About those “discouraged workers”

Some people argue that the 4.7% unemployment rate is misleading.  In fact, our PEOTUS makes that argument, citing figures as high as 30% or 40%. There are tens of millions of workers who are not even trying to find work (so we are told) because they are so “discouraged” by 4.7% unemployment and the Obama record of 200,000 new jobs a month for the past 7 years.  And they lack the education to do work like computer coding. But then I read articles like this:

The development boom that’s changing downtowns across the country—and adding new units in hyper-competitive markets—has also led to an acute shortage of qualified construction workers, which is starting to weigh heavily on future projects and planning. As of April 2016, there were over 200,000 unfilled job openings in building construction, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey(JOLTS).

Wait, aren’t construction jobs supposed to be the sort of work that is appropriate for non-college educated workers?  What am I missing?  Yes, some construction jobs are highly skilled, but not all.  Heck, even I have done painting, drywall and roofing.

There simply is not much “slack” left.  Many of the long-term unemployed will never work again, even if we have a 1969 or 1999-style economic boom. 

Trump loves big projects, and wants to spend a lot on infrastructure:

“There isn’t much capacity left in the construction industry,” says Julian Anderson, President of Rider Levett Bucknall, North America, a property and construction firm. “There’s a big labor shortage, and construction unemployment is down to 4 percent. It’s so nuts in LA and San Francisco, it’s gotten to the point where it’s probably turning off development.” Anderson says that proposals to deport undocumented immigrants, who make up a sizable portion of the construction workforce in some markets, may severely exacerbate the issue.

Confused?  Join the club.

How about a career in law enforcement?

Economic and social changes have made it harder for police departments to keep their forces fully staffed, and lead to increasingly desperate recruitment.

The Los Angeles Police Department was short of nearly 100 officers as of mid-December—only 1% of its total workforce, but still enough to be felt on the ground, says Captain Alan Hamilton, who runs recruitment for the department. Philadelphia had 350 vacancies, largely due to a spate of retirements. Last spring, Dallas cancelled two academy classes for lack of applicants; its preliminary applications dropped by over 30% between 2010 and 2015. In 2012, the ratio of police officers to population hit its lowest level since 1997, according to Uniform Crime Reporting Programme data published by the FBI.

The dynamics underpinning the shortages vary by department, but there are national trends making it harder for police forces to attract applicants. The first is a strong economy. Nelson Lim, a researcher at the RAND Corporation, a think-tank, says this is nothing new. When plenty of jobs are available, people are usually less motivated to enter dangerous professions. Police forces as well as the armed forces tend to field less interest in boom times.

(The article mentions a slight uptick last year in police fatalities, but they are still down sharply from 10 years ago.)  You see similar stories in manufacturing. Yesterday I heard on CNBC that there is a severe shortage of welders in manufacturing, with 300,000 positions unfilled.  This contributes to manufacturing going to places like China.  Companies in all sorts of “working class” sectors are having trouble finding qualified employees at current wage rates.  Is the problem a tight labor market, or a lack of technical education?  I’m not sure, but I don’t see much evidence for the “robots stealing our jobs” claim.

The implications are clear, if America wants to create substantially more jobs, we don’t need monetary and fiscal stimulus—we need deregulation, supply-side tax reform, better technical education, and most importantly we need to boost the rate of immigration.

PS.  I recall that a substantial share of police officers are now college grads, so I don’t mean to suggest they are all low-skilled jobs.

PPS.  Off topic, but people wonder why I have such a low opinion of Trump on foreign policy.  Here’s his pick for Secretary of State:

At his confirmation hearing before the US Senate Foreign Relations Committee on Wednesday, Mr Tillerson said China’s construction of artificial islands in the contested sea was “akin to Russia’s taking Crimea” from Ukraine in 2014.

“We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed,” he said.

Yeah, dumping some gravel on an uninhabited reef is sort of like invading a European country of 40 million people and annexing a part of its territory.

And is Russia’s access to the Crimea also “not going to be allowed”?  These people are truly evil—their worldview boils down to “Russia good, China bad”.

I feel like I fell asleep for 20 years and woke up in a country I don’t even recognize. I gather Marco Rubio feels the same way, given his exasperated tone when questioning Tillerson.

PPPS.  My grandmother’s surname was “Van Winkle.”  Seriously.



