A dearth of investment in young workers

Here is my latest New York Times column, excerpt:

For Americans aged 16 to 24 who aren’t enrolled in school, the employment picture is grim. Only 36 percent are working full time, down 10 percentage points from 2007. Longer term, the overall labor-force participation rate for that age group has dropped 20 percentage points for men and 14 points for women since 1989.

This lack of jobs will damage the long-term careers of a big chunk of the next working generation. Not working after you finish school very often means missing out on developing the skills and habits that will serve you well later on. The current employment numbers are therefore like a telescope into the future labor market: a 23-year-old who is working part time as a dog walker, yoga instructor or retail clerk may be having fun, but perhaps will receive fewer promotions as a 47-year-old.


Employers appear to be more risk-averse, more concerned about overhead costs and less willing to invest in developing young workers’ skills. And that seems true across a wide variety of sectors.

In the legal profession, for instance, there is less interest in hiring junior associates and grooming them for partner status. Colleges and universities are often more interested in hiring adjuncts than tenure-track young faculty members. And publishing houses, instead of providing a big advance upfront and investing in young authors over a series of books, now expect many writers to earn their share of a book’s revenue through royalties.

There are further relevant points in the article.  And here is an FT article about more and more young British people living at home.

Here is a compelling visual from Wonkbook:




Nothing to do with oversupply of unskilled labor.

Nope, nothing to see here.

Wouldn't it be crazy if the government did anything at all with the new FREE education possibilities?

For example, rather than screwing up luxury ed or toying with the idea of civil service slavery, what if they just created a voluntary segment of the military that guaranteed no foreign fighting?

What would they do then, domestic fighting?

From the historical perspective, having a standing army at home with nothing to do is bad idea.

It's not necessarily something I want, but the fact they are talking about mandatory civil service draft while decimating our national guard with endless foreign tours instead of such an alternative is illustrative, just as Obama given the choice between exploring FREE education rather wants a takeover of the luxury legacy university system.

'Employers appear to be more risk-averse, more concerned about overhead costs and less willing to invest in developing young workers’ skills.'

Unlike that failure of an industrial economy called Germany, where successful companies consider their success based on developing workers' skills - and not just the young. Why, there even laws governing the right of workers to demand further training. For those that read German, this is a quick overview - http://de.wikipedia.org/wiki/Bildungsurlaub#Bildungsurlaub_in_der_Bundesrepublik_Deutschland

We can't talk about that. It's verboten. You can also look at the practices in other Northern european countries.

And, did you mention that college is free in those countries? Yet, they don't have the same problem...except that now college grads from Spain are migrating, but fortunately, although they do speak English, they don't speak German well enough. For now.

Yeah. German companies are so proud of it they have to be forced to do it by law.

Sure, in an ethnically homogeneous, high trust, cohesive society like Germany it makes sense for people to train young workers. America is not like that. Germany is not going to be like that for long. What works in a village where everyone has known each other for hundreds of years, cannot work across a multiracial, multicultural continent.

You had a great social system. You f**ked it up. Your future is Lebanon.


I wonder how many politicians held jobs before the age of 24. I suspect most went from school to politics or law without ever experiencing the rough and tumble economy that most of us went through.

Did the president ever have a real job?

Unfortunately for us, he does now.

He worked "real jobs" for about 5 years between undergrad and law-school.

According to wiki, Obama worked as a director of a community organizing group that began with a staff count of one (himself?), and as a consultant to a community organizing group.

Are these real jobs? Did they give him any insight into things like productivity, wealth creation, risk, profitability and competition?

Did he come within ten miles of learning at a fundamental level how the US economy works?

"According to wiki" Obama worked doing research and writing at the Business International Corporation, and then at NYPIRG. And I would think founding a non-profit would acquaint someone rather well with basic issues of competition. The non-profit sector is not some magical realm where the problems of competition and entrepreneurship magically disappear because, what, "Chip" doesn't like their politics, therefore...?

Oh look, we agree.

Obama's work history was all politics and no profit.

