US Underemployment 28.4% for young people, 18.4% in all Age Groups

http://www.gallup.com/poll/141770/Underemployment-Steady-July.aspx

by startuprules • 16 years ago

53 46 16 years ago

jhamburger2• 16 years ago

How is a young person with little or no work experience and no college education "underemployed"? That is basically the least qualified group possible.

potatolicious• 16 years ago

Least qualified for what? In previous decades young people with little work experience and no college education had a solid blue-collar track available to them.

Nowadays, not so much.

jhamburger2• 16 years ago

My point is if you're lucky enough to get a solid union unskilled blue-collar job, great. If you get stuck doing a similar job without a union for much less money, that sucks but it isn't underemployment.

_delirium5• 16 years ago

By definition, someone who wants full-time work but is unable to find it is "underemployed". It's not really a value judgment about whether they deserve more employment or anything, just a statistical category tracking people who cannot find a full-time job (much like "unemployment" is a category tracking people who cannot find any job at all).

joelmichael• 16 years ago

The minimum wage makes it difficult to hire unskilled workers. If it didn't exist, there would be a lot less unemployment for young people just starting out.

_delirium5• 16 years ago

Is that true? My understanding is that classical economic theory predicts this, but empirical evidence has been very mixed.

lsc8• 16 years ago

Lowering the minimum wage, the theory states, will open up more unskilled job hours, and thus decrease underemployment, if you define underemployment as people who work part time, but would like full time work.

the idea being if one guy with one of those parking lot cleaning trucks can clean my parking lot in an hour and it takes, say 10 man hours to clean my parking lot with brooms, if the guy with the truck costs $50/hr to clean my parking lot and a guy with a broom costs $10/hr, it's cheaper for me to hire the guy with the truck. If I can get guys with brooms to work at $4/hr, suddenly it makes sense for me to hire 10 guys with brooms (assuming I need it done in an hour, and the work scales that way) rather than one guy with a truck.

On the other hand, if you hire 10 guys with brooms, you just eliminated a higher paying job in favor of 10 low paying jobs. this will tend to increase the number of people taking work that is beneath their skill level. so one could say that a high minimum wage is a subsidy on skilled labour.

I mean, even my company. right now, most of the provisioning is done by hand... this is because I'm able to obtain fairly cheap (well, quite a bit over minimum wage, but still, cheap by the standard of such things) SysAdmins who /can/ provision people by hand. If the job market was better, I'd be forced to pay much higher rates for my sysadmins, and my current mostly-manual situation would be untenable. Granted, either way, automation is a high priority, but with current market conditions, 'just do it by hand' is an option, and that simply wouldn't be the case if the job market was in better shape.

jrockway3• 16 years ago

If the job market was better, I'd be forced to pay much higher rates for my sysadmins.

Wow, now I know why it takes a week for my machines to be rebooted.

dantheman2• 16 years ago

That is only looking at one side of the minimum wage coin. There are also a lot of people who may only contribute 4$ of value per hour (inexperienced, etc) who would like to work at that wage but won't get hired due to their lack of value. But if they could get a job, they would gain experience and eventually start contributing more value and thus be able to justify a higher wage. Minimum wage hurts those who it is trying protect -- in fact when I worked menial "minimum wage " jobs, I was always actually paid more than minimum wage.

jsz0• 16 years ago

I've been wondering how many of these jobs are just gone for good due to higher efficiency and permanently increased productivity? We assume most of the unemployment & underemployment is caused directly by the recession but I'm not so sure about that. It seems possible to me we had sort of a jobs bubble where companies were overstaffing and the recession just exposed this. If you lay off 20% of your staff and magically the other 80% pickup the slack what incentive is there to re-expand by 20%?

My theory is modern technology and communications have just made certain positions inherently more productive. I can think of a time not that long ago where I may have lost an hour a day driving back to my office just to check my e-mail. Now I do that throughout the day on my SmartPhone while working on other projects. For a less skilled job I look at how grocery stores now scan products by UPC. There goes the job of the 19 year old tagging every can of corn with a little price tag sticker. When you run out of corn your computer inventory (tracked by UPC) knows about it. You spend 30 seconds re-ordering more through a computer instead of 15 unproductive minutes on the telephone waiting for the supplier to take your order. If these scenarios are being repeated in different ways all over the economy I think we need to consider that the rise in worker productivity is permanent and these jobs are gone for good.

dantheman2• 16 years ago

Their is always more work than that which can be accomplished. Unfortunately right now, we don't know what that work is and what its value will be. This makes it extremely risky for people to jump careers since they don't know where to go, and it makes it hard to invest capital/start a business because the future payments are unknown.