42 Responses to “About those “discouraged workers””

  1. Gravatar of Effem Effem
    13. January 2017 at 07:29

    One piece of the puzzle is that the “good” jobs are being created where cost of living is high (cities).

  2. Gravatar of Effem Effem
    13. January 2017 at 07:30

    Should have added: cities are tend to be culturally quite unaccepting of mid-America types. Another big obstacle to moving. Try wearing cargo pants in NYC and see if you make any friends haha.

  3. Gravatar of ssumner ssumner
    13. January 2017 at 07:54

    Effem, I agree, eliminating zoning laws would also boost employment.

  4. Gravatar of B Cole B Cole
    13. January 2017 at 08:17

    Housing production still way way down from historic levels. What construction boom?

    Manufacturing has done better, but obviously not like the Far East.

    Maybe America’s ability to make and build things has become atrophied…including in our labor force.

    No matter…we can still pontificate with the best of them!

    Kicker: has there ever been a time in which employee representatives in the US said, “Oh yes, we have a plentiful supply of excellent workers at very low wages.”

  5. Gravatar of Bret Wallach Bret Wallach
    13. January 2017 at 09:27

    TheMoneyIllusion wrote: “…aren’t construction jobs supposed to be the sort of work that is appropriate from non-college educated workers? … Heck, even I have done painting, drywall and roofing.”

    Aren’t you college educated?:-)

  6. Gravatar of Jerry Brown Jerry Brown
    13. January 2017 at 09:34

    “Companies in all sorts of “working class” sectors are having trouble finding qualified employees at current wage rates.”

    This is a good “problem” to have, if it is really true. Maybe companies will find it useful to train more of their employees so they become “qualified”. Maybe companies will invest in labor saving techniques so that productivity rises. Maybe companies will just realize that current wage rates might not be enough to attract employees and offer more.

    I want to see more of this “problem” happening.

  7. Gravatar of Joe Leider Joe Leider
    13. January 2017 at 09:40

    Any relation to the Pappy Van Winkle bourbon?

  8. Gravatar of Carl Carl
    13. January 2017 at 09:41

    Agreed that China’s island building does not match Russia’s annexation of Crimea, but it’s hardly just about pouring a little gravel on some reefs.

  9. Gravatar of Benny Lava Benny Lava
    13. January 2017 at 09:50

    So because there is a shortage of construction workers in a few downtowns across America there is a labor shortage everywhere? This is worse than reasoning from a price change. It is anecdotes. LA and San Fran are two of the highest cost of living places in America. *eyeroll sigh*

  10. Gravatar of Massimo Heitor Massimo Heitor
    13. January 2017 at 10:26

    This issue was always more complex than a simple story of lack of blue collar work. There is lots of well paid blue collar work especially for young people with a good work ethic and no major personal problems.

    Take stories about lack of construction capacity with a grain of salt. First, that industry goes through big boom and bust cycles. In the bust cycles even high skilled construction workers can have a hard time finding paying jobs and that can be quite difficult. Secondly, often people exaggerate worker shortages for a variety of reasons.

    Also even the fanciest economists are often absurdly wrong on these types of issues. I’d remind you that back in ~2002, when there was a tech industry bust, computer tech jobs were scarce, and even great workers were desperate for basic stable jobs: the prevailing economist analysis around this circle was that software labor hours were so much cheaper outside of the first world countries that first world computer software jobs were completely doomed. Today, that idea is absolutely absurd, but that’s what every major economist guaranteed would happen fifteen years ago.

  11. Gravatar of acebojangles acebojangles
    13. January 2017 at 10:44

    ‘These people are truly evil—their worldview boils down to “Russia good, China bad”.’

    Another conclusion could be that their worldview is “People who can give us oil good, people who will compete with us to get oil bad.”

  12. Gravatar of Ray Lopez Ray Lopez
    13. January 2017 at 10:45

    As Carl says the South China Sea is being disputed for non-trivial grounds, namely, something the ex-Exxon chief would like: oil and gas.

    As for no good jobs, that’s true. If you want to work in unionized jobs for dumb people, like law enforcement and construction work, you can probably find some, but there’s no more really good jobs.

    Finally, if Trump is PEOTUS, then baby-faced Sumner is FOETUS: FIRST ODD ECONOMIST, THE UNITED STATES

  13. Gravatar of Steve F Steve F
    13. January 2017 at 11:14

    Before boosting immigration, we should incentivize work through reduction of the welfare state. So many able bodied people don’t work because they’re on some form of government benefit.