And nothing had changed.

"And I would think founding a non-profit would acquaint someone rather well with basic issues of competition."

I think that's a very tenuous conclusion.

You're really stupid. Just so you know.

Dr. Cowen, please post smaller images that link to larger versions. Large ones embedded in the posts look awful unless I drastically widen my browser window:


I can confirm this.

This would seem to contradict the argument that the Great Recession is/was structural. If the collapse in employment was caused by a sudden shift or realization that some skills were not as valuable as people thought and others were more valuable, wouldn't the collapse in employment be seen more in the middle of the scale? People in their 40's and 50's would be the one's who are most heavily invested in those obsolete skills and presumably would have the most trouble leaping into something totally different and getting up to speed quickly. That's the old 'you can't teach an old dog new tricks' theory.

An alternative theory is "the old mature people can handle anything, these kids today are stupid wimps". They are the ones who can't handle dynamic change so they respond by retreating to their parents basements while mom and dad use their skills to navigate a rapidly changing labor market.

Or you can go with "Krugman is right, learn to deal with it". If lack of demand is the problem, the middle aged workers are the ones who are best to handle the 'fixed costs' of the plants and businesses. The young workers are the 'swing shifts'....add them when demand picks up, drop them when it's weak (think cashiers at Toys'R'Us versus store managers, corporate toy buyers, marketing department heads etc.).

If the first theory is true, then that lends support for the 'Krugman theory' (but the first could be wrong and Krugman still right). The second theory could be true and lend support for a structural theory (although Krugman could still be right even then...[it seems the only thing you can rely on in economics is the Krugman Conservation Conjecture....it states "Just as Einstein is never wrong about the speed of light being the fastest speed possible in the universe, no amount of evidence can ever demonstrate Krugman is wrong]... But anyway the second theory doesn't seem to fit with many real life observations. Whenever I've seen radical changes in a company, while they may keep a handful of 'old dogs', most 'old dogs' get sent out to pasture and replaced by younger, cheaper kids who will be happy to embrace the new direction.

What about an alternative theory - managers and recruiters are usually people in their 40's and 50's, not 20-30 year old. Their main interest is to keep their jobs and jobs of their buddies secure. Furthermore, they don't like competition, so they tend to keep employees who have a proven track record of not challenging their positions. Add a psychological proximity with people from the same age cohort and you have a plausible explanation.

Maros, Whether or not your argument is true--that managers in their 30s or 40s make certain decisions--it would be true in both periods, not just this period. For that argument to be an explanation, the decision rule would have to change from one period to another.

How about employees in their 40' and 50's often have firm specific knowledge that outsiders would lack. The connections, formal and informal, of people in these age groups often give them industry knowledge that new workers would lack. However once they lose that position they lack the same value to other firms.

We are in a period of structural problems. Manufacturing, financials, housing, to name a few, are seeing changes that rewrite previous employment norms.

Krugman is often wrong

A structural problem implies the 'deep institutional knowledge' of managers in their 40's and 50's is a problem, not an asset. The whole idea behind 'structural' implies something has radically changed making investment in old institutions/knowledge useless but now we are short on the knowledge that is really needed.

In other words, is you don't need new tricks, your old dog will do just fine. If you do need new tricks, old dogs will do worse than new dogs, which is not what the data above seems to indicate.

The only type of structural problem I can think of where the opposite might be the case is what I'll call the Battlestar Galactica Problem. There after the super-smart robots rebelled, it became necessary to engineer super high tech *out* of society. A more plausible real life possibility might be something like the Y2K bug where all in the sudden you disocover you need people who are familiar with an old technology and you need them very fast. Then you may discover employment growth in the 40-65 age group explodes as anyone who remembers a little bit of Cobel programming is suddenly in demand but newly minted computer science grads who were only taught the shiny new stuff are not useful to the industry.

The structural problem is that some industries retrench, restructure, which leads to layoffs. Those workers do not easily shift to new firms or new industries.

