Non-Health/Ed/Gov Jobs at 1998 Levels

Posted by: Michael Mandel on March 09

For my fans who did not like my previous post on health and education—here’s another that you won’t like.

Since 1998, there has been no growth in jobs, with the exception of health, education, and government.

Read that again, and look at the chart.

healthed2_28152_image001.gif

In February 2009, there were 92 million jobs outside of health, education, and government. That’s just where we were in September 1998.

Over the same period, health, education, and government added 7.2 million jobs (about 1 million of that total were non-education government jobs).

You (yes, you out there) may think that health and education are the least productive sectors of the economy. You may think that they are a drag on the private sector. You may think that the failure and cost of health and education are a cause of the problem, and not a solution.

But the rest of the economy is *not* creating jobs. Not, not, not. And no magic fairy dust can make U.S. corporations create jobs in the short run. It isn’t going to happen.

On the other hand, the American people are willing to pay for access to healthcare and education, even today. And arguably, improving these sectors can pay off with enormous benefits.

This is our economic policy, folks, for better or for worse. More jobs and more spending in health and education. The health-education fiscal policy lever is the way to go.


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Reader Comments

Brandon W

March 9, 2009 11:43 AM

Interesting. Government doesn't really produce much; it's more a maintainer of the status quo. So I suppose that leaves us with education which ought not be teaching anyone to do anything but work in healthcare, because that's the only thing left to do. Unless you want to be a teacher... who is preparing people to work in healthcare.

max zeledon

March 9, 2009 12:58 PM

It's great that you point this out Michael because it's something mainstream financial media has failed to do. Robert Reich has been writing about this for some time now on his econ blog. Thank you for this!

empedos

March 9, 2009 01:31 PM

Our host has had enough. I like his new style. Passion combined with facts and numbers as always.
Must be frustrating to confront so many looking into the future with yesterday's eyes. The attitude of many towards health and education reminds me of a friend who hates all women after a failed marriage and keeps his options closed. He has missed though many promising opportunities by not even examining them. What a pity!!!

Viking

March 9, 2009 01:51 PM

Mike,you wrote that "improvements in these areas can pay off with enormous benefits".How does throwing more taxpayer money and hiring more people into these areas,by themselves improve them? I have argued that more spending in these areas,if it is targeted towards productivity improvements,may be a good thing for the government to do during the recession.As for the economy not creating jobs outside health and education since September 1998,I believe that jobs are created to satisfy demand from consumers and businesses and that because of outsourcing and productivity improvements that demand was satisfied with the same number of workers.As I have posted earlier,it is a dilemma,as to how we get back to to full employment,if consumers decide to forego consumerism,as in the past,but just throwing money into health and education to have more people employed,is not the answer.Following that logic we can hire a lot of people to dig holes and then fill then fill them up again!!

CompEng

March 9, 2009 04:18 PM

I think Mike has revealed his colors by his concern about jobs over economic efficiency.
One can imagine a pretty productive economy that still didn't offer enough jobs to keep but a fraction of the world's people employed, which I'd argue is where the conservative vision ultimately leads. I'm not too thrilled about such a vision. Luckily, the chances it will fully come to pass are small.

I think the chances that government wealth redistribution towards healthcare and education will pay off in economic productivity is pretty minimal. The chance that it will help us avoid the dollar crash that will come when the US turns to inflation because its debt is too onerous is also minimal. But it will keep people employed, provide an amount of social stability that will soon be badly needed, and provide a stage for building on when the speculative economic accounting starts to get brought into line with reality.

So I agree with Mike that we need a jobs project (preferably one aimed at one-time reform, so it tends to obsolete itself), and healthcare and education are relatively good targets. We may not be getting our money's worth in healthcare products, but we get an immensely better bang for the buck on every front than hiring people to dig holes. Although if we put subways in those holes, that might not be such a bad investment, either.

It's like buying a house: typically not a great monetary investment, but it has the virtue of allowing you to live in a nicer place than you otherwise could. In a better world, a government wouldn't be the one paying for this, but certainly no one else is going to pony up. You could argue that that's justification for not doing it: I argue that in this case it just means that people don't understand the alternatives.

ffn

March 9, 2009 04:46 PM

The data presented above say the only growth areas are those that exist in non-market based economies (health care - where for most people care is paid for by someone else) or largely monopolies (education) or monopolies (government).

