Sunday, April 10, 2011

The challenge for workers & the politicians they elect

Karl Smith takes note of the facts that the pace of hiring has slowed, job vacancies have increased, and salary inflation has increased then concludes:

Am I Completely Wrong
It is time to begin considering contingency plans for deep structural problems. What can and should be done if the economy takes off, while leaving many of the unskilled without jobs.

Those concerned about the fate of the unskilled should begin ruminating on these issues. The probability that “fixing it” will make everything ok is dipping somewhat.
Unfortunately for us, I don't believe that either major party has any long (or even medium) term vision for the American work force. "Jobs" and "job creation" are invoked quite a lot, and for good reason, but I'd bet if you polled Congress for their preferred version of the U.S. labor market the top answer would be the low unemployment/low inflation environment of the mid-1990's. How likely is it though that the job market of 2025 or even 2015 can replicate the conditions of 1995?

American workers are not well served by politicians who seek to return us to some perceived "golden age". Instead, workers need leaders who attempt to identify the challenges of today and those on the horizon and then equip those workers to meet those challenges.

One small illustration: Reforming health care by reinforcing the system of employer provided insurance implicitly assumes a model of the labor market characterized by fewer jobs with longer duration of each over the course of a career. While that sounds like a description of the US labor market in the middle of the twentieth century, I doubt very much this is what the labor market of the mid twenty-first century will look like.

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