The older works hang on for a while but once laid off they have a hard time being re-employed. The skills of former employees at GM had greater value to GM then any other potential employer. Indeed the skills of those old employees were greater, to GM, then new potential entrants for a period. Radical advances don't occur that quickly at most firms, in most industries. Most change is incremental. Even from one college class to the next, one group of new hires to the next.

I will grant that even as GM was laying off workers, in many departments they were hiring new employees with hard to find skills. Just the raw numbers of layoffs swamp the few new hires.

Not to mention that firms will often subcontract or form partnerships to obtain skills they desire. If you have a hard time attracting the workers you desire, you might just contract out the job. Tech companies will sometimes just buy a company as an easier way to acquire skilled workers. But those are growing companies.

The structural problems currently are often rooted in increasing government mandates and regulations. Not only have they decreased aggregate demand, they have changed the structure of the economy.

1. "This lack of jobs will damage the long-term careers of a big chunk of the next working generation." And, that is why we must cut government employment which often provided the first job for our younger generation...as teachers, student aids, graduate students...and why our unemployment rate would be .5% lower had we not cut government employment.

2. "In the legal profession, for instance, there is less interest in hiring junior associates and grooming them for partner status." ZMP associates? Why a different rule for the elites? Is the law profession supposed to grow just because some folks decide to go to school for another three years? (Full disclosure: I've taught antitrust law, and when I did, I used some of the same graduate case study materials I used in I taught on pricing strategy because the job market made it more likely they would be doing a combination of law and business in the real world. Law is changing, and blended careers are the future.)

3. I love this one: "Colleges and universities are often more interested in hiring adjuncts than tenure-track young faculty members." Yeah, Yeah. In this blog, I hear about restrictive labor rules in Italy and France impeding competition (because you can't fire employees), while elsewhere in my column I hear a lament Colleges hiring non-tenured profs, rather than tenured profs who can't be replaced. Maybe the argument for exceptionalism is that a 70 year old faculty member is very good at recalling what he learned 50 years ago, and who needs to make room for those new Ph.Ds anyway. What do they know. (I say this knowing that one of my neighbors is a retired Dean, who couldn't fire or reduce the hours of the tenured French and Italian profs to create a Chinese language department; one of my neighbors is an 85 year old prof who goes to work every day, unless is is traveling around the world, and a neighbor down the block is 81 years old, has a bunch of Indian graduate students working for him doing his research; but, he is well connected at NIH, so he can get those grants, he tells me. Conscious though of my views on tenure after 65, he tells me that I am not like my other colleagues...I produce. That's probably true, because the University hasn't made him a generous offer to retire, like they do for the non-productives)

Government often provides the first job for young workers, employing them as student aides??

1. Feature, not bug. I'm optimistic this country will overcome this callow thinking.

Pure hypocrisy!

Tyler has told us, on more than one occasion, that future employment will depend upon being personable, like a life coach. And here he is complaining about people having multiple jobs in the service sector. As if that isn't the perfect place to get the job skills for the future he envisions.

I would have more respect for his opinion if he didn't contradict himself from post to post. He needs to be more like Krugman, and spread that out over several years.

They are not getting skills that the marketplace values. While soft skills are often necessary they are not sufficient.

“College doesn’t always prepare students very well for the work force.”

Also, water tends to be wet. And cities in high latitudes often get cold in the winter.

Lets hope for more immigration. That will help.

Looks like for the 60+ range the big increase in the employment to population ratio is in women, but you would expect that because in previous years women of their cohort were fewer in the population.

Also, I am wondering about whether the trend for the 60-64 year old class will continue if they have the opportunity to purchase low costs health insurance. Many are tied to their employers...or work...because of the need to maintain health insurance. For example, the lowest cost exchange plan I am aware of...in Minnesota per national news...is $245 a month for a 60 year old non-smoker. That's a great deal. I predict there will be early retirement for those who would otherwise have to pay $12-15k for a family of two for a similar plan.

