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Seriously, #5? Tyler, why would you link to nonsense like that?

There’s another, subtler point. Two $20,000 jobs are better than one $40,000 job – sure one shows up better on the output/hr productivity statistics: but the other employs two people.


Why do people keep asking Tyler why he links to stuff? Better question is why he doesn't link to something, but the answer is usually trivial.

I got stuck in the second paragraph. "[Single-income households] indicate that one [earner] cannot hold their job consistently, have high turnover, and are living off insurance." Lots of family are single-income and like it.

I think I agree with the conclusion that to help the poor you need low-wage jobs -- high-wage jobs don't employ the underclass -- but the post seems to take some weird ways to get there.

I don't want to defend my result as an absolute reality – it's a "silver lining" not a panacea after all. Still, even if many households are happy to be single-income, many where one of the earners will get these "bad" food-service jobs are not. That is because one minimum-wage salary in absolutely no way lends itself to raising a family.

My point compliments yours. The families (not young adult couples) that are happy with one income invariably have one earner pulling at or most likely well-above the per capita income. And that's perfectly fine. Precisely the reason the level of income required to pull his or her spouse into employment is much higher than the jobs being created.

Social skill atrophy – which is key to the hysteresis and long-run unemployment problems – is probably much worse at the lower-ends without the healthy and stable background necessary to keep a job. These are the people you want to get back into employment immediately. I hope this at least partially addresses your concern.

Again, this is a silver lining more than optimism. In fact that we are having this conversation at all, as Tyler noted, is quite sad.

I would say the following. There are two possibilities regarding job creation:

(1) More higher paying jobs are created than lower paying jobs.
(2) More lower paying jobs are created than higher paying jobs.

If one is inclined to interpret news negatively, then in the first case one would say that the gain in jobs "favored" higher income earners. (In fact, outside the context of this latest jobs report, I recall several commentators in recent years asserting that the top 1% has disproportionately gained from the recovery, etc.) In case (2), as we have seen, one would say that the jobs being created are not very good ones. Conversely, one can interpret the same set of facts with a positive, or at least non-negative, spin, Ashok's post being one example. So, there doesn't seem to be an "ideal" income distribution for jobs creation, just one that confirms one's previous views on the state of the economy.

However, I will object to this comment: "Social skill atrophy – which is key to the hysteresis and long-run unemployment problems – is probably much worse at the lower-ends..."

It seems to me that it is much easier for a former fast food worker to regain employment as a fast food worker after several years of non-employment than, say, for a highly compensated executive to regain employment as a highly compensated executive after having not been employed for a long time. The fast food worker has not lost that much skill, and will not necessarily compare unfavorably to his/her peers, as a result of his/her non-employment. The executive, however, may have lost considerable value as a result of prolonged non-employment in terms of network of contacts, industry knowledge, etc. So, while unemployment may cause more financial strain among low-wage workers than high-wage workers, atrophy in marketable skills is probably higher among high-wage workers. One can't lose skills that one never had to begin with.

#1. Neanderthals were pretty smart. I recall a debate recently about the ethics of cloning neanderthals and attempting to raise a neanderthal child in modern human society. Everyone seemed to think that a neanderthal baby would be mentally retarded or otherwise disabled. But the archeological evidence doesn't really support the theory that they were less intelligent than modern humans. We don't know exactly why they died out, but it doesn't seem to be due to stupidity.

Don't believe they were capable of complex speech.

Neanderthals didn't have dogs. Humans have dogs. Arf.

It's looking more and more like Sapiens got our dogs from Neanderthals.

That is the lowest of low, to steal a man's dog.

There's archeological evidence that perhaps neanderthals while having a large brain might not have been as well able to process symbolically - maybe wired differently. Apparently once neanderthals came into contact with homo-sapiens however, the incidence of cave paintings and body adornments begins showing up in the geological record. Like Alexei mentions, I wonder how vocalization limitations may have contributed to this - and whether homo-sapiens advantage might have been better ability to transmit culture, but not raw brainpower?

There's also evidence, although I don't know how well accepted, that neanderthals actually survived, but in a form that blended into homo-sapien communities - with neanderthal DNA becoming part of the current human genome.

Neanderthals required a lot more calories than us to survive, up to 3500 calories a day. I think this is a big part of the answer, they weren't able to cope with periods of famine as well as homo sapiens did.

5: I think this kind of gets at a problem with a lot of public discussion about labor markets. Moral public postures lead to a consensus that treats employment as some sort of imposition, set down on workers by employers. But, clearly, labor markets will reflect the intersection of the demands of both labor and capital.

We currently have an unusually large number of 50-somethings who are slowly leaving the labor force and 20-somethings who are entering it. Why should we be surprised that there are fewer jobs that someone with 30 years of work experience might qualify for and more jobs that a rookie would qualify for?

There is no reason for teeth gnashing here. What could we possibly expect to happen? How could the economy be responding in any more appropriate way? In free economies, jobs are created to match the profile of the labor pool.

So much of the current discourse on the economy should start with two caveats: (1) demographics probably explains it and (2) aggregation buries the truth.

#3 "Around $5 trillion is traded on the foreign-exchange markets every single day, ... That compares with global trade in goods and services of ... about $50 billion a day."

That the foreign exchange market is 100 times the size of the underlying trade in goods and services should be enough to convince every regulator in the world that there is something seriously amiss in international finance.

What multiple would you prefer?

#3 - the reason the carry trade is not working as predicted by free market economics could be not because of excessive volume from lack of regulation, rather, some other mechanism like money illusion, as hinted in the article. I thought this was a very interesting article.

What about profits from arbitraging inefficiencies caused by...who knows what?

Let's say there is a penny of inefficiency but you can only get a hundredth of a penny of it back per transaction, so you make 100 transactions. This would imply that the volume is irrelevant, especially if transaction costs are decreasing.

Just because a market is not efficient doesn't mean that a market that is regulated by government is more efficient.

That said, I don't understand why you think that high volume means that something is amiss. I personally think that all else being equal, that high liquidity is a good thing, and definitely not something to be regulated away.

"why you think that high volume means that something is amiss"

The disproportion between the trade in currency and the underlying economic activity (one hundred to one) is so great that the same people must be effectively trading the same instruments back and forth. Once as a lawyer I had a case where there was a disproportion (five to one) between the banking activity and the underlying economic activity - it turned out to be a fraud. I believe that the disproportion in the foreign currency markets is so great that it cannot have a sound economic foundation and a lot of the volume in that market is the result of frauds or gaming the laws of various countries.

Joe Smith -- Amen.

Moreover, people are paid very, very, very large sums to trade currencies and every major money center banks thinks their currency trading desk is a major source of profits.

If the currency markets were efficient neither of these two things would be true.

5: English is not my native language. Why is the "rather" put in italics? What nuanced meaning am I not getting here?

I can't speak for Tyler, but I suspect he's saying we would not rather the economy created only low wage jobs. (He's very subtly making fun of the other analysis).

I think the italics is just for emphasis, as in it's not just an either or, but that our economy is currently creating fewer low-wage relative to the past. As in, not just which way would you prefer it, but would you RATHER have it different than it currently is?

And I doubt he's making fun, because if you are the low-wager who can't get a job because of the robots, you would definitely rather have the low-wage scenario

Huh. Thanks, that helped. Both of you.

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