The Great Reset, labor market edition

by on August 12, 2013 at 10:02 am in Current Affairs, Data Source, Economics | Permalink

The lowest-wage sectors have consistently produced 40 percent to 50 percent of the job gains in recent recoveries.

Here is more, and there are further pictures here.

Millian August 12, 2013 at 10:14 am

Tyler, in your view, is the most important long-run, US economic story of the 21st century so far growing inequality, the Internet, the financial crisis, or something else (perhaps trade, though that seems more 1990s)?

Mark Thorson August 12, 2013 at 1:00 pm

That will be revealed when it is dubbed The Great Inequality, The Great Internet, The Great Financial Crisis, or The Great Something Else. It is The Great Tyler Cowen Franchise.

kebko August 12, 2013 at 10:31 am

The causality goes both ways. Sometimes you get low wage jobs because you have low wage workers. As with many things right now, this might be demographics. The article is just showing what a recovery looks like when you are replacing a bunch of retiring 60 year olds at the end of their careers with a bunch of 20 somethings just starting out.

kebko August 12, 2013 at 10:51 am

The soberlook article also is basically showing demographics and the business cycle. Part time work is less susceptible to labor market and business cycle changes, so it is just going to be an inverted graph of the employment level. Here is a fred graph that compares the Employment-Population Ratio since 1983 to the inverse of part time employees / total civilian employment.

http://research.stlouisfed.org/fred2/graph/?g=loz

Z August 12, 2013 at 10:54 am

Given that almost all of the job growth in this “recovery” has been amongst the over 54 cohort, your theory seems unlikely. The more likely explanation is that wages in rich countries are heading toward the global mean. Add to that the flood of immigrant labor over the last 25 years causing the bottom to fall out of low skill labor.

Mark August 12, 2013 at 11:12 am

Where did the biggest recessionary declines take place?

Boonton August 12, 2013 at 2:08 pm

Errr, isn’t it the case that low wage and part-time jobs are by definition the least costly? Wouldn’t one expect to see them beat higher wage and full time jobs in terms of total numbers? Esp. at the beginning of a recovery?

joan August 12, 2013 at 5:38 pm

The same shift to low wage industries has been happening since 2000 and probably before.
http://pinterest.com/pin/87890630200328107/

foo August 12, 2013 at 10:48 pm

Z seems to be on the right track. At the risk of oversimplification, the Iron Law of Wages on a global scale, comes to mind. Domestically, we are just recognizing a new definition/level of acceptible subsistence.

For me, the puzzle is where and when we will land on our feet and the rate of change.

The Anti-Gnostic August 13, 2013 at 10:20 am

Huge, violent underclass kept at bay with bread and circuses, stagnant middle class mostly employed by government, and callous, isolated, dynastic elite solemnly advised by academic economists. But you’ll be able to buy grilled kebabs on the sidewalk.

In summary, regression to the global norm.

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