  14. Gravatar of ssumner ssumner
    13. January 2017 at 11:30

    Ben, Do you recall lots of articles back in 2009 of firms complaining they could not find qualified blue collar workers? Can you please send me the link? If not, why bother making that sort of post?

    Bret, Yes, and if even I can do it, then non-college educated men should be even more able to do it.

    Joe, No.

    Benny, As usual, your comment has no bearing on my post, which said:

    “As of April 2016, there were over 200,000 unfilled job openings in building construction, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey(JOLTS).”

    Try reading the post before commenting next time.

    And it’s the same in Boston, construction companies can’t find workers.

    Acebojangles, Maybe that’s it, but I also think it’s partly racism. If Xi were invading neighboring countries then Trump would be absolutely freaking out about the “yellow peril”.

    Ray, If your Filipino president doesn’t care, why should we?

    Steve, Let’s do both!

  15. Gravatar of Sean Sean
    13. January 2017 at 11:38

    Crimea and the Islands are not entirely different. Degree of scale different yes. But they are the same issues.

    Also I wouldn’t take anything someone says in front of congress to be true opinions. Yellen just tries to get thru her testimony in congress.

    I’ve become pretty bullish of Tillerson as secretary of state. Exxon is actually pretty good training ground for managing global diplomacy. I think his experience is far superior to anything Hillary Clinton had for the job.

  16. Gravatar of Cooper Cooper
    13. January 2017 at 12:05

    “At current wage rates”.

    Wages have been stagnant for the last 15 years. Inflation and NGDP growth has been muted.

    Isn’t a little wage inflation at this point a good thing?

    Wage growth now is still below its level of the mid 2000s and well below the 1990s.

  17. Gravatar of Doug M Doug M
    13. January 2017 at 12:40

    There is a breed of discouraged worker that spent many years developing a highly specialized skill set. At one time he was highly paid to employ these skills. But now those skills are in so much demand, and this person is out of a job. He is in a quandary. Is it better to wait it out to find work in the chosen specialty, or to seek employment at a lower wage outside of the specialty.

    He is capable of getting a job, but chooses to not work.

    It is possible to have a tight job market, and discouraged workers.

    It is also possible to have the opposite problem, high unemployment yet employers complain that it is impossible to find qualified workers.

    Anyway, the “discouraged worker trope” held more water with me in 2012 than it does in 2017. The economy experienced a significant shift. Many jobs were destroyed that will not be coming back. But enough time has passed, that if you lost your job in 2009, and have not developed employable job skills since then, that is your problem.

  18. Gravatar of dw dw
    13. January 2017 at 12:42

    well, hate to point out that there was this rather large down turn in construction a few years back, and those that worked in it probably moved on to some thing else? course its not like its the easiest jobs on the body, so some also may have gotten to old to do the work any more, plus there was also a lot of workers that left the country cause the jobs that attracted them were gone. is is really a good idea in some places (like major cities) to reduce regulations, where removing the wrong once can lead to 1000s of deaths? and welders are usually manufacturing and construction. and deregulating them could lead to a few more explosions in a pipeline, that leads to even more deaths.

    course it also could be the low wages. cause a lot of construction and manufacturing companies have gotten used to paying low wages, since there wasnt much demand

  19. Gravatar of XVO XVO
    13. January 2017 at 13:35


    Here’s something great Trump might do.

  20. Gravatar of E. Harding E. Harding
    13. January 2017 at 13:58

    “Yeah, dumping some gravel on an uninhabited reef is sort of like invading a European country of 40 million people and annexing a part of its territory.”

    -Actually, it’s much worse, as China was not being threatened by the US via provoking illegal revolutions in these South China Sea countries, the uninhabited reefs had no say in the matter, and the uninhabited reefs are near potentially exploitable natural resources by other countries. None of this applies to the case of Russia and Ukraine.

    “And is Russia’s access to the Crimea also “not going to be allowed”?”

    -Ask the Krimeans. They will fight to stay; believe me.

    “These people are truly evil—their worldview boils down to “Russia good, China bad”.”

    -Tillerson said he supported arming Ukraine, which is, indeed, truly evil. He may well be truly evil. Guess what? Russia really is good, and China really is bad. Are you going to call the Crimean people’s exercise of democracy evil? Tibet had no vote in joining China.

