I spent the better part of last Friday at an Institute for Research on Poverty conference, entitled “Employment Prospects for Lower Wage Workers: Easing the Implications of a Slow Recovery Conference”. It was a tremendous learning experience for me (since I’m not a labor economist), and a chance to be reminded of the full enormity of the challenges facing policymakers, as the economy limps in a fitful recovery, with little succor from further aggregate demand stimulus measures, and threatened by supply shocks as well as incoherence in fiscal policymaking. I mentioned the conference in a post last week, but the presentations and papers are now online.
Category Archives: employment
The Challenges of Long Term Unemployment
The composition and implications of long term unemployment has been vigorously debated over the last year. The most recent informed commentary (skipping non-evidence based assessments [1]) includes Macroblog and SF Fed (earlier discussion here and here). Two conferences on the subject will be held at the University of Wisconsin-Madison, this Friday, and later at the end of April.
The magnitude of the phenomenon can be illustrated by inspecting mean unemployment duration, and number of unemployed over 27 weeks.
On the Underfunded Liabilities Problem (Or Lack Thereof in Wisconsin)
Econbrowser reader Bob_in_MA has argued that Governor Walker’s [the] (edit 7:50am 2/22) desire to strip collective bargaining rights from Wisconsin public employees is derived in part from the high labor costs, hidden in part by large unfunded liabilities (e.g. pensions) in the state. This might be an apt characterization for Massachusetts. It is not for Wisconsin. From the Pew Center for the States:
Some states are doing a far better job than others of managing this bill coming due. States such as Florida, Idaho, New York, North Carolina and Wisconsin all entered the current recession with fully funded pensions.
Speaker Boehner’s Math
Recently, Speaker of the House John Boehner asserted: “…the federal government has added 200,000 new federal jobs since President Obama took office.” Other analysts have tried to find the source for this figure, but I thought of interest to see exactly how bad his math was.
An Alternative Look at the Employment Situation
The employment news is good (I think)
The Bureau of Labor Statistics reported yesterday that the unemployment rate has fallen from 9.8% in November to 9.0% in January, as big a two-month drop as we’ve seen in the last 50 years (hooray!). But in the same report, BLS indicated that their seasonally adjusted estimate of the number of Americans employed on nonfarm payrolls increased in January by an anemic 36,000 (oh dear!). Reconciling the very contradictory claims is even harder than usual, but I’ll give it a try.
The Fed’s new policy tools
We had to throw out our textbook descriptions of how monetary policy is implemented after the fall of 2008, as the Fed turned from its traditional tools to active use of large-scale asset purchases. A number of studies have now been conducted of the potential efficacy of these new policy tools. I surveyed some of the new studies last October. Today I’d like to discuss three new papers that have come out since then.
Interpreting the employment numbers
There might seem to be some conflicting signals from Friday’s employment report from the Bureau of Labor Statistics. But I see a uniform message in the various numbers– the economic recovery remains disappointingly weak.
Forgetting about Demand, Once Again
Professor Mulligan asserts that the payroll tax cut will have little effect on output, even in sticky price Keynesian, and New Keynesian, models. He writes:
Extending unemployment benefits
Here I make two quick observations on the policies being discussed.