Some Trends of Interest
By Arnold Kling
1. Menzie Chinn offers charts that demonstrate that unemployment is highest in 2010 among those who had the lowest income in 2008.
Does that mean that they have the stickiest wages? Just kidding.
I think the one thing we could do that would quickly improve the employment prospects of low-productivity workers would be to separate health insurance from employment. If a family of four costs $15,000 per year to insure, then every worker has to be worth $15,000 a year to the employer just for break-even, before the worker gets any take-home pay. That means that somebody who is worth less than $40,000 a year to a firm probably will not get hired. People who are worth $25,000 to $50,000 a year would be more likely to have jobs if taxpayers gave them health insurance vouchers and employers did not have to pick up health insurance cost.
2. At the other end of the education spectrum, Michael Mandel offers data to show that over the past year young college grads were more likely to find employment in government than in any other occupation. Shock me.
3. Finally, Robert J. Gordon joins the Jagadeesh Gokhale demographic pessimism club. This club foresees an increase in the share of the population at the lower end of the educational attainment spectrum, and as a result they foresee relatively low productivity growth.
I wonder how the Sergey Brin effect plays into this. That is, we may be seeing more workers at the low-education end, but we may be seeing more workers at the high-education end, because of assortive mating. What determines national average productivity? If it’s the ideas of those at the high end, then maybe we ought not to worry. Of course, the much-dreaded inequality is likely to continue to emerge.