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Friday, October 7, 2016

Jobs Update in 3 Graphs

The long, slow recovery continues. First, participation by prime-age workers continues its increase, as does that of those aged 20-24. These demographics bore almost all of the job losses in the Great Recession – I don't include it, but older worker employment actually rose, the "boomers" didn't retire the way their parents did. The same story shows up if we look at the gap between my calculation of expected levels of employment, given boomer retirement, and current levels. Indeed, the number of workers on short hours is now back to historic levels, good news as any strengthening on the demand side will be more likely to turn into new jobs rather than an increase in hours for those currently working.

Now the main focus of this blog is on the automotive industry. While it should not be surprising, given the likely peak in new vehicle sales, the rise in manufacturing employment has slowed if not stopped. But manufacturing jobs are affected by the continuing increase in productivity over the past 20 years. Fifteen years ago automotive manufacturing accounted for a full 1.0% of all jobs in the US. Now that level is peaking at 0.6%. Now the industry has added many software jobs, and will continue to do so to support new safety technologies and infotainment functions.

These data do not capture such employment. Our statistical systems were set up when manufacturing and construction were keys areas of employment, while healthcare and other services accounted for relatively modest shares. Bringing our data systems into the 21st century will require boosting the budgets of our statistical agencies. From the standpoint of the overall budget that expenditure would not even constitute spare change. However crucial such data are to business planning, there is no "business" lobby on Capitol Hill that can speak to such issues, and instead these agencies face budget cuts. It is not just physical infrastructure that is deteriorating, it is also some of the other hidden areas that our economy depends upon that need to be improved.