    “Maybe that’s it, but I also think it’s partly racism.”

    -Truly, Sumner, you are an intellectually worthless PC Nazi moron. A scourge be upon your house.

  21. Gravatar of dw dw
    13. January 2017 at 14:02

    another example of what happens when you reduce regulations is West Tx. in our fair state, we dont have any state wide building or zoning rules, not do we have a state fire code (in fact unless the city is bigger than 20,000 people, it cant have one). what we had a few years ago in West, was facility that stored fertilizer. now they didnt have any security. in fact locals could come by at just about any time, to pick up fertilizer. and there was no fire sprinklers. long story short, at some point there was a fire. and the first responders ( volunteer fire department and police) arrived to attempt to deal with it. it didnt go well. there was a large explosion (might recall fertilizer was the explosive in OKC a few years back). the explosion wiped out a large section of the city, including but not limited too, a retirement home, an apartment complex, a school (lucky school was in session) and several houses). now you might think the state would reconsider the rules about this. but no,m we didnt. and while cities have fire code (or can) you cant find out where another of these facilities is. the best you can do is drive around looking for one (per the governor)

  22. Gravatar of Benny Lava Benny Lava
    13. January 2017 at 14:09

    Ben, I have you covered, here is a NYT article from 2010 (close enough)

    Anyways as others pointed out a shortage of construction workers isn’t much evidence. Is the BLS number unusually high? We did come off a historic housing construction bust so many we just need more time for the labor market to snap back. Again this evidence is so much weak tea and anecdotes.

  23. Gravatar of Cooper Cooper
    13. January 2017 at 14:41


    There are many kinds of regulation. Safety regulations are only part of the picture.

    I’m far more concerned about minimum lot sizes, single use zoning laws, height restrictions, parking requirements, affordable housing set asides, urban growth boundaries, etc.

  24. Gravatar of ssumner ssumner
    13. January 2017 at 14:53

    Sean, I agree he is experienced enough, and then some. I also think we should generally confirm the choice of the president, except in very unusual circumstances. I don’t like Trump’s Russia policy, but he won the election.

    Cooper, Higher real wages are always desirable, the question is how to do it without creating unemployment. I say the best way is stable nominal wage growth, and then let real wage growth occur via lower inflation and higher productivity. Thus you might want to target nominal wage growth at 3%. The Fed can’t determine real wages in the long run, all they can do is smooth out the business cycle.

    Doug, Very good comment.

    dw, People who study OSHA find almost no impact on worker deaths, they fell at the same rate after OSHA as before.

  25. Gravatar of ssumner ssumner
    13. January 2017 at 14:58

    Benny, Fair enough, but I’m seeing many more of these today.

  26. Gravatar of dtoh dtoh
    13. January 2017 at 18:36

    Scott, you’ve got two topics going here so two comments.

    CHINA – It’s not at all racist, it’s purely practical. The Obama administration policy has been totally inept….roll over and play dead. It’s hard to believe the incompetence.

    We’ve got things we want from China…..North Korea, trade, investment, IP protection, human rights. You would have to be a complete idiot not to know that 101 of negotiating is to shake their cage over important issues like Taiwan and the South China Sea.

    As for Tillerson, it’s only the talking class (media, academia and politicians) that equate talking with accomplishing things. How daft can Rubio be to try to hamstring his own country by boxing Tillerson into corner on his policy pronouncements. The guy has the brain of a jellyfish.

  27. Gravatar of dtoh dtoh
    13. January 2017 at 18:42


    LABOR –

    Is not fungible. Although maybe slumming it by putting up dry wall convinces you that any job skill that doesn’t require a graduate degree can be acquired in an afternoon.

    There is a huge difference between short term supply and long term supply. You can’t suddenly crank up the economy after idling 12 million people over a 10 year period and then expect that there will be an instant supply of workers.

  28. Gravatar of Philo Philo
    14. January 2017 at 02:14

    If there is a “shortage” of workers in some fields, such as construction, why don’t wages rise so that the market clears? Why would wages be sticky not just downward, but also upward?

  29. Gravatar of Benjamin Cole Benjamin Cole
    14. January 2017 at 04:15

    Scott: If you are still reading, then let me re-frame my comment.

    1. There can be “job shortages,” due to the minimum wage. This is one reason the minimum wage is a bad idea in the abstract.