In fact, when all the exchange data comes later next month, I would be interested in a table on plan costs across the nation. Here's why: if employers, and employees, are mandated to carry health insurance, employers may gravitate to states with lower insurance costs, even though they have to pay higher salaries. Even if a state has a low minimum wage, this can easily be offset by higher health insurance costs. So, will you see employers moving to low cost insurance states because their net labor costs are lower when you factor in healthcare costs? Will states compete to lower healthcare costs by better managing care?

Remember the base when talking about percentages. 5% of 40-50 yr olds leaving employment is a much bigger deal than a 15% increase in women over 70 being employed.

Totally agree. But, if you also don't recognize that there were fewer women in the workforce 40 years ago you wouldn't recognize why an increase in women over 60 increasing at a different rate than in previous years.

And you being a libertarian need to explain why are there so few jobs created when we have record corporate profits, record low effective corporate and record low effective marginal income tax rates, record low minimum wage, lots of new free trade agreements, record low union membership, the smallest post recession government spending increases AND for the first time record CUTS in the number of public workers nationally after a recession. Why? Professor why?

He doesn't, libertarians aren't running the ship, but it's easy. The Fed. The busted Federal and State balance sheets prior to recession. And the Federal intervention into the housing market. Those are just a few of the undeniables. Then you have the regime uncertainty. You also have the foreign competition.

What you are probably talking about is speculation that the Keynesianism that has been proposed might work if it could ever actually be tried to your unattainable preference.

Not to mention half of your assertions are misleading or completely incorrect.

For example, see the below chart of minimum wage and unemployment.

First, the minimum wage is about average and within $2 of the highest ever in inflation-adjusted terms (that's including the weird and short-lived spike in Johnson's term). Note how increases in minimum wage results in an increase in unemployment. About the only defense of economically significant increases in minimum wage I can think of is that the people receiving them are economically insignificant to economic growth.

What is your model for the minimum wage? That it's free? That would be a weird thing.

So, Andrew, instead of referring to a right wing blog, perhaps you want to refer to this paper:

"This paper examines the impact of minimum wages on unemployment duration. We utilize the Displaced Worker Survey to estimate the effects of minimum wages on unemployment duration, while controlling for individual characteristics and state effects that may be correlated with the value of the minimum wage. The empirical results suggest that minimum wages have differential impacts on unemployment duration for unemployment insurance recipients and non-recipients, but there are no overall increases in unemployment duration associated with higher minimum wages. In fact, higher minimum wages are associated with shorter unemployment durations for insurance recipients; for non-recipients, there is less evidence of a statistically significant relationship. These results are robust to changes in specification and different measures designed to capture the binding nature of a state minimum wage."

..."While it may seem illogical for changes in the minimum wage to have a larger effect on UI recipients than non-recipients, this is not the case. As shown by Card and Krueger (1995) and DiNardo, Fortin, and Lemieux (1996), increases in the minimum wage reduce variability in earnings because the lowest paid workers benefit from increased compensation while those in the upper-tail of the income distribution are not significantly affected. If employers are required to pay higher wages to low-skill workers, they may perform the necessary screening to acquire the most skillful unemployed workers. Despite having similar education levels, our descriptive measures for tenure and previous job earnings suggest that productivity is not fully captured by educational characteristics. Compared to non-recipients, UI recipients had longer tenure and higher earnings in their previous jobs. If employers are more diligent with their screening and hiring practices after the minimum wage increases, these characteristics provide support for our finding that higher minimum wages reduce the length of unemployment spells for UI recipients.
Another possible explanation of these results is that minimum wages simultaneously affect labor force participation decisions. In particular, if workers discover that higher minimum wages reduce employment prospects, they may react by reducing or eliminating their participation in the labor force. Consequently, by focusing our attention on full-time labor force participants, the minimum wage effects may be biased. The multinomial logit results, however, contest this idea. These imply that labor market participation decisions, in general, are not affected by minimum wages."

Here is the paper: http://www.irle.berkeley.edu/events/spring07/pedace/pedace.pdf

And how is that supposed to be at all relevant?

