The U. S. Employment Model

At Forbes Steven Denning has an article on a subject I addressed a week or so ago—that so many of the jobs being produced today are bad:

When U.S. unemployment is at a 50-year low, why do so many people have trouble finding work with decent pay and adequate predictable hours? A new economic indicator—the US Private Sector Job Quality Index (JQI)—gives the answer: we have lots of jobs, but they are increasingly low-quality jobs.

“The problem is that the quality of the stock of jobs on offer has been deteriorating for the last 30 years,” says Dan Alpert, an investment banker and Cornell Law School professor. The JQI is built and maintained by Alpert and his fellow researchers at Cornell University Law School, the Coalition for a Prosperous America, the University of Missouri-Kansas City, and the Global Institute for Sustainable Prosperity. (As to how the JQI is constructed, see the technical note below.)

He asks five questions:

  1. If Unemployment Is So Low, Why Don’t Wages Go Up?
  2. Why Is Participation In The Workforce So Low?
  3. Weren’t Manufacturing Jobs Replaced By Other Jobs?
  4. Why Didn’t High Tech Save the U.S. Economy?
  5. Why Has U.S. Productivity Stalled?
  6. What Do The New Jobs Actually Look Like?

It’s an interesting article and I encourage you to read it.

The one point I would add is that what has happened has not been accidental but the consequence of policy. We have been maximizing the number of minimum wage jobs. The Germans call this “the American employment model”. Its success, such as it is, depends on a continuous flow of unskilled or semi-skilled workers.

4 comments… add one
  • Grey Shambler Link

    Technology has actually lowered the skill level needed for jobs that use the new information processing tech. Raising that for those who design it. Turnover has now become a net positive for companies, as long as they can still get entry level workers for low pay.

  • TMLutas Link

    If you want a better quality job, take the least objectionable job you can right now and add a side gig. Then scale that side gig up to an income stream that can replace your current “main” job. Lather, rinse, and repeat until you have enough put aside to retire or work longer than that because you’d do the task for free it’s so fulfilling.

  • Grey Shambler Link

    Positive. Very cool.

  • Grey Shambler Link

    Stalled?
    Like a lot of people, I don’t think it stalled at all. In fact I think this is the great challenge of our age. How do we distribute this newfound productivity without diminishing innovation? Or shall we use the new technology to crush dissent from those left out? This is free enterprise, if it is determined crushing dissent is a profitable business model it will flourish. My money (hah!) is on the soft crush of advertising propaganda.

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