How do we reconcile the facts on the ground versus the economic theories taught to us in college courses such as free markets are the most efficient and effective way to meet needs?

The greatest era of innovation ever just passed by; the greatest era ever of globalization just passed by. And we are now worse for it? Did globalization result in a decrease in jobs in the U.S. for those fields outside health care/education/government? (That outcome was not supposed to happen the globalization theorists taught us.)

Are economics theories simply wrong? Worthless?

Please reconcile the contradiction between the real world data and the economic theories.

Lord

March 9, 2009 05:29 PM

These are growth industries and will remain growth industries for some time. The ageing of the population will see to that, and the desire to live forever knows no bounds. That is as close to ultimate consumer desire as we have come. Blame the lack of innovation in other areas of the economy or the lack of interest in those innovations, they are no longer satisfying real human desires the way these are. We will have to pay for it in areas such as bioengineering, medical technology, pharmacology, etc. Perhaps we will end up as non-profit charities supported by global donations.

Kartik

March 9, 2009 07:28 PM

Is it not a possible conclusion that the health/education/government sectors are sucking up capital that could have created jobs in productive sectors?

So while health/ed/govt has been the only source of job creation, that hardly proves them to be saviors. They could just as easily be proven as cuckoo birds within this economy that prevent any other sector from growing.

Marty Glover

March 9, 2009 10:35 PM

I am very surprised that the millions of jobs the US economy has created in India, Vietnam, China and Eastern Europe never get counted in these estimates. Oh yeah because somehow it would be wrong to think our investment money should create jobs here. Nonetheless, we have allowed whole manufacturing and white collar industries to be move to other countries and that pretty much corresponds to the last ten years, maybe we should evaluate the real value of one way open markets more seriously.

Raja

March 9, 2009 11:06 PM

My interpretation of these results is a bit different: I think they reflect the fact that health, education and gov't are the few sectors that are a) largely non-cyclical (unlike housing) and b) can't be off-shored.

Job growth in other segments (consumer goods, most notably) has been offshore. It also finally reflects the productivity gains from technology that weren't evident in the first two decades of the IT age.

Ajay

March 10, 2009 02:07 AM

Mike, are you an economist or a government bureaucrat? The reason every other sector has not added jobs is because they've become much more productive: output has risen and prices have fallen in the sectors that don't have huge government interference. Why do you want more jobs created? More jobs through fiscal policy is a political solution, not an economic one. There IS a magic fairy dust that will soon create many jobs, another tech boom started by micropayments. Not only is it a giant waste of money to dump money down the health/edu/govt sinkhole but those sectors are likely to provide weak jobs growth because of their onerous licensing requirements. Don't dignify your prescription by calling it economic policy, it's social policy and bad policy at that.

Osman

March 10, 2009 02:12 AM

Ffn
I believe that the outcome of globalization differs from the taught theories because people didn’t see borrowing in a traditional way any longer. With the rising house prices and stock markets going up, borrowing became more of the model of spending more today and more tomorrow.

Borrow more money and buy more houses for investment. Get a home equity, and spend it, because tomorrow the house will be worth 10,000$ more...

But the old theories say that if you spend more today, you will have less for tomorrow.

So the reason why the outcome is now different from the globalization theories is that the model had one more variable. The way people borrow money.
The FED reduced the interest rate to 1% and it was made easy for people to borrow money easily. The market wasn’t regulated by it self anymore. It was manipulated and that’s why the theories didn’t work.


Richard Woolhouse

March 10, 2009 06:00 AM

This is not at all surprising given relative productivity trends in manf and services and the fact that health and education are "giffen goods" so as income rises we consume a higher share of them. Or put another way as the % of expenditure on shelter, food and transport declines due to rising incomes and falling prices the share spent on health and education must necessarily rise. Of course you may argue that median incomes are stagnant and that is true but in aggregate these trends still hold up.

Mike Mandel

March 10, 2009 08:17 AM

Kartik writes:

Is it not a possible conclusion that the health/education/government sectors are sucking up capital that could have created jobs in productive sectors?