Cliff, Guess you didn't read Andrew's comment or the text summary. Hint: look for the words "minimum wage" and "unemployment" and read slowly. If you need further help, I will summarize it in small words for you.

Or, if you like, let me underscore the findings: "there are no overall increases in unemployment duration associated with higher minimum wages. In fact, higher minimum wages are associated with shorter unemployment durations...." and the references to Card and Krueger research in the second paragraph which summarize findings on minimum wages and employment.

Now read Andrews comment: "increases in minimum wage results in an increase in unemployment."


You'll never understand this point but I was not referring to a right wing blog.

I refer to a graph of DATA and the easily observed parts of that data to dispute the assertion by the commenter that somehow Tyler Cowen owes him an explanation for why Obama has fucked our economy.

As in, I'm not referring to any interpretations as you are. Make up your own mind, if you can.

Billl, what I do is search "minimum wage and unemployment" and just take the first couple links or image links.

So, for you to claim I'm focusing on right-wing blogs and then you offer a left wing paper is a clown move, bro'.

Micro is not relevant to the macro question the original commenter is referring to. It is also where people like Card and Krueger can make the most of their questionable methods as I've pointed out previously.

We also know that "unemployment duration" is not the same thing as unemployment and further has nothing to do with the macro issue.

for other better views on minimum wage

Every paper not finding evidence of mass layoffs with marginal increases in the minimum wage starts with "standard economic theory states that demand drops with prices...but here is our idiosyncratic niche study." To say that a libertarian needs to explain themselves for the recently jacked up economy and a supposedly historically low minimum wage (it's not) is or should be an obviously bizarre position.

Yes, the ballyhooed libertarian paradise is upon us. We are all living in Galt's gulch now. All you have to do is make up a bunch of lies and leave out a bunch of inconvenient truths for it to look that way.

Libertarians have to explain why they didn't show up to the bargaining table to get a better healthcare takeover in the depth of a depression.

Perhaps because they only make up maybe some 2% of the population and overwhelmingly tend to be happy with Republican policies?

You should mention the issue of "wait" unemployment. Many young people, with student loans and college degrees, seem to be waiting for a big opportunity. One that fits their education. Or all the workers waiting to get a government job, often in the minority community.

Many of these former students would have been better off without college - if they had learned a marketable skill. Or had developed a passion for creating opportunities for themselves.

Of course government helps them build student debt, makes it harder to create businesses, encourages government dependence, punishes potential job creators, demonizes profits, protects poor school systems, wants to increase regulations and the size of government- and then wonders what is going wrong.

[citation needed]

The golden age of when people invested in others futures was the guild structure in the Middle Ages, and that was all about anti-competition. Vestiges of this structure remain in the medical profession of course, where long on the job training is required, but I don't think this is true of most jobs. In fact I would say than most jobs the specifics can be picked upon a few weeks. This is going to be increasingly true as computers get smarter, sort of like how pictures on cash registers removes the need for literacy. This trend started even earlier with the genius of Henry Ford's production line removing the need to be a skilled worker to build a car. Overall this is a good trend as it lowers the costs of basic goods and services.

Another point, Tyler seems very keen for what might be called career corporatism, where careers are all about incremental gains over years, and small differences in starting are amplified in a zero sum way. Who would want a world like that? Anyway only a very small minority had that kind of an experience in the past, most people just had factory or office jobs that didn't go anywhere. This is just false nostalgia.

'In fact I would say than most jobs the specifics can be picked upon a few weeks.'

German Mittelstand manufacturers would undoubtedly like to thank you for contributing to their success by holding such beliefs.

A pretty large fraction of the jobs that exist in our economy don't require more than a few weeks training to become productive. Ideally, after that point further on-the-job training should allow motivated employees to continue bettering themselves and their worth to their employer. But that doesn't seem to happening as much as it needs to.

It'd be interesting to see what portion of each age/gender group have criminal records.

