The US Job Market: Too Much Technology or Not Enough?
Depending upon your political views, there are two prevailing economic theories on the existing US job market. From a Trumpian standpoint, technology is the bane of the existence of the American manufacturing sector whereas, from a liberal perspective, technological innovation in the US is not growing as much as it needs to sustain the US economy. Both perspectives are explored in an article by Neil Irwin in the NY TImes Sunday Business section. On one hand, many Trumpsters believe that the US economy has become too volatile and uncertain. According to Mr. Irwin:
The economy has become too volatile and uncertain. Perhaps the dissatisfaction is driven by globalization, automation and the decline of employers’ implicit promises to offer workers jobs through thick and thin. These factors have made it harder for people to get good-paying jobs and to hold onto them for decades. High levels of inequality mean many of the benefits of growth don’t accrue for people at the middle and bottom of the pay scale.
All of this has hammered people without an advanced education and left them feeling unmoored and without opportunity, even if by narrow measurements jobs are plentiful and compensation is rising…..In short, one could summarize this set of complaints as the economy’s having become too dynamic for its own good.
On the other hand, the counter argument goes like this:
A new report from the Economic Innovation Group, a research outfit funded largely by technology executives, suggests that the real problem isn’t too much dynamism but too little.
They cite federal data showing that in 1977, more than 16 percent of firms in the United States were less than a year old, a figure that had fallen to half that by 2014. New businesses have similarly done less to power new jobs than they once did, while the biggest, oldest firms account for a rising share of economic activity. Market concentration increased for two-thirds of industries between 1997 and 2012, the report found. That coincided with a steady rise in corporate profits as a share of gross domestic product, and in a decline in the share going to workers’ wages.
The job market has become less fluid. The proportion of workers who change jobs in a given year has fallen from 12 percent in 2000 to 7 percent in 2015….
Most startlingly, the creation of new companies has been concentrated in a small number of metropolitan areas: Dallas, Houston, Los Angeles, Miami and New York. From 2010 to 2014, those five regions created as many net new businesses as the rest of the country combined. If you didn’t live in them, or were unwilling to move to them, you were out of luck.
Put simply, the US economy and job market is not dynamic enough.
Irwin offers two different remedies to address either idea:
If you look at globalization as the main problem, you might see some Trumpian renegotiation of trade deals and arm-twisting to get companies to keep jobs at home as being in order. But you could also argue for a more generous social safety net and government funding for retraining.
If you believe that increased market concentration is a central problem, you might consider tougher antitrust enforcement, a favorite of liberals, but also explore conservative arguments that complex regulation creates an unfair advantage for big companies that can employ scores of lawyers.
Finally, Irwin concludes:
Of course, the too much versus too little dynamism diagnoses aren’t mutually exclusive; there are probably elements of truth in both. Maybe the economy really isn’t working for many Americans because globalization, automation and changing labor practices have thrown them to the wolves. But maybe there are also deep-seated structural shifts preventing communities and individuals from tapping the great opportunities the modern economy offers.
The point here is, that the American economy/ job market change rapidly and jobseekers must learn to quickly adapt to remain employed. Further, contrary to Trump’s simple minded rhetoric, there is no quick fix for the US job market. To that point, saving a few corporate jobs here and there and threatening companies who move manufacturing outside of the US may sound good, but in the end, it is no substitute to a coherent well-thought-out job strategy to help displaced workers get the jobs that they so desperately want and need.
Until next time…
Good Luck and Good Job Hunting!!!!!!