Note that the employment level for college graduates flattened during the 2008-2009 recession, but is now at a record high level. In contrast, the employment level for workers without a high school diploma is about 2.5 million below the pre-recession peak. Likewise the jobless rate for college graduates has increased by a few percentage points because of the recession (and is now at 4.4%), but the jobless rate for workers with less than a high school diploma has increased by more than six percentage points (now at 14.3%), and was recently almost ten percentage points above its pre-recession level.
Bottom Line: The current jobless recovery, compared to the last two, is more severe and persistent, largely because of: a) the falling employment level and b) elevated jobless rate for workers lacking a high school diploma. While lacking a high school diploma has always been a liability for workers, that liability has gone from a minor liability to now a major setback as we move increasingly into a knowledge-based economy. Comparatively, college-educated workers are doing quite well, it's the less educated workers that are struggling, and will continue to struggle, to find employment and keep a job.
Interesting, I don't know that I'd say the college-educated are doing "well," as the chart shows no net hiring of college grads in almost 4 years now, unprecedented in the 13 years of data. That is perhaps a bigger phenomenon than the hit taken by those without a GED, particularly since there are a lot more college grads, with many more entering the economy every year. It is the college degree that will take a much bigger hit than anything else in the coming years.
ReplyDeleteIs this the product of a changing workplace, or the product of increased regulation and licensing which precludes entrepreneurial endeavors?
ReplyDeleteIf we had a V-shaped recovery, the federal government would be collecting much more in taxes and spending much less in entitlements, including unemployment benefits. Also, state budgets would be stronger.
ReplyDeleteThe Obama Growth Discount
APRIL 15, 2011
If we had matched the 1982 recovery rate, today annual per-capita income would be $4,154 higher than before the recession—that's an extra $16,600 for a family of four—and some 15.7 million more Americans would have jobs.
Some apologists suggest that the current recovery is so weak because the recession was so deep. But the totality of our experience in the postwar period is exactly the opposite—the bigger the bust, the bigger the boom that follows.
Federal spending 2007: $2.73 trillion.
Federal revenue 2007: $2.57 trillion.
Budget deficit 2007: $161 billion.
Federal spending 2011: $3.82 trillion.
Federal revenue 2011: $2.17 trillion
Budget deficit 2011: $1.65 trillion.
(2011 estimates)
Once upon a time we had low end manufacturing jobs for those with no high school. They did not earn a lot but they had enough skill to earn a decent living. Then we decided to sacrifice those jobs to the Great God Free Trade. As a nation we have nobly decided unemployment for those without high school is better than having trade protection. Jobs once done by Americans without high school are now done by non-Americans without high school. Collateral damage from these lost jobs is a growing number of college graduates who once got jobs as management and administration in businesses that employed these workers are now moving back in with their parents after graduation.
ReplyDeleteThe blessings that the Great God Free Trade bestows upon us for making these sacrifices can not be seen by ordinary people. But not to worry. Universities backed with money from multi-national corporations ordain High Priest Economist with PhDs to go forth and preach the Gospel of Free Trade to the heathen. What a pity those unemployed high school dropouts can not comprehend the wisdom of sacrificing jobs for which they had the skill and experienced to do. In any event their plight is nothing a sophisticated college graduate should be concerned about.
James, if we slowed the inevitable, most of us would still be farmers.
ReplyDeleteJames, if the US high-school dropouts want those outsourced jobs so bad, why don't they move there and work them? ;) Oh, that's right, they don't just want those jobs, they want to be paid more for doing the same work, despite many others willing to do it for a lot less. Why would that deny jobs managing them to the college grads though? The college grads could just manage the workers abroad. As for the high-priest economists demanding sacrifices, don't worry, they're next to be butchered on that altar, as the colleges are about to be destroyed next. :)
ReplyDeleteWhen you see the losses of low-paying jobs, you also need to look at the gains of high-paying jobs.
ReplyDeleteWhat economists seem to forget is the lesson on controlling prices taught in econ 101. The Fed's pushing the fed funds rate to 1% in '03 led to a massive shift into jobs requiring little education. Young and old found great jobs related to construction, real estate, and even financial services. Then the Fed pulled the rug out by sharply increasing rates.
ReplyDeleteSadly the power that comes from micromanaging fiscal policy and monetary policy has culminated into a problem that will end up seeing the good economics thrown out with the bad.
This, yo me, is the story of your graphs.
Where are the education data from?
ReplyDeleteAnother example of the "Great Stagnation." Only the educated can take advantage of any new growth in our knowledge economy.
Data are from BLS, graphs have been updated to reflect that.
ReplyDelete"If we had a V-shaped recovery, the federal government would be collecting much more in taxes and spending much less in entitlements, including unemployment benefits"...
ReplyDeleteWell PT maybe its more of a W shaped recovery...
From 24/7 Wall St: Ten Signs The Double-Dip Recession Has Begun
I'd like to see the difference between college grads and high school grads who didn't graduate college. Wonder if the difference would be so dramatic?