    2. But there is no “maximum wage.” And even if some increasingly scarce companies have union rules, there are always ways to pay people informally, such free ballgame tickets, a part-time job for the wife, offering school tuition for the kids, etc.

    3. So there is no such thing as “labor shortages.” If individual employers are having a problem filling positions, the answer is simple: Pay more. If commerce in general need more labor, then pay more (or tax working less, a really good idea).

    This also applies to people looking for work. If you cannot find a job, charge less.

    Besides all that, where are the wage surges one would expect to find with “labor shortages”?

    Wages in good-producing industries are up 3.1% YOY in December, BLS figs. After inflation, wages are up maybe 1.5% in a year.

    In last 10 years, wages of production workers are up 32.7%. to $21.80, up a little more than 2% a year.


    This also puzzles me: We have heard for a generation now we need software programmers in the Silicon Valley, and have to import them, or the industry will move to India. It is not wages, it is is supply, we are told.

    You would think trade schools would pop up to serve that market, maybe financed and certainly directed by the industry. High quality control. A very high-quality AA in software programming, and no hint of a well-rounded education. (Like one can become an air-flight controller by going to a special school, with high exit standards).

    In short, the “labor shortage” story does not hold water. There cannot be a labor shortage, only where supply and demand meet.

    Add on: If anything, due to property zoning, licensing, and the ubiquitous criminalization of push-cart vending, or truck vending, if anything the labor markets are artificially flush in the US cities.

    In a major US city, it is impossible to become a retailer, for example, the one craft many people could actually do. I see it in many countries in the world. Ordinary people run a business from a push-cart, usually offering prepared foods, but anything from smartphone repair to clothing to jewelry to hand tools, make-up etc.

    And in defense of my original comment, I am serious:

    Perhaps the US has atrophied in its capacity to ramp up construction and manufacturing. We have not been teaching people the right skills, or the wages have been low enough to discourage people from entering those crafts. So, we need higher wages to attract people back into those trades.

    In sum, I do not think my comment was so bad.

    And WWTD: What Would Trump Do?

  30. Gravatar of Benjamin Cole Benjamin Cole
    14. January 2017 at 05:09

    Add on to the add on:

    And besides all that, rather than suffocate the economy to avoid 3% annual wage growth in production worker positions, would it not make more sense to go to a supply-side solution?

    How about cutting taxes on the first $20 an hour in wages? That would free up supply.

    BTW, for comic relief, here is a chart, and I am not making this up, from the WSJ on where the labor shortages will be:


    “Labor Shortages Index

    Occupation Percentile Ranking

    Occupational Therapy and Physical Therapist Assistants and Aides 100.0%
    Mathematical Science Occupations 98.9%
    Health Diagnosing and Treating Practitioners 97.8%
    Religious Workers 96.8%
    Plant and System Operators 95.7%
    Nursing, Psychiatric, and Home Health Aides 94.6%
    Rail Transportation Workers 93.6%
    Social Scientists and Related Workers 92.5%
    Other Construction and Related Workers 91.4%
    Other Installation, Maintenance, and Repair Occupations

    Now some of the above make sense. Mathematical sciences occupations for example. (So why do lawyers make quadruple what math dudes make?).

    I am happy to see “Social Scientists and Related Workers” will be experiencing “labor shortages.”

    Religious workers too!

    Railway transportation workers? Now really, a shortage of railway workers is not a matter that higher wages would solve? The US cannot produce construction workers? Dudes, are we now defying “shortages” to mean wages will rise? I call that supply and demand.

    So here is the ticket friends: Become a railway worker and itinerant preacher! Ride the rails for wages, then pick up some big money on Sundays preaching fire and brimstone!

  31. Gravatar of ssumner ssumner
    14. January 2017 at 08:37

    dtoh, On foreign policy, see my new post.

    How many years does it take to train workers to do construction? We’ve had a shortage for years. In 1942-44 we suddenly retrained zillions of people, including housewives, to build weapons.

    My point here is that people often complain that the modern economy does not have jobs for non-college men. But it does, as even you agree. Perhaps some need a bit of training to do construction, or welding, or police work, but nonetheless these are jobs that would be appropriate for non-college men. Aren’t there low cost community colleges that teach this stuff? I don’t see where your comment actually addresses anything I said.

