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Home Publications Blogs Beat the Press Loss of Good Paying Jobs Could Just Be Due to High Unemployment Policy

Loss of Good Paying Jobs Could Just Be Due to High Unemployment Policy

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Wednesday, 11 June 2014 04:08

Thomas Edsall had a piece noting the deterioration of job quality since 2000 that many of us have been writing about in recent years. He discusses various possibilities going forward, but ignores an obvious one.

For most of the period since the 2001 recession the economy has been below full employment by almost anyone's definition. In such situations, it should not be surprising that there would be a deterioration in job quality as workers have to slide down the skills ladder in order to find employment. This is the sort of story that Jared Bernstein and I highlight in our book, Getting Back to Full Employment (free download available).

If Jared and I are correct then the problem is simply the government's high unemployment policy. This could be reversed by either larger government deficits (i.e. increased spending and/or tax cuts to people who will spend them), a lower trade deficit from a lower valued dollar, or a reduction in the length of the average work year through policies like work sharing. This would suggest that the deterioration of job quality is a problem that we know how to solve, even if there may not be the political will to do it.

Comments (3)Add Comment
Very Serious Americans Know Who is Taking Their Jobs
written by Last Mover, June 11, 2014 6:42

As the employed drop a notch or two down the skills ladder to positions of chronic underemployment, Americans never hear from sock puppets that it's [ u]unnecessary lack of demand that's taking many of their jobs.

It's always something else. Big government, taxes, regulation, immigration, structural unemployment, robots, China ... anything but lack of demand like the Keynesian commies say it is.

After the infrastructure crumbles to the ground from climate change, the sock puppets will say it's too late to fix it except for privatized solutions that cost ten times as much with half the benefits available to ten percent of the population.
More completely agency free trends, about which we're told nothing can be done.
written by jaaaaayceeeee, June 11, 2014 7:18
High unemployment policy works well, for a few, for a while.

Ignoring it, like pretending we reformed the financial sector, makes for some strange claims. "These trends are certain to reverberate into the political system," writes Thomas Edsall.

Then he concludes nothing can be done, that nothing will reverberate into the political system. Except maybe infrastructure investment will mitigate the job and wage erosion affecting our most educated workers. Tortured nonsense of studied blindness.
...
written by jonny bakho, June 12, 2014 6:10
Bush did not address the 2001 recession by direct job creation- funding additional infrastructure projects, extending computer technology to all K12 schools, etc. when we had the excess skilled labor to tackle these issues. Instead, he gave trickle down tax cuts to the wealthy and Greenspan blew up the housing bubble to create jobs.

The fiscal policy response and labor policy response to the great recession were too weak.
We have abandoned interventionist fiscal policy when it is needed most.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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