Kartik, yes, of course, that's the other possible interpretation. But I'm looking at the demand side of the economy as well. Suppose I asked you...do you think the average high school graduate, would be better off spending $40,000 on a luxury car, or $40,000 on getting an associate's degree from a community college?

munidas pereira

March 10, 2009 08:44 AM

The US spends a much higher percentage of its GDP on health and has worse outcomes (shorter life expentancy, higher infantile mortality rate and about 15% of the population uninsured)compared with Canada. This shows that the exsting health care system is nor providing value for money.
munidaspereira@yahoo.ca

Brandon W

March 10, 2009 09:35 AM

It's too bad that increased productivity has only led to more work, more stress and unsustainable consumption rather than decreased workloads so people can enjoy time with friends and family.

Chuck Pearson

March 10, 2009 10:48 AM

Please consider the effect of capture and sequestration of carbon dioxide in relation to starving many of the earth's 6.9 billion inhabitants. Sixth grade science teaches the atmospheric cycle and the effect of reduced carbon dioxide on plant growth. Efforts to combat climate change (formerly global warming) are in reality an evil plan by advocates of one world government to control global population through starvation by reducing production of food crops. If the prospects of this despicable hoax were not so frightening, its support by individuals and organizations, especially religeous organizations would be laughable. Al Gore is correct. Climate change is a moral issue. Intentional starvation of billions of people is the most important mroal issue of modern times.

podler

March 10, 2009 11:02 AM

None of those sectors are wealth producers! How can they drive recovery of the world's biggest economy??? Mandel is an economist???

Education and Healthcare rely fundamentally on huge federal support. Take away that federal money, and both collapse. Federal govt. spending is severely hampered now and will be more so in the near future as the U.S. took on trillions of dollars of debt in order to prevent a complete financial sector collapse. If, as Mandel writes, the private sector will not, not, not produce jobs, then the federal government will not, not, not be able to support either education or health care as it had.

Dave

March 10, 2009 11:34 AM

>> Job growth in other segments (consumer goods, most notably) has been offshore.

I agree. The job growth has been in Asia, funded by the US trade deficit.

As ugly as that graph is, if it were normalized for labor force growth it would be even worse!

We have the same number of jobs as in 1998 but the number of workers has grown by ~15%.

The last decade has been a catastrophe for American workers. Thank you Michael Mandel for at least paying attention!

Viking

March 10, 2009 01:09 PM

Brandon W,I agree with you that this is the area we should be focusing on.Who said that we have to work 40 hours a week?Why not have a system where as productivity increases the hours worked are decreased.That way we would not have to have ever increasing consumption,in order to sustain the economy.More time for family and friends instead of ever increasing amount of toys.

LAO

March 10, 2009 01:12 PM

This data inspires me to raise 2 points.

Many people like to point out that consumers are responsible for 70% of the economy. The Business Roundtable has done a good job of promoting their notion that the best guideline when considering legislation is to do no harm to business, something that has prevailed more often than complainers on behalf of business care to admit. I have been mystified as to why the largest "corporation" -- consumers -- do not command an even more powerful mandate to do no harm. I think even the last administration may have realized this deficiency and tried to cover it up through government funded employment. Business should be happy that, having shed most direct manufacturing, they are left with service-providing employees who can be jettisoned at the first sign of trouble, and letting government deal with the problem. The data demonstrates this behavior. They are no longer stuck with buildings full of capital equipment that is not paid off but which has gone idle -- that lies in the hands of foreign companies. They are less at the mercy of Fed tinkering with the cost of capital. However, this model invites business to destroy the very source of their profits -- the consumer who will consume very little without job security -- and a downward spiral effect is pre-determined in response to any disruption. The efficiency of the market is moot when the consuming side of the equation is missing.

The best I can fathom in the way of an economy that is more robust is to back off the dependency on the consumer and replace it with dependency upon the sun and wind and sea and land. I believe there is a good chance that we have only begun to exploit these through innovation and efficiencies that well-educated people who do not eschew science can deliver, and any business that has an honest intention to deliver over the long term will take their share. Decades of cheap energy and resources diverted our attention from what is possible and necessary. It would be impossible to provide sufficient backup in a blog to get any doubter to agree with me, and it is hardly provable anyway except through anecdotal evidence.

