editorial today as I have a big post tomorrow on this. (UPDATE: It’s a research note about how structural unemployment arguments are based on flawed and uncorrected data, and it’s online here..)

But for today, Brooks:

So Americans should be especially alert to signs that the country is becoming less vital and industrious. One of those signs comes to us from the labor market. As my colleague David Leonhardt pointed out recently, in 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. One-fifth of all men in their prime working ages are not getting up and going to work…

Part of the problem has to do with human capital. More American men lack the emotional and professional skills they would need to contribute. According to data from the Bureau of Labor Statistics, 35 percent of those without a high school diploma are out of the labor force, compared with less than 10 percent of those with a college degree.

Matt Yglesias and Jamelle Bouie respond, both noticing how the Great Recession is missing from the narrative.

I would throw in two things. As for “human capital”, here’s the employment rate of 20-24 year old college graduates that Charlie Eisenhood dug up:

Around 5 percent more college graduates ages 20-24 are not getting up and going to work.  It’s difficult to argue that they need to go to college, because they did.  It’s difficult to argue that they can’t move to new jobs (unlikely to be homeowners) or suffer high health care costs (doesn’t health care reform allow employers to push their health costs onto their parents’ employer?).  Unless we think that the graduating class of 2008 is fundamentally worse than the graduate class of 2006 I don’t see a technology problem.

Also for fun, the graduating classes post-Recession have increasingly large student debt loans, which should lower the reservation wage they’ll accept due to liquidity pressures.  So the idea that everyone 20-24 is on vacation is harder to accept compared to earlier years.

There’s an argument that 20-24 year olds are waiting longer for their first job since income and career paths are determined by one’s first job.  But that begs the question of why they are waiting, and amplifies the misery this extended period of joblessness is causing for people.

As for the FatherBringsHomeTheBaconEconomics of the Brooks piece, before we declare permanent gynohegemony over the labor markets can we mention that women have also lost 1.6 million jobs in the recession?

It’s worth noting that men are adding jobs right now, while women are staying steady and have actually lost jobs over the past few months. Normalizing the employment numbers to January 2010 for people over 20 we see that anemic job growth of the past year and a half has gone to men, who have added 2% more jobs since then:

Welcome to the recovery.

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14 Responses to David Brooks On High “Structural” Unemployment

  1. chris says:

    Swapping the colors between the last two graphs is mildly confusing. Also, it looks like the job loss for women in the second graph isn’t measured from the peak in women’s jobs, and it’s not clear what it *is* measured from.

    Other than those minor graph nitpicks, I think you have an excellent point. Furthermore, if Brooks were right about this kind of Great Vacation narrative, wouldn’t we see lots of job openings that nobody is bothering to get up and apply for? That’s the precise opposite of the actual current situation.

    It’s not like it’s hard to measure whether people don’t want jobs or can’t find them; Brooks just didn’t bother to look at the evidence before pontificating. The sooner Brooks stops getting up and going to work, the better informed we’ll all be. He lacks the professional skill to preferentially write things that are true.

  2. Victoria Merolla says:

    I think this is a pretty shallow look. There is way more to it than people not wanting to get up and look for a job.

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  4. Mary says:

    We have a high level of structural unemployment because we have out-sourced (since NAFTA) the lower level talent that used to perform basic labor, as China, India, Vietnam, and every other cheaper corner has abundant labor for the manufacturing jobs, far less worker protection and costs a fraction to produce.

    Simultaneously, we in-source the best talent from around the world for many available specialized jobs because we have “inadequate” educated talent to address these needs, yet we also are cutting our educational institutions that we need to produce this talent. I suspect that industry and the government isn’t really that concerned about this, as in-sourced talent and off-shore knowledge centers work just fine. Costs are lower there, too, for this higher level of talent.

    In the new book TREASURE ISLANDS, an extensive documentation of how offshore financial banking works, by Nicholas Shaxon, estimated that 83% of the largest US corporations and 100% of the largest global corporations utilize tens if not hundreds of thousands of shell accounts, hiding and shifting money, strategically organized and opaquely implemented to shuffle money globally. It is in the interests of Corporations who seek to pay as little as possible, to throw their hands up and decry the inadequacy of our domestic workforce. Such a pity. This is a facade that serves the corporation and further validates the offshore model of escaping taxation and finding ways to enrich executives (and shareholder/speculators). As in the mortgage plunder where the banks were recapitalized (see Matt Taiibi’s The Housewives of Wall Street, Rolling Stone), we workers only have ourselves to blame for not getting up and going to work in the morning.

    Meanwhile, my niece worked for a couple of years in a Subway and Taco Bell with a BA degree (after a 4 year scholarship) because there were no advertising jobs for her major of digital communications (advertising) in her lesser city in Oregon. As in all media, they have been consolidated because these jobs can be performed cheaper elsewhere. She is now working at a credit union, earning in the low 20k range and has learned almost every job in the bank. Because jobs are so menial, boring and mundane, drinking with pals is the defacto entertainment. With any luck, she might retire with a salary in the 50k range. Tell me about domestic opportunities, Mr. Brooks. Shallow? There are none so blind as those who will not see.

  5. LosGatosCA says:

    Facts and math are like Kryptonite to Republican plausible narrative myth makers posing as . . . well, whatever you call someone writing fictional columns for a supposedly serious news source. (Also, see pieces on Newt Gingrich in same, too)

    I strenuously object to graphical presentations of the data that appear to contradict the myth being made. Remember, myths rely on feelings, not data.

    Anyway, structural unemployment, bah. American Exceptionalism!

  6. James says:

    Brooks is talking about changes over 50 years, which are structural. Konczal is talking about changes over 3 years, which are cyclical. They are both right, except Koncal implicitly claiming that no structural change over the last 3 years implies no change over 50.

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  8. yorksranter says:

    International blogging regulations require posts on David Brooks to mention the fact he just makes stuff up prominently.

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