I'm more concerned about this concept of "after you finish school". I mean, it doesn't seem to be tied to any marketable skills or otherwise a clear point where it makes sense to enter the labor force. It sounds more like serving a prison term. More accurately, I suppose, it's a reflection of our aimless mindless 'education = human capital = good' middle class culture. I mean, it would be nice if after 12+ years of taxpayer funded education there was a point where we could say "OK, Junior, you're ready to start your career now!" But instead it seems more like the scene from Shawshank Redemption where they release the prisoner back into the "real world" and he's been cooped up for so long he doesn't know what to do with himself, except the prison won't let him back in.

I think each parent should give their kids at least $2 million to start their own business.

I think the problem today is that parents aren't willing to give their kids money to start their own business instead of giving them that money to blow on education.

Chipolte started with about $80,000

I suspect this is all part of the great transition of US wages towards international norms. Like many such transitions, many are "grandfathered" in at the old wages, but new entrants to the market aren't ready to accept ~$10K as a norm (and employers aren't yet willing to offer it).

As well, US society itself must transition to provide the infrastructure where it's possible to survive on such wages (more rooming houses, dormitories, cheap food, etc.).

With luck, 100 years from know, we'll look back on people growing up in this era with the same horror that we have reading about conditions at the beginning of the industrial revolution, knowing their hellish conditions were a precondition for truly global prosperity.

Agreed, but I don't think it will take 100 years. As globalization, the Internet, better software, automation and robotics continue to decrease the demand for labor and the malemployment rate and income inequality continue to rise I think it will take 5 to 10 years for some significant structural changes and 15 to 20 years for massive changes ala national basic income, planned communities in rural areas, etc. Unless populations start declining faster than technology kills labor (e.g. Some kind of pandemic). We simply don't need more than 50 percent of our population to work - and when you look at all the churn and snake oil in the economy (financial services) the true necessary employment rate is probably closer to 30 percent. Most of todays jobs are BS or easily eliminated via technology and outsourcing.

I have been fascinated by this topic for a while. If I understood the point of the post, this is proof that companies are no longer willing to invest in training these young people in careers where they have openings within certain skill sets. We have seen in other posts that there is a distinct mismatch in skills from high school graduates as well as college graduates to those required for open and available jobs. This has been the focus of the structural issues people like to discuss so frequently.

I believe, between the two, the narrative has been youth making incorrect decisions in which skills to invest and cultivate that have been out of step with the labor market requirements. I.E. too many Business majors and not enough STEM students or too many English majors and not enough Auto Mechanics (although this is clearly debatable).

The post makes it abundantly clear that companies with open positions now are not willing to invest in retraining these skill mismatches. When you are able to see record stock prices and record profits, why take on the additional risk associated with this amount of investment? It is a totally rational management reaction. However, this is creating a major long-term issue for the young as they have demonstrated a distinct lack of choosing the correct skills investment and companies are currently not willing to fill the gap with their own money through training.

The open question not asked in the discussion is how to get potential employees to match those skill sets? We often hear that we need to extend our Visa programs to do such a thing. America is not producing enough of XXX employees, therefore we need Visas to fill out output gap. This gives employers a cheap and immediate way to do solve the problem rather than retraining the US workforce and working to adjust our education pipeline which would clearly be more expensive (both through direct investment and indirect taxation). But is that really the end of the story, who will bare the long-term cost of correcting the structural issues?

The question that extends out of that is what is best for long-term US growth compared to companies stock price/balance sheets. One is a national interest, the other is an increasingly global corporate interests. What policies would change if you were trying to benefit one interest v. the other (national vs. corporate)? The relative lack of reinvestment in US labor force training seems short sighted and not in the US long term interest, but probably great for leveling the global economies as other countries step up where we are failing. Companies will obviously always go for the cheapest option.

"However, this is creating a major long-term issue for the young as they have demonstrated a distinct lack of choosing the correct skills investment and companies are currently not willing to fill the gap with their own money through training."

Well, if the young have done as advised by the so-called intellectuals and followed their passion, then an employer has to be concerned that if they retrain this person in some useful skill, the employee will be unhappy with their job, eventually, and certainly not be passionate about it. The student should show at least some "passion" for the work by their own investment in learning.