Health care has been an outlyer because it holds the consumer hostage, demanding "your money or your life". Education also holds sway over us as we cling to the hope that it can save us and our children. I can buy that these can rise to fill the current gap only if new models are employed that yield something similar to the way technology markets have often behaved -- decreasing cost and correspondingly greater accessibility. That is such a great leap from where we are that I don't know if it can be done, but it is worth a try.

Tom E.

March 10, 2009 01:38 PM

From what I can see, in developed countries, globalization makes the rich wealthier. It improves net standard of living of the poor. However, it hollows out the middle class with less jobs and less income. This is not a political, xenophobic or Luddite comment, just the facts. The American Revolution was started by the middle class. The rich and poor were for the monarchy. Perhaps its time for a new revolution.

CompEng

March 10, 2009 02:07 PM

Viking, Brandon W,

We do have the freedom to take a part-time job instead of a full-time job. That gives you less money but more time. I'm not sure precisely what you want that you can't get.

Kartik

March 10, 2009 02:37 PM

"Suppose I asked you...do you think the average high school graduate, would be better off spending $40,000 on a luxury car, or $40,000 on getting an associate's degree from a community college? "

Michael,

I would say $40,000 spent trying to start a small business would be the best.

But in your two-option question, yes, the education would be better than the car.

However, it becomes a slippery slope once one believes that more government jobs can save the economy. In the long run, quite the opposite is true. More government jobs = higher taxes = less entrepreneurship.

------------------------------

I say the solution is to remove all income and cap gains tax from entrepreneurs. If someone starts a successful company, let the founder be tax free on proceeds from stock/stock options of the company he founded. This will still be revenue-positive for tax revenues, as the entrepreneur will generate enough jobs for employees who still pay the normal tax rate.

Of course, the tax code will have to be well defined to minimize abuse.

But extraordinary people will be far more incentivized to be entrepreneurs.

But America won't do this. Some country in Asia will. Then, we'll start seeing productive Americans go move there.

Kartik

March 10, 2009 02:47 PM

I don't think people should be bashing outsourcing.

If a US tech company creates jobs in India or China, how is that different from Honda, Toyota,, or BMW creating jobs in the US?

Plus, creating a middle class in India and China eventually means they become consumers of our exports.

Plus, you can always buy the stock markets of India and China, which is easy to do via US-traded ETFs like IIF, FXI, etc.

Furthermore, healthcare and education can also be outsourced. Education through e-learning (done by companies like tutorvista) and healthcare through medical tourism (estimated to take $160B out of US healthcare spending by 2017).

Kartik

March 10, 2009 03:00 PM

The bottom 60% of the US population will experience a stagnation or decline in living standards for the next decade or two. This is because they are in jobs that 30-40% of India's and China's population can ultimately compete with them for.

The top 25% of the US population will not be at risk of losing their careers, as only 1-2% of India's/China's population can compete with them (and those Indians/Chinese have traditionally come to live in the US anyway).

The unemployment rate for engineers in the US still is still very, very low, despite the screaming about 'outsourcing'.

But someone in a low-end desk job or assembly line job earning $50,000+ a year ($150,000 in the case of unionized auto workers) is not sustainable against global market forces.

CompEng

March 10, 2009 03:12 PM

LAO,

Let me try to answer what your saying: go ahead and let me know if I've got it wrong.

If 70% of the economy is consumer-driven, then actual consumption is not supply-limited, but demand limited. That is, we have untapped productive capacity but no one willing and able to pay for it. The American middle class was a huge aquifer of money ready to be spent on consumption, but the flood of cheap credit has passed, and that aquifer is starting to drain.
With the money running lower, demand is draining, and production follows.

The size of the economy is not currently limited by productive capacity, but by demand, specifically the demand of those with money, and if you're losing your job or your house, you don't have any.
Throwing money at healthcare and education are primarily income redistribution measure, but they have a lot of nice fringe benefits compared to other methods. They're more temporary, more indirect, and may increase the production of something those who do have money want to buy, so it's somewhat self-sustaining, and you have a much better chance at getting most of your money back than with more direct measures like welfare.