If the housing market was at the correct value - not insanely overpriced as it is now people could be employed building bigger/new houses. If certain resources are limited (high price) then investments can be made to harvest them more cheaply. It takes time for people to experiment and for knowledge/price information to make its way around the market. Unfortunately, we also have some government policies that are actively distorting market signals and also increasing uncertainty of the future.

So while jobs disappear for good, new ones will be created -- unfortunately it is not quick or painless. I believe Ned Ludd's town took ~50 years to achieve the same level of success after the introduction of the automatic loom.

jdminhbg• 16 years ago

See here for an economist's take on that: http://www.marginalrevolution.com/marginalrevolution/2010/07...

He notes that there's been "[a] recovery in output, but not in employment. That means a smaller number of laborers are working, but we are producing as much as before. As a simple first cut, how should we measure the marginal product of those now laid-off workers? I would start with the number zero. "

Also here (linked in the above article): http://econlog.econlib.org/archives/2010/07/the_zmp_hypothe....

Kling's pet theory is "recalculation," in that recessions are frequently the result of lots of people being employed doing the wrong thing (in this instance, building and selling houses), and it takes a while for those workers to be "reassigned" by the market to productive jobs. Money quote here:

" Let us talk about the marginal product of worker i in occupation j. In most cases, this is indeed zero. My marginal product would be zero in fishing, medicine, and many other fields. In a complex economy, if you were to randomly assign workers to jobs, ZMP would be the norm, not the exception. The more complex the economy, the more carefully workers must be assigned in order to avoid ZMP."

tkahn66• 16 years ago

This.

I find it absolutely amazing this hasn't been talked about more. I have no idea what the majority of the population is going to do in the near-future. These jobs are not coming back. I posit that a large percentage of the currently unemployed will never be employed in their sector again. We will never reach pre-2007 employment levels because the majority of jobs weren't and aren't necessary.

adammichaelc2• 16 years ago

I up-voted you, but what's up with the reddit-speak? It's unnecessary.

rdtsc• 16 years ago

Invest in some online colleges?

Those who lost their jobs due to efficiency and technology improvements are going to become the target customers of many of those online schools in hopes to switch to a new sector. They will take on a large amount debt as a result and might never actually be able to find jobs -- but the colleges need now worry about that -- they'll get payed by the government...

nl2• 16 years ago

I think you could be right, long term.

In the short to medium term I don't think it is clear. To grow employment, the US needs to grow its manufacturing sector. Many people think that is impossible because of lower costs in China.

However, Chinese manufacturing costs are under increasing wages pressure (see http://www.chinadaily.com.cn/business/2010-07/19/content_101...). For some thing that isn't going to matter - the cost of labor is the main cost in manufacture, so China will be cheaper.

For some industries, though, there are significant capital costs up front. China doesn't necessarily have such a big advantage there, and it's the kind of thing that properly targeted government stimulus (direct or in the form of tax concessions etc) can make a big difference.

Unfortunately it seems that a large part of the political dialog in the US revolves around how bad any form of government intervention in the market is.

The US's competitors don't have that weakness, though.

andreyf• 16 years ago

I have no idea what the majority of the population is going to do in the near-future.

Some part of marketing and advertising? That seems to have been the trend for the last century or so...

Groxx• 16 years ago

I was just wondering how much something like this has affected the programming world. Business shrinks, loses some of its less productive programmers, and possibly gives their better ones more control, or hires more carefully and gets a better one. I think just about everyone here is aware of the massive productivity difference between a low-tier code-monkey and a guru - gurus are cheap for what they do, they're just hard to find.

_delirium5• 16 years ago

That might happen at some places, but often the opposite happens: companies go into maintenance mode where they hire the cheapest possible "just keep the thing from falling over" programmers and sysadmins, and get rid of the expensive programmers, who are often seen as an "R&D" luxury that can be dumped in a recession.

davidw• 16 years ago

The economy is not a zero sum game. After all, the population of the United States was 92 million people in 1910, with vastly inferior technology and productivity. And yet, there are still jobs to go around, and things will improve.

guelo• 16 years ago

B.S. there's lots of things that we as a country need to get done. From our crumbling infrastructure to global warming to preparing for the retirement boom we need to be investing massively, not scaling back. We have too few resources to get everything done that needs to get done, not too little. It is a failure of our markets and our government that so many resources sit idly by.

yummyfajitas• 16 years ago

...preparing for the retirement boom...

Actually, there are very few investments we can make which will prevent retirements from destroying/severely harming the US.

Social security is directly indexed to wages, and medical spending tends to be proportional to the higher wage brackets as well (most medical spending is labor costs).

Virtually any productive investments we make would increase wages, and social security/medicare costs will rise commensurately. The only thing we can do to prepare for the retirement boom is either cut benefits, or massively increase productivity with no commensurate increase in wages.

US Underemployment 28.4% for young people, 18.4% in all Age Groups

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