In part 3 of this series I argued that the changes in employment are the main driver behind the massive rise in inequality in the US. That inevitably brings out a number of responses for how to address inequality, none of which I believe will actually work. At the end of that post I already showed a graph that debunks the notion that this can be solved through better education (at least of the traditional variety). Similarly we now have calls for better labor organizing and higher minimum wag...

This is the third post in my mini series on employment. Part 1 illustrated how agriculture and manufacturing, the two historically large areas of employment, have collapsed over time. Part 2 drilled into the services sector which today accounts for the bulk of employment to show that many categories there have stopped to grow and are under pressure from the twin forces of automation and globalization. Why does all of this matter? My overriding argument is that we have not found a new source o...

In part 3 of this series I argued that the changes in employment are the main driver behind the massive rise in inequality in the US. That inevitably brings out a number of responses for how to address inequality, none of which I believe will actually work. At the end of that post I already showed a graph that debunks the notion that this can be solved through better education (at least of the traditional variety). Similarly we now have calls for better labor organizing and higher minimum wag...

This is the third post in my mini series on employment. Part 1 illustrated how agriculture and manufacturing, the two historically large areas of employment, have collapsed over time. Part 2 drilled into the services sector which today accounts for the bulk of employment to show that many categories there have stopped to grow and are under pressure from the twin forces of automation and globalization. Why does all of this matter? My overriding argument is that we have not found a new source o...

Last weekend I wrote a post about what is happening with employment. The gist was that employment in the US in agriculture and manufacturing has collapsed as a percentage of total employment and declined even in absolute terms mostly as a result of increased productivity and globalization. All employment growth has been concentrated in services. Today I want to take a deeper dive on services, but before doing so I should point out that I am optimistic about technology in the long run. My poin...

Last weekend I wrote a post about what is happening with employment. The gist was that employment in the US in agriculture and manufacturing has collapsed as a percentage of total employment and declined even in absolute terms mostly as a result of increased productivity and globalization. All employment growth has been concentrated in services. Today I want to take a deeper dive on services, but before doing so I should point out that I am optimistic about technology in the long run. My poin...

One of the truly depressing things about listening to the presidential debates was that both sides seem to be disregarding a fundamental factor in the economy: the displacement of humans by “machines” (in quotes because these days the machines in question are computers). Because politicians are largely ignoring the importance of this trend, the proposed policy solutions all belong to the same tired arsenal of either supply side or demand side economics. It’s a bit as if you were on the Titani...

One of the truly depressing things about listening to the presidential debates was that both sides seem to be disregarding a fundamental factor in the economy: the displacement of humans by “machines” (in quotes because these days the machines in question are computers). Because politicians are largely ignoring the importance of this trend, the proposed policy solutions all belong to the same tired arsenal of either supply side or demand side economics. It’s a bit as if you were on the Titani...

I have been struggling to articulate why I feel quite so concerned about the economy but in a dinner conversation last night I had a kind of Eureka moment. It is now well understood that for at least two decades or so we had economic growth that was fueled (at least in the US) by consumer debt, which in turn was made possible by a housing bubble. Much of the political discussion today seems premised on the idea that once we are done with de-leveraging, households will return to spending and e...

I have been struggling to articulate why I feel quite so concerned about the economy but in a dinner conversation last night I had a kind of Eureka moment. It is now well understood that for at least two decades or so we had economic growth that was fueled (at least in the US) by consumer debt, which in turn was made possible by a housing bubble. Much of the political discussion today seems premised on the idea that once we are done with de-leveraging, households will return to spending and e...

Last year when there was a big debate about carry taxation, I came out in support of taxing carry as income (even though that will clearly mean a much higher tax bill for me personally). With the budget battle in Washington reaching ever new heights this issue is coming back in full force. I missed Nic Kristof’s column on this last week. I am completely in agreement until he gets to the point about taxing founders:One important proposal has to do with founder’s stock, the shares people own in...

Last year when there was a big debate about carry taxation, I came out in support of taxing carry as income (even though that will clearly mean a much higher tax bill for me personally). With the budget battle in Washington reaching ever new heights this issue is coming back in full force. I missed Nic Kristof’s column on this last week. I am completely in agreement until he gets to the point about taxing founders:One important proposal has to do with founder’s stock, the shares people own in...

It’s too soon to know how long Germany’s current apparent economic strength will last or if it is even entirely for real. Nonetheless, there is one interesting aspect of German employment policy that is worth considering because it appears to be working. Germany has the concept of “Kurzarbeit,” which literally translated means “Shortwork." It is a program that permits companies to keep employees partially employed with the government funding some (but not all) the balance to their most recent...

It’s too soon to know how long Germany’s current apparent economic strength will last or if it is even entirely for real. Nonetheless, there is one interesting aspect of German employment policy that is worth considering because it appears to be working. Germany has the concept of “Kurzarbeit,” which literally translated means “Shortwork." It is a program that permits companies to keep employees partially employed with the government funding some (but not all) the balance to their most recent...

I have written previously about unemployment and structural change in the economy, arguing that we are facing a particularly bad outlook for employment. The New York Times on Saturday had a good article on this subject that combined some chilling statistics with a couple of stories of individuals suffering the consequences. Probably the most important chart from the article is this: The dramatic growth in long-term unemployment is the surest indicator of structural change. To the extent that ...

I have written previously about unemployment and structural change in the economy, arguing that we are facing a particularly bad outlook for employment. The New York Times on Saturday had a good article on this subject that combined some chilling statistics with a couple of stories of individuals suffering the consequences. Probably the most important chart from the article is this: The dramatic growth in long-term unemployment is the surest indicator of structural change. To the extent that ...