Essentially, when you're demand constrained, you force those with money to spend it one way or another in order to bring more people into the economy. When money is tied up in corporations whose fundamental charter precludes consumption for consumption's sake, taxes and government spending are actually a reasonable way to go. This restructures the pie, but also has a good shot at increasing its size as well.

Can we afford to pay for it? Maybe. I suspect that a lot of the debt flying around is just going to get devalued one way or another. The recent economic bubbles created huge speculative wealth and huge speculative debt. The wealth is being destroyed: proper accounting would take the debt with it, but that's one of the loopholes in economics. Maybe inflation will eat much of the debt, maybe much of it will have to get written off. Either way, I don't think the real incentives right now are with simply cutting spending to pay it off, because we can't afford that either. Basically, it's a big Keynesian bet. The part they don't talk about is that it's somewhat equivalent to just taking money from those who have it and using it to pay people to build stuff we think people might want, but in a sneaky way.

The issues regarding renewable energy and resources are separate issues, but also one where market economics encourage short-term thinking.

John Bailo

March 10, 2009 03:20 PM

I don't buy it. Health care is plentiful but artificially expensive. Same with quality education. There are plenty of people in these fields but regulation and government keep the prices prohibitively high.

Americans need to get ready for the real job growth in 21st century technologies. The "web boom" of 1999 was just a mere blip of what is to come...

logic

March 10, 2009 03:29 PM

Things are playing out pretty much as predicted in 1996 by World Bank economist Herman E. Daly. For all the politically unmentionable reasons Daly identified. C'est la vie.

logic

March 10, 2009 03:37 PM

Empedos, I'll recommend to your friend to discern between women, the warm blooded animals, and marriage, the legal institution. If he can steer clear of the institution, he'll be insulated against the vast majority of risks associated with partnering with women. Most young men in major metro areas have no plans to ever marry now, for precisely this reason.

Kartik

March 10, 2009 04:23 PM

"It's too bad that increased productivity has only led to more work, more stress and unsustainable consumption rather than decreased workloads so people can enjoy time with friends and family."

Wrong. Productivity is measured on a per-hour basis.

A person can CHOOSE to work less and spend time with friends and family.

Why is the leftist solution always to FORCE lower work hours, rather than allow choice? Well, laziness needs to be glorified.

Ajay

March 10, 2009 09:30 PM

Kartik, I agree with most of what you say but I don't think the near future will be as stagnant for the bottom 60% in the US as you claim. First, another tech boom will float all boats and many can move into new jobs created by tech: the bank clerk can become an audio transcription proofreader, checking automatically generated transcripts of voice recordings for errors. Second, as they move to service jobs that can only be done locally, such as haircutting or car repair, they will benefit from the trickle-down effect from the top 25%. As for the top 25% in the US not being impacted by foreign competition, I have to quibble with your numbers. 25% of the US population is 75 million, 1-2% of the Indian and Chinese populations is 25-50 million. That's a big number so volume is not the issue, it's skills and free markets. If any significant proportion of the top 1% comes here, it's because they're much better off in the freer markets of the US. I think the working hours issue is important, as most employers aren't flexible on how much time an employee can put in. There are part-time positions for a majority of lower-paid jobs but not usually for middle-rung or professional positions. This mindset needs to change, as it's inflexible in situations like today when demand is dropping and because it doesn't take into account the real work/leisure preferences of different people. Imagine going to an engineering or financial firm and telling them you wanted to work 30-hour weeks and would take a proportionally lower salary? You'd be looked at like an alien and wouldn't be invited back. It would be easy to alleviate the current situation by using furlough days or scaling back workweeks more and more as necessary. On the other hand, recessions provide employers political cover to fire their most unproductive workers. They may not want to fire these workers or close money-losing branches during good times for political reasons, but such mass downturns provide a good excuse for such employers. Free marketers know that such downturns are a part of a healthy economy, clearing the deadwood for future growth. It's only leftists, who're more interested in "social stability" than economic growth, who then push Keynesian "solutions" for such retrenching: obviously Mike Mandel agrees with them. Getting back to flexible workweeks, there's obviously no need for govt mandates, as in France, but there is a need for employers' outdated and counter-productive mentalities to change.

