In its most recent post Melinda Pitts of the Atlanta Fed examines some of the various theories on why the recovery in employment has been so weak during the recovery. The first is an examination of the relation between the unemployment rate and the labor force participation rate. I honestly don’t think that a coherent discussion of that can take place without considering the effects of two-income households and reduced mobility due to, for various reasons, being stuck with a home that the owners are unable to sell or unwilling to sell at the price they would receive.
The second explanation, that
the ongoing decline in the demand for less educated men in manufacturing has generated a negative trend in labor market outcomes for these workers for three decades. This trend continued unabated during the years after the 2001 recession but was masked by the housing boom, which lifted employment for less-skilled workers for another five years. This observation is relevant for how one interprets the time series changes in labor market outcomes. If we view the housing boom as an aberration that is unlikely to resume, it is inappropriate to compare current labor market outcomes with those just preceding the onset of the Great Recession.
fits neatly with my last post. My only cavil would be that I strongly suspect that demand for “higher-skilled” workers is itself an artifact. Note that the demand for new law school graduates has crashed since the financial crisis. Without the extraordinary level of government spending on healthcare and education I really wonder how strong that demand would be.
The third considers the barbellization of the U. S. job market—more jobs at the ends of the income distribution than in the middle. In my view that’s a consequence of policy and the folks at the high income end of the barbell will fight like hell to keep it that way.
Another idea is an interesting attempt at quantifying and measuring uncertainty as a factor in the lack of growth in employment.
The final idea is a discussion of the role of tax and regulatory disincentives on employment growth.
Food for thought.