    In any case, it’s clear that monetary policy is not going to solve this problem. I mean, what does it say if the unemployment rate is 4.7%, companies are complaining they can’t find workers, and YOU AREN’T EVEN OUT THERE LOOKING FOR A JOB! I’m not saying I have all the answers, but the answer is no more likely to be monetary stimulus than it was during the 1970s stagflation. It seems to me the answer is supply-side policies. Indeed I remember a time when you had the same view.

    Philo, Monopsony power.

    Ben, Do you pay no attention to my responses to your comments? If you don’t agree with my responses then fine. But don’t pretend that I have not responded to your “no such thing as labor shortage” comments.

  32. Gravatar of Dtoh Dtoh
    14. January 2017 at 08:43

    I mostly agree about supply side, but I will respond more fully in the morning. Right now I’m on a flight from Bangkok to Tokyo and they’re about to shut the doors.

  33. Gravatar of Philo Philo
    14. January 2017 at 10:50

    Employers want to hire more workers, but they can’t find them because they (the employers) have monopsony power?

  34. Gravatar of BC BC
    14. January 2017 at 14:55

    China already claims the South China Sea and Taiwan as part of its territory so, in effect, they admit to doing in their own mind, and to aspiring to do in practice, what Russia has done with the annexation of Crimea. Their military build-up in the South China Sea is part of their military strategy to give them the capabilities to defend their annexation claims. Characterizing that as “dumping some gravel on an uninhabited reef” doesn’t seem to capture the context. It’s like saying that Russia merely sent some “visitors” to Crimea; the Crimeans were the ones that voted to join Russia.

    I agree that Trump’s Putin-sympathizing is bizarre. I don’t know whether Tillerson is a Putin sympathizer. If he is, then he at least tries to hide it more than Trump. But, in my opinion, China apologists are no better or worse than Putin apologists.

  35. Gravatar of dtoh dtoh
    14. January 2017 at 19:00

    So a couple of things.

    1. It’s not a question of a “bit” of training. I’m affiliated with a manufacturing enterprise. It takes 6 to 12 months of training for “unskilled” jobs. Skilled jobs take to 6 to 12 years.

    2. I agree we mostly need supply side solutions, but the danger is that if the Fed believes the economy is over-heating at 2.5% real growth and 4.7% “official” unemployment then the monetary offset (is that a real econ term or did I just make that up) will choke off potentially higher growth. I think you need to look carefully at the LFPR because we have had 10 years of bad monetary and bad supply side policies, and as I have argued it takes time to reverse that. The short term labor supply is not the same as the long term labor supply.

    Benjamin Cole,

    To your question,”You would think trade schools would pop up to serve that market, maybe financed and certainly directed by the industry.”

    The company with whom I’m affiliated works closely with community colleges and state universities to help develop curriculum and makes substantial ongoing donations to build facilities and hire faculty. Most of the major manufacturers in the area do the same.

    Also have a look at General Assembly (https://generalassemb.ly/). It is growing rapidly, highly rigorous, not at all inexpensive and highly regarded by employers. There are other similar schools.

  36. Gravatar of Jerry Brown Jerry Brown
    14. January 2017 at 22:49

    Professor, there is an investment survey site that pops up when I go to your blog, maybe 20% of the time. Only this blog, so I figured it was a sponsor for you and answered a lot of the questions since I enjoy your blog. Is this a legit sponsor or was I phished or whatever it is called?

  37. Gravatar of Saturos Saturos
    15. January 2017 at 04:20

    My biggest political belief update of 2016: Krugman was right all along about politics, and the US Republian Party truly is the devil.
    Second biggest update: democracy is exactly as fragile as it looks, and there are no “Avengers” hiding in secret conspiring to prevent it all from collapsing. (Or if there are, they’re too busy infighting; which I gather was the plot of several of the movies recently made about them.) Therefore things that look like obviously bad ideas (centralized powers of total surveillance, running Hillary Clinton for President) really are as bad as they seem, not decisions that are actually wise if you have enough inside knowledge.

  38. Gravatar of Bill Woolsey Bill Woolsey
    15. January 2017 at 05:21

    There are statistics on discouraged workers. There aren’t many right now.

    They are people who say they would like to work, are not working, and explain why in a way that refers to difficulty in finding work.

    There are also people who are loosely tied to the labor force. They say they want a job, are not looking, and have some noneconomic reason for not looking. For example, they have to stay home and take care of an aging parent or small children.