CompEng

March 10, 2009 11:19 PM

Ajay,

"Imagine going to an engineering or financial firm and telling them you wanted to work 30-hour weeks and would take a proportionally lower salary?"

Actually I've worked with at least 3 design engineers who did exactly that, and so far have gotten away with. That's just a bit less than the number of engineers that got away with telecommuting entirely.
It's certainly not the rule, but it does happen. I think in those cases the employees has all pretty much proved they were good before they cut hours or moved away, though.

Matt

March 11, 2009 12:37 AM

Michael-

All that you have shown is that these jobs are less cyclical. This is exactly the reason they don't need stimulus. We should stimulate sectors that are MORE cyclical because they will actually respond to stimulus. These jobs leave fast with the business cycle, but they also come back fast with the cycle too.

I think you are confounding short-term stimulus and long term sectoral evolution. These sectors are only stable because government is willing to run massive deficits to support them. Unless you think massive deficits are forever sustainable, then this is not sound growth policy.

The sectors are the result of central planning dictate, not the result of comparative advantage through productivity.

When you say that other sectors have not added jobs, you are assuming that those cyclical jobs are gone forever, never to return. That is a bit ludicrous. Retail has added many jobs. IT has added many jobs. What about personal services? You erase these jobs because you offset them with losses in construction an manufacturing and other cyclical sectors. I am certain that in 6 years there will be more construction jobs than today. There will probably be more auto jobs too, just maybe not the Big 3.

I am sorry, stimulating non-cyclical sectors that cannot flex capacity up with any necessary speed while ignoring latent productive assets in cyclical sectors is a recipe for stagnating inflation.

Stimulate the industries that will respond most aggressively to stimulus by deploying latent assets. These are construction, durables manufacturing, professional services, business services, and retail.

Anything elses is simply extending the distortionary impact of the centrally planned part of our economy.

You are also playing sleight of hand because you are comparing

Matt

March 11, 2009 01:17 AM

Mike-

Would this analysis in 1992 have predicted the IT explosion?

Also, are you lumping pharma, medical devices and biotech in with Health Care?

There is a critcal distinction there. Those are essentially manufacturing jobs by another name. These industries make stuff, not provide services.

There is no doubt that health care will add jobs, this is inevitable due to sheer demographic inertia, so why blow hard into the sail when you have a strong gale at your back?

The problem is that the recipients of most health care will neither pay for it directly or be made more productive in the economy. It is an because of it. It is an investment with nearly a -100% ROI.

This does not mean we euthanize retired people, but a healthy private sector ultimately has to finance it. If there is no healthy private sector to cover the cost, there can be no health care boom.

Your argument assumes there can be a goose before the egg. The only goose that can lay a Golden Health Care egg is a robust, growing private sector.

You call it a decade of failure, and yet your apparent strategy is to REPLICATE it in the next decade as well.

Tell me I am missing something here. A distorted economy, yet further distorted does not look better unless you look at it with funny glasses on.

My point is that we had no idea what jobs would come in 1992. The private economy decided that. It may very well be some new kind of manufacturing for all we know(maybe nano-tech?). Since we can't know we should not force the outcome with command and control policy.

In the near term we should stimulate what needs stimulating and can recover lost jobs fastest as the cycle normalizes.

Let markets take care of the long term, that is not the job of a stimulus package to predict.


empedos

March 11, 2009 09:32 AM

If I were positioned in charge of an organization in big financial trouble, I would probably start cleaning up the mess from the least productive business units i.e the ones that are a drag for the rest. Pumping more money without any sort of reorganizing would be foolish. But what if reengineering takes place? The new administration has made clear that it intends to do some reengineering like the introduction of electronic medical records (not that I fully understand how this will bring costs down, let's see what they have in mind). Let's wait until they fully unfold their agenda and let's be open minded until then.

Brandon W

March 11, 2009 09:36 AM

Kartik,
Because the entire cost of living is based on the higher prices from the demand inherent in an unsustainable level of consumption, requiring full-time income to support a basic standard of living. Additionally, since the health care system of the United States is based on legally-defined full-time employment, those who choose to work less than full-time are subject to exclusion from the health care system; unless, of course, they want to pay exorbitant prices for independent health insurance(assuming they can even get it). Beyond a healthy standard of living and consumption that is sustainable in the context of planetary resources, there is no good reason to push our society to work harder and longer hours. Productivity should have allowed us to have better lives, not just more stuff.

