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The U.S. Labor Market Isn’t All That Healthy
- austincheney 7y ago> The gig economy was supposed to create lots of well-paying, independent jobs; Instead it has created companies that vacuum investment cash with no hope of profit and an army of depreciated labor. The economy would be better off if investors saw a return on their investment and if 20% of the gig labor force were suddenly unemployed provided that the freed labor wages are redirected to the remaining 80%.
- mdorazio 7y agoI'm trying to figure out why the author thinks the gig economy was supposed to create good jobs. It was supposed to create ways for people with free time to earn a side income at around minimum wage, but with more flexibility. The phenomenon of gig jobs getting turned into full time occupations points to how bad the rest of the labor market is for many people.
- daveslash 7y agoI'm not sure that it was ever explicitly stated that it was supposed to create jobs, and I never expected or claimed that it would. That said, what I'd like to add is this: a few years after the recession people who were still feeling the employment effects were certainly looking towards the growing gig economy with high hopes that it would create jobs for them. I don't have hard supporting evidence; that position anecdotal and based off conversations with people at that time. I also think that (depending on what sources you read) many journalists capitalized on this to talk up the hype.
- mdorazio 7y agoThanks for the response. 100% agree that when gig jobs started picking up, a lot of people were very hopeful about it, especially journalists. But I think a lot of the hope was only on the naive underemployed person side, not on the gig employer side, where the business models can only work with extremely cheap labor (if they work at all).
- sokoloff 7y agoOr perhaps it points in part to how many people value maximizing freedom over maximizing dollars of income. I talk to most every Lyft and Uber driver; I'd say most of them have a good idea of how much they're making (taking expenses into account) and probably 25% or more specifically enjoy the freedom over the money angle. (On the other side, that's about the same proportion who wish they could find a "good" full time job but are driving in the meantime to make ends meet.)
- wefarrell 7y agoThe gig economy isn't causing companies to be unprofitable. Investors have made it clear that they care more about growth than immediate returns. As a result companies delay making money. This is unrelated to the gig economy.
- thorwasdfasdf 7y agoFirst of all the U1 unemployment numbers are bogus. Look at the U6 numbers if you want a better picture of the truth. those show unemployment at 7-8%. Anecdotally, amongst my MBA friends, their unemployment level collectively seems to be about 30%. If you look at where all the jobs are, it seems to be they're all in low cost, low skill areas: waiting tables, dishwasher, etc.
- fanzhang 7y agohttps://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE Looks like we're at nearly an all-time low for the last 25 years as well, no?
- thorwasdfasdf 7y agoYou're right. But, wages haven't improved in the last 40 years for the average person, especially if you compare it to a basket of goods containing the essentials: housing, transportation, medical insurance and education.
- akhilcacharya 7y agoThis feels like a goalpost move to me
- icebraining 7y agoThat basket hasn't stayed still, though. Houses are bigger, cars are better, medical procedures are more effective, etc. How much would I have to pay you to convince you to use the average 1979 versions of all of those?
- maxerickson 7y agoMost people probably already live in places that are older than 40 years. And there's no automatic reason that doctors and manufacturers should have captured the increased value of their procedures and products.
- taiwanboy 7y agoI think it’s quite telling about the bias of hacker news users that this posting is alive and well on top of the first page, whereas a posting about US having the longest economic expansion in history, that was on the front page a few hours ago, was flagged and now gone within minutes of reaching top 10
- Stryder 7y agoWhat does that tell us? That HN trends pessimistic? That the HN audience is under-employed? Or something else?
- bmmayer1 7y agoI may be reading in between the lines but I believe OP's point is that HN leans more liberal which in today's political climate means more receptive of negative economic news (thus necessitating more intervention / change of government control) rather than positive economic news. But again this could be way off base.
- taiwanboy 7y agoDing ding :) Almost....anti-America if you will.
- Lendal 7y agoIs it more "pro-American" then to cover up negative indicators? People consume weather reports to know if it's going to rain. People consume traffic reports to see where the accidents are. People consume news for the negative indicators. That's not anti-American. That's human.
- taiwanboy 7y agoIn the ideal world, both posts would be on the front page. No echo chamber. Being able to hold opposing thoughts in ones head. Etc etc
- castlecrasher2 7y agoAfter the list of "what a healthy worker economy looks like" bullet points I expected some data to show these aren't the case but was disappointed to not find them. As is the case with many articles like this, I can only assume that making the case with words alone means the data does not support their conclusion.
- LarryDarrell 7y ago>"The shift to lower wage jobs for entire groups of workers is similarly problematic. Working full time while earning much less than in the past has profound ramifications. Entire industries have been disrupted, and often employees find taking a new job in a different sectors leads to near-entry-level pay -- equivalent to a 30, 40, even 50% salary cut. These folks may be working full time but they clearly are underemployed relative to their experience, skills and past work. This is not captured in economic data." The US is uniquely unable to cope with this outcome. Health Insurance is tied to employment. Education is costly. Our new mythology of Bootstraps instead of Social Guarantees. I don't see a new robust and dynamic economy coming to the rescue. For those of us currently doing well, this ought to be worrying.
- draw_down 7y agoI suppose, but perhaps more worrying to those of us not currently doing well.
- zaroth 7y agoIf a significant number of people were working now at 30-40-50% reduced wages, then wouldn’t that show up as a decrease in median household income? Real median household income is at an all time high, up 13% from 2012-2017.
- ssivark 7y agoIsn't this the quantity that has barely risen since 1970 or so (till ~2012), while productivity has multiplied manifold? https://en.m.wikipedia.org/wiki/Middle-class_squeeze#/media/File%3AProductivity_and_Real_Median_Family_Income_Growth_1947-2009.png https://en.m.wikipedia.org/wiki/Middle-class_squeeze#/media/... Further, the median can easily mask such changes as underemployment if it happens in much less than 50% of households, if the "middle class" previously had a broad base. Basically, the middle of the histogram would continue to look pretty flat (same median income for the "middle class") while the width of the flat region would shrink (shrinking middle class).