    There are people working part time but would prefer full time work.

    None of these things are new and they move with the unemployment rate and have fallen over the last 7 years.

    If grey market employment is increasing, we might be having worse problems with the statistics. Those working in the grey market might honestly report that they are employed, perhaps even full time, but they find that work unsatisfactory. Or they might be too fearful to report that they are working, but also don’t pretend to be looking for a job. I am not working, nor am a looking for a job. But they vote Trump because they really would like a formal sector job like they used to have, or their grandpa had.

    I suppose there are statistics on disabled workers, but it is also possible that someone claims complete or partial disability, and they do have problems, but they would suffer through the back pain if they could get a “good” factory job. Still, they report that they are not working nor are they looking for work. When the Department of Labor calls to survey statistics, they might worry about saying that they would like to work and keep an eye out for good jobs that will pay enough to compensate for the pain and the disability.

    By the way, I think labor shortages are fine and so are rising wages to fix the shortages.

    Also, if equilibrium wages fluctuate, the downwardly sticky wages are going to deter wage increases and so make wages sticky upwards too. I would guess that signing bonuses or something would help with that problem.

  39. Gravatar of ssumner ssumner
    15. January 2017 at 09:20

    Philo, Isn’t that the standard textbook theory of monopsony? You set the wage below the market clearing level.

    BC, The Crimea has been internationally recognized as part of Ukraine, and has a sizable population. Those tiny islands are claimed by about 6 countries, and were totally ignored by everyone until a few years ago. They have no native population. They don’t matter. Sorry, but it’s not even close. If China restricts shipping lanes, then I’ll agree with the hawks.

    Also, keep in mind my point, Tillerson wants to be far TOUGHER with China than Russia. Why, if the cases really are similar? He’s not saying Russia won’t be allow access to the Crimea

    You said:

    “I don’t know whether Tillerson is a Putin sympathizer. If he is, then he at least tries to hide it more than Trump. But, in my opinion, China apologists are no better or worse than Putin apologists.”

    I agree about China apologists. I despise the Chinese government, I just don’t want to go to war with them. Ditto for Russia. As far as Tillerson, there is no question he is a Putin apologist. He’s on record calling Putin a “friend”. How can one be friends with a murderer?

    dtoh, You said:

    “It’s not a question of a “bit” of training. I’m affiliated with a manufacturing enterprise. It takes 6 to 12 months of training for “unskilled” jobs. Skilled jobs take to 6 to 12 years.”

    Then how the heck does monetary stimulus fix this problem???? Why does everyone complain there are no factory jobs for non-college men, if (as you claim) non-college men can’t do those jobs anyway?

    As far as choking off growth, if the Fed does that I’ll be all over them, as I was in 2008-13. But right now all the signs point to the exact opposite. Wage growth is rising, which is not what you see when a central bank is “choking off growth”.

    Jerry, I don’t have any official sponsor, and I have no control over the ads (which are different for each viewer.)

    Saturos, Which Krugman was right? The one who said Trump was no different from Romney, or the one who (later) said Trump was totally different from traditional Republicans like Romney? Krugman’s posts from the early 2000s did accurately describe the GOP of today, but did not describe the GOP of the period he was addressing. Trump really is different from Romney, McCain, Bush, Dole, etc.

    Giving Krugman the benefit of the doubt, I think you could say he was prophetic. Fair point. But his constant crying wolf meant that when the wolf really did come, people had tuned him out and so no one cared what the experts thought of Trump. Krugman said the same things about Romney. People got sick of “political correctness”, sick of liberals always calling conservatives “racists”. Now we have an actual racist as president (or at least someone who overtly appeals to racists, I have no idea what Trump’s private views are.)

    Bill, You said:

    “There are statistics on discouraged workers. There aren’t many right now.”

    Very good point. People have their heads in the sand on this issue.

  40. Gravatar of Major.Freedom Major.Freedom
    15. January 2017 at 10:51

    “Wait, aren’t construction jobs supposed to be the sort of work that is appropriate for non-college educated workers?  What am I missing?”


  41. Gravatar of Dtoh Dtoh
    15. January 2017 at 17:37

    When did I ever claim non-college men couldn’t do factory jobs.

  42. Gravatar of ssumner ssumner
    16. January 2017 at 13:48

    dtoh. Then what exactly is your point? Are there qualified workers out there for all those positions, or not?

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