What's more, you're allowed your opinion, but I am allowed mine. Don't start with your attacks again.

Brandon W

March 11, 2009 09:50 AM

Addendum:
Kartik, if the economy were based on, say, 24 hour work weeks (allowing full health care coverage) you would be welcome to work 56 hours if you felt it was what you wanted to do. My argument is only that productivity should allow us to establish fewer hours as the basis for "full time" in our economy (including health care provision); and that fewer "required" working hours would give people more time with family and friends, more time to volunteer in the community, and more time for individual pursuits.

empedos

March 11, 2009 01:12 PM

To continue Brandon's argument :
Fewer working hours could be a solution for the West provided that non-wage costs (like health care coverage) are pushed down to a minimum level in order to maintain competitiveness. This is one more reason why health care reform should become a top priority, it is related to competitiveness. Unless, health care coverage is completely abolished and we decide that we want to work under the same conditions as Chinese workers(that's another way to improve our competitiveness).
Competitiveness is also related to innovation. Education certainly helps. Unless we decide that we will import well educated work force from India and Hungary and that we prefer being jobless and living on small goverment charities (that's another option ).
Globalization will hurt those who depend on their wage to survive, there is no way out of this harsh reality, the middle class in on the brink of impoverishment. Creative thinking is required and job-sharing should be given some thought under provisions.
Protectionism or creating new wars (bombing Iran to start with)are other options to take us out of this situation (for those who do not want to consider health care reform or job-sharing or any other change of the status quo). There is plenty of options for all different tastes.

CompEng

March 11, 2009 04:14 PM

I fail to believe that lowering work hours will raise wages or help employment.

There are a lot of options to try, but it is the nature of the world that most of them will not perform as expected. It's best to be really wild in the brainstorming stage but much more conservative in actual implementation.

Viking

March 11, 2009 06:16 PM

I agree with BrandonW-again.We need to start thinking ouside the box on these issues.If those of us who agree that the basic needs of humanity can be produced by fewer and fewer people,because of productivity improvements,it makes more sense to look at lowering hours worked,along the lines that BrandonW has outlined,than artificially pumping employment up in the health and education sectors.

Mike Mandel

March 11, 2009 06:30 PM

Matt:

Yes, this analysis would have predicted the IT explosion (because both software and computer systems design jobs continued to grow through the 90-91 downturn).

And as for the other sectors growing over the past ten years--the answer is barely. Retail trade added a whopping 110K jobs over the past ten years..and 100K of those were in drugstores--in other words, health care.

Joe Cushing

March 12, 2009 01:00 AM

At the turn of the last century a large percentage of our population (the number escapes me) were farmers. Today 2% of us are farmers yet we produce more farm products than ever. That productivity increase freed us up to work in factories. We all benefited. Today, factory work has been in decline for decades yet as you told here on this blog, we produce more now (2007)* than ever. One again people are being freed up to work somewhere else.

*Have the 2008 numbers come out yet?

Kartik

March 12, 2009 01:38 AM

Brandon W,

Nothing you wrote answers my point that people already have the choice to take jobs that are 30, 25, or 20 hours a week. Most corporations count 30 hours as the time after which exempt benefits (health insurance, etc.) are available.

You seem to want to enforce a mandated number lower than 40 hours a week as 'full-time'. That is oppressive and illiberal.

Viking

March 12, 2009 09:11 PM

Kartik,you seem to want to maintain the 40 hour work-week as the standard that has not changed,since,I think,before World War II.Why is that not as oppressive as thinking about how to lower the hours worked in light of the fact that productivity has increased many fold since the 40 hour work-week was instituted?Furthermore how do you conclude that people who advocate otherwise are left wing and lazy?
It is a legitimate alternative to ever increasing productivity,necessitating ever increasing consumption in order to facilitate full employment.Also it is not as easy as you think to find jobs at 20,25,or 30 hours a week.Most companies are organized around the 40 hour week.

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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