ReplyDeleteThe data are clear that more education means more opportunities and higher lifetime earnings, but traditional college is not the only option. Here’s a quotation a from report I am writing for a local college to justify a new program:
ReplyDelete“The Georgetown Center projects that 14 million job openings—nearly half of those that will be filled by workers with post-secondary education—will go to people with an associate’s degree or occupational certificate. Many of these will be in “middle-skill” occupations such as electrician, and construction manager, dental hygienist, paralegal and police officer. While these jobs may not be as prestigious as those filled by B.A. holders, they pay a significant premium over many jobs open to those with just a high school degree. More surprisingly,
they pay more than many of the jobs held by those with a bachelor’s degree. In fact, 27 percent of people with post-secondary licenses or certificates—credentials short of an associate’s degree—earn more than the average bachelor’s degree recipient.
And in a July, 2009 report—“Preparing the Workers of Today for the Jobs of Tomorrow”—the Council of Economic Advisors concluded that the fastest job growth is likely to come “among occupations that require an associate’s degree or a post-secondary vocational award.” This analysis is taken from Part 4 of the Center on Education”
For those wanting more Detail, Calculated Risk has anothe good chart
ReplyDeletehttp://cr4re.com/charts/charts.html#category=Employment&chart=UnemploymentEducationJune2011.jpg
Federal policies pushing malinvestment in housing and construction has to be one of the big drivers for this. (In addition to the fact that these workers demand salaries higher than the world's market rate for the labor they can perform.)
ReplyDeletematt-
ReplyDeleteso long as the price of existing homes is so far below the price to build a new one, construction is going to suffer.
i think you are correct in apportioning blame for the bubble and bust to federal policies.
this is going to be with us for some time.
correlation is not causation...
ReplyDeletethose who cant complete school are less capable of holding a job to start with...
Anyone else look at this particular BLS report for July?
ReplyDeleteApparently some outfits are still hiring...
'If' college is generally necessary for 'professional and business services' then it seems that there are double the openings in those field versus in any other particular field...
We shouldn't draw too many general conclusions from this because its a function of the terrible housing market which is where uneducated people can find work and where college graduates run from.
ReplyDeleteWe overbuilt houses for a few years and now we are running off that supply. Lackluster Private Construction is shaving about 2% off of GDP. QED.
It's easy, for some, to blame monetary and fiscal policies for problems caused by other economic policies.
ReplyDeleteWell, wonder if this has anything to do with the 15 million undocumented workers competing for those jobs?
ReplyDeleteUmm... I don't get it. The Democrats controlled the government during the '08-- present time frame, and they're the party of "the little guy," right? How is this possible? Unless, somehow those wascally Wepublicans were able to prevent the Democrats from doing the good that they would normally engage in.
ReplyDeleteCurse you wascally Wepublicans!!
The heading should read "No High School Diploma."
ReplyDeleteThere are no "High School Degrees."
If we had a V-shaped recovery, we would have had the greatest recovery ever, and what excuse would you use to bash Obama then.
ReplyDeleteThere is no logical connection between the speed and depth of a recession and the speed or degree to which recovery occurs: they are caused by different events.
the bigger the bust, the bigger the boom that follows.
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As far as causality goes, that is just nonsense. If that were the case we could grow the economy by deliberately causing a bust - the bigger the better.
if we slowed the inevitable, most of us would still be farmers.
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Yep, that is what my county is trying to do, and why Im still a farmer.
Otherwise, go easy on farmers.
they're next to be butchered on that altar, as the colleges are about to be destroyed next.
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So you predict the End Of Work, too?
What will we replace the work ethic with, to explain the success of those that wind up with more and more of everything?
When you see the losses of low-paying jobs, you also need to look at the gains of high-paying jobs.
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You mean those high paying jobs that are occupied not by wealthy people, but by "the job creators"?
Only the educated can take advantage of any new growth in our knowledge economy.
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I think the knowlege economy is overhyped. On the one hand we have so much conflicting "knowledge" that we cannot seem to agree on anything from global warming to the proper level of taxation. On the other hand there is very little of the knowledge out there that we really need.
We are having a knowledge bubble, and when it collapses we will have real problems.
27 percent of people with post-secondary licenses or certificates—credentials short of an associate’s degree—earn more than the average bachelor’s degree recipient.
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Sounds like a problem to me.
Hydra, my statement:
ReplyDelete"they're next to be butchered on that altar, as the colleges are about to be destroyed next."
your response:
"So you predict the End Of Work, too?
What will we replace the work ethic with, to explain the success of those that wind up with more and more of everything?"
I have no idea what your response has to do with my statement, nor what the "End Of Work" refers to.
"I have no idea what your response has to do with my statement, nor what the "End Of Work" refers to."
ReplyDeleteNeither does Hydra.
Hydra, economies are naturally mean reverting rather than a random walk.
ReplyDeleteOf course, poor economic policies, and a lack of optimism, can keep economies depressed.
In 2007, 20% of U.S. households earned at least $100,000 a year.
They were not all "job creators."
"In 2007, 20% of U.S. households earned at least $100,000 a year.
ReplyDeleteThey were not all "job creators.""
what an absurd statement.
you could not be more wrong.
what?
they don't eat out?
buy cars and homes and take vacations?
creating value gets you paid. getting paid lets you spend money. spending money creates jobs.