That would be lovely in theory if it didn't cost an ever increasing amount to do so, and as the post explains, the employee currently has no job to generate income.

Which is why publicly supported education should be limited to fields that will be of foreseeable economic return to the student. Then, the student can pursue their passion or education for the sake of education on their own dime. The dimes they earn due to the useful training and education that was subsidized.

Also, by concentrating early education on economically useful education, the student will then be of greater potential use to an employer who will be less adverse to making the investment required to bring them up to speed in the employers operations.

There seems to be a lot of advocation for employers not only supporting education through tax dollars but then spending more money to train graduates even though the graduate made no effort to learn anything useful to the employer's operations while in school.

What I think is really interesting about this post, and the comments, is how the graph doesn't match the discussion.

Notice the following: the discussion has been about education not leading to jobs. Yet, the graph doesn't show anything about education and unemployment.

In fact, the posts and the comments took the leap that decreases in labor force participation in the group of 18-22 years old signalled a failure to attain jobs.

But, if more 18-22 year olds are in college, they are not in the workforce, and those that are not in college or community college, are seeking jobs.

Yet the discussion has been about COLLEGE degreed workers....yet there is No Data, none, on labor force participation rates by college graduates.


Yet we drive on vapors.


If you are young and not in school there are few opportunities for you. Employer based training in the trades, manufacturing, etc don't seem to exist. If you do not go to school and receive training you are in trouble. Why don't employers want to hire these people?

And the full article by Prof Cowen does discuss the struggles of college students. The graph was part of the story not the whole story. i.e young people not in school are suffering greatly, young college graduates also struggle - not as much but clearly some.

DanC, The chart is "employment to population ratio"--the ratio is employment to the population in that category. If more persons are in school, how does the "employment to population" ratio change? Wanna guess? It decreases. (By the way, it is a percent change of the ratio; it is not the ratio).

Second, what has been the change in an employers willingness to train a 19 year old from 2007 to 2013? Show me where the data shows that. At best it shows that 19 year olds (not in school) are marginal workers...but where is the story about the training? A more telling story would be that high school graduates (and even more likely, those who failed to graduate from high school) have fewer job opportunities. But, that is not what is shown: the graph doesn't account for students in school (the are in the denominator).

I think a more telling story would be that non-high school graduates have a tough time finding a job.

But, that would dictate a different policy response. And, not one that says employers are unwilling to train 19 year olds.

Why I ever respond to you is a wonder.

Bill sees the great unwashed masses who should just be written off. They are really the scum of society. Only saved by wasteful government spending.

Historically the trades have training program. Factories trained workers. Hell McDonalds offers some training to workers. The building trades and manufacturing have been hurt badly since 2007. This "recovery" has been extremely weak and slow. The long term impact on those people who did not get a first step on the employment ladder is negative - for them and society. Society has always had some who weren't great at school. But somehow society was able to absorb them into productive jobs.

Normally wages adjust to hire workers. Increasingly wages are less flexible as the marginal gains from work vs welfare shrink. Government mandates and regulations push employment costs up.

Hell corporations have training programs for newly minted MBA's from top schools. Law firms require new hires to work their way up as they demonstrate the ability to gain clients - through growing expertise or rain making skills.

But training doesn't happen in the Bill world. Lord almighty what a waste

DanC, I think otherwise. Your comments always deserve a response.

1. Ascribing to someone a wish that the unwashed masses be written off is just a personal attack and untrue, and is not an argument.

2. Historically trades have training program comment doesn't show evidence that this stopped between 2007 to 2013. McDonalds always trains workers, and Target always trains sales clerks, and restaurants always train waiters. Building and manufacting have been hurt, but that is a drop in aggregate demand--meaning lower hires, and hiring those unemployed with training over those without....but, guess what, the solution would have been to stimulate aggregate demand...its not like manufacturers and builders forgot how to train...its just that they don't need to with the surplus of labor.