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- icebraining 7y ago> The gig economy was supposed to create lots of well-paying, independent jobs; I hate this kind of revisionism. The gig economy was never some sort of political plan that promised anything. It was just the name given to the increasingly common work model. In fact, "creating jobs" was pretty much the opposite of the gig economy.
- CodeMage 7y agoI don't think it's revisionism. I think it's an accurate description of the hype that surrounded the gig economy. That's what everyone used to parrot in defense of borderline illegal "disruption" by Uber and such. To quote Ronald Wright, "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." The gig economy is just a new way of exploiting that mindset.
- icebraining 7y agoI don't agree. Go read the news articles from 2009-2011. The "gig economy" was almost always quite descriptive, about the class of precarious workers forced by the recession to take up piece-meal worker. Only a few CEOs and sycophants waxed poetically about it, and even they stressed that it was mostly a way to make extra cash, not a job replacement.
- jressey 7y agoThe quotation gives "The Gig Economy" active voice. The author is saying those who enacted the economic model had the intention of creating those well paying jobs. They obviously never had any intention like that. That statement is revisionist.
- basch 7y agoThe American Dream promised = the american dream was a shared belief and mindset. Its not so much saying the gig economy was an actor with its own agency, there is an implication that the gig economy was a shared perspective of hope.
- dcolkitt 7y agoMale labor force participation has been steadily dropping since 1950. This was masked by the entry of women into the labor force between 1950 and 1990. But that process has been saturated for thirty years, whereas male participation keeps failing. That means that absent a major shift, the overall participation rate will continue to decline. The point is this is a half century trend, much too long to have anything to do with the business cycle. Yes labor force participation today is much lower than the expansions of yesteryear, but that doesn't tell us anything particular about this cycle. Almost assuredly 10-20 years from today labor force participation will be even lower than it is today, even at the peak of the next expansion. [1] https://fred.stlouisfed.org/series/LNS11300001 https://fred.stlouisfed.org/series/LNS11300001 [2] https://fred.stlouisfed.org/series/LNS11300002 https://fred.stlouisfed.org/series/LNS11300002
- shoguning 7y agoAs far as I can tell, students are not counted as in the labor force. Therefore, as more people pursue advanced degrees and other training later in life, labor force participation drops. Is this a bad thing? Hard to say.
- rayiner 7y agoIt’s better to look at prime age participation rate (25-54): https://www.bls.gov/emp/tables/civilian-labor-force-participation-rate.htm https://www.bls.gov/emp/tables/civilian-labor-force-particip.... Among men it’s down from 91.8% to 88.5% since 1996.
- Balgair 7y agoThat's a very interesting chart to look at! Thank you. One thing to look at is the projected rates in 2026. Non-hispanic white males are projected to be at 64.5 percent in the labor participation rate. This is in part due to the aging of the Baby boomers out of the work force. Still, that means that 1 of 3 non-hispanic white males will not be working and I don't see any reason for the trend to change. Also, the maximum outflows for Social Security are expected to be in ~2030 [0]. The presidential election cycles are 2020, 2024, 2028, and 2032. Lastly, the projected temperature of the Earth is expected to be ~0.3 degrees C higher in 2030 than it is today. For reference in terms of the possible effects of climate changes on human politics and government, CrashCourse recently did a good episode on the 17th Centrury Crisis where global temperatures fell ~0.5 degrees C [1,2]. TLDW: things were really bad. [0] https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1.html https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1.html [1] https://www.youtube.com/watch?v=cmKHYpC_jVs https://www.youtube.com/watch?v=cmKHYpC_jVs [2] https://en.wikipedia.org/wiki/The_General_Crisis https://en.wikipedia.org/wiki/The_General_Crisis
- jazzyk 7y agoThe only statistics which needs to be looked at is here: Bureau of Labor Statistics: Civilian labor force participation rate https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 Let the data speak for itself.
- larkost 7y agoA complicating factor not addressed in that graph is the aging of the U.S. population. I don't have great numbers immediately available, but it looks like over that same period of 10 years the population over 65 has grown from about 40million to 50 million. Those people are still considered in that graph as not participating.
- jazzyk 7y agoNope - the statistics only covers working age (18-67)
- cabaalis 7y agoI wouldn't think it's the only statistic that needs to be looked at. If it does any "speaking for itself" then it's raising its own question: "Why is that number declining over the past few decades?" That requires additional data to answer.
- supernova87a 7y agoWell, I have long had misgivings about policymakers focusing on single stats as their optimization function. "Employment" means a lot of things, and a government focused on that simplistic number will probably not produce long term what you want. And we have not incentivized our policymakers / government to do anything but pay attention to that single number. As soon as a politician can claim # of jobs increased, it's as if that alone is great. What about: - the quality of the job - the pay of the job - the sustainability of the job / industry - where that work takes us as a country strategically? So here you have people being told that jobs are being created left and right. But scratch even a little bit and you find that they're not very good jobs. Or they're jobs that are strategically not going to help us in the long run.
- pattisapu 7y agoInteresting facts cited in the academic paper [1] linked in the article: - Black Americans report significantly more optimism as to their careers and the economy than white Americans; Hispanics polled report something in between those groups. - Poor Americans score lower than their counterparts in Latin America. [1] http://www.dartmouth.edu/~blnchflr/papers/jelit%20paper.pdf http://www.dartmouth.edu/~blnchflr/papers/jelit%20paper.pdf
- usbseeker 7y agoIt was only the marketing plan of a few companies that stood to profit from it.