3. Comment that wages adjust differently in this recession over others is unsupported.

4. Comment that training doesn't happen in the "Bill" world is also unsupported, and just another emotionally charged comment designed to stop rational thinking.

Maybe there's more risk for businesses to be averse to.

Or, that there is less business and there is insufficient aggregate demand. .

Oops, wasn't supposed to say that here.


People generally have internalized a "you're lucky to even have a job" mentality. Businesses don't want to invest in their employees because they view their employees more negatively than in previous times (among other reasons). Employees do not demand better treatment because they are "lucky" to even have employment at all. Those who start with no investment from previous eras receive very little total and hence are not doing well in the labor market at all.

I doubt most realize that America had not been a land of the "lucky to even have a job" until rather recently.

Looking at the graph: nobody else feels like talking about the extreme male-female imbalance in job growth? Given this information, what kinds of jobs are we to infer are being created that segregate so strongly? I'm a recent college graduate and I could tell you what kinds of part-time work is occupying my peers...it is not encouraging...

What imbalance? The male-female bars look almost the same except when you get to the 65+ sector where you see a huge increase in older female employment. But remember the base when working with percentages!

A 20% increase in 70 yr old's working is from a very small base and doesn't offset, say, 5% of 40-50 yr olds who become unemployed. Why so many more older women are now working is an interesting question (health might be a factor, my impression is that male health falls off quickly in old age relative to many women, and esp. when it comes to many jobs that require physical activity. A more healthy older population may mean more older women take a administrative assistant job but few old men return to construction or mechanical jobs they did in their youth...)....but I don't think it has a major macro effect.

As far as the non-college young workers, what we are seeing is the logical outcome of actions taken 30 years ago. There was a time when a student could gain some useful tool-using skills in high school. Plus, all the peripheral training associated with such tech classes. But, some genius came along and got rid of vo-tech in high school or shipped it off to the vocational center making 14 yr olds choose between a job in the trades or college-prep. In addition, kids used to learn a lot of tool-using skills from helping around the house. That is not as common anymore since the "college-educated" parents can't do such things or choose to hire it done anyway. So, now we don't have the vo-tech training in high school even for those who'd like to have it. It's college all the way or live beneath the highway.

Also, in the late 1970s into the 1980s, there was a glut of tech trained workers on the market as factories closed. So all these early Baby Boomers were a boon to employers needing employees with trade skills even as the traditional training employers went under or overseas. So it the trades weren't a good career choice for late Boomers and early Gen X as the market was glutted. So the loss of vo-tech wasn't apparent. Now, the glut of skilled workers is aging out and employers are hunting. What the surviving employers don't have are the programs to train, nor the margins to pay for it.

So here we are with employers who need employees with at least some level of trade skill, but, a schooling system that not only did away with such training but spent more than 30 years denigrating such learning as "for dummies". The latter is ironic as a skilled tradesman uses more of his math, including Algebra, than your average college grad. Sure, many can't explain the concepts or theory but when they get their fractions, trig, etc., wrong, their mistake lies on the scrap heap for everyone to see not tucked away, unread, in some library stack.


Could this be that employers discount the future more after bad times. Training young new workers if turnover is low will have payouts in the future if they still work there from the increased productivity in the future. Training someone who retires in 10 years may bring more now but less in the periods when those workers retire.Treating workers worse also would lead to higher turnover but this hurts the current executives less with a higher discount rate.

It's interesting to note that the graph turns positive at precisely the age that Medicare kicks in, relieving employers of the need to supply health insurance-- suggesting that A true universal healthcare system not tied directly to employment would be a boon to employment at all age groups.

Exactly. The USA had to abandon chattel slavery before its industrialization and urbanization really took off -- such a society couldn't have been created when half the country was built on a base of slave plantations. Today the USA as a whole is facing a similar social lag due to its lack of universal healthcare. There will have to be a political push for universal healthcare if it is to have any kind of successful post-great stagnation transition.

But isn't there a similar trend in the UK?

It is a trend Universal Healthland (aka, Europe) as well! There has to be a different causation.

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