In her rather wide-ranging discussion of the labor market at Jackson Hole, Fed chief Janet Yellen was open to the possibility that some structural forces were at work. She was also cognizant that the modern economy simply does not need as many full time workers as it has in the past. Nevertheless, Yellen concluded, however, that there was still a cyclical component that could be addressed supportive to monetary policy.
There are two dimensions to the issue. The first is the number of people in the labor market, broadly understood. The second is the number of full time positions the economy is creating at a given level of technology and organization. There is no reason that the two dimensions have to move in tandem.
Consider that early industrial workers used to labor 10-12 hour days six days a week. A larger share of the population is working and five-day work weeks and less than eight hours a day is the norm. Many of our parents, grandparents and great-grandparents were engaged in a fight to reduce the work week. This struggle has largely been abandoned now, though maybe it needs to be picked up again. Part of the problem, of course, is labor is less organized now than it was in the past.
This broad stroke description does not negate our earlier discussion of anytime, anywhere workers. Modern technology has increased the C3--command, control and communication capacity, allowing more flexibility for some jobs, in terms of location and time. The point here is that maybe work itself needs to be re-organized, with the goal of expanding leisure time for more people.
Increased leisure time can lead to greater consumption, not only of goods but services. Consider the impressive growth of adult education and MOOC (massive open online courses) that does not lead to a degree. There has been an increase in the hospitality sector. The shared, or cooperative economy, (yes, including things like this blog) are also part of the transformation that is taking place.
This Great Graphic was posted by Christopher Ingraham on the Washington Post's Wonkblog. It shows the results of a survey conducted by PayScale. It shows the percentage of people by undergraduate majors that identified themselves as underemployed. Underemployed refers to the feeling that one's job did not put their education or experience to work as much as they should.
What is striking is that it is not just liberal arts majors who complain about being underemployed. Some ostensibly more practical majors, like criminal justice and business management graduates, identify themselves as underemployed in greater numbers than liberal arts or general studies. PayScale survey found 43% of the respondents felt underemployed and poor pay was a leading factor.
There is another consideration here. PayScale found that nine of the ten most underemployed majors were dominated by women. Underemployment may be, at least partly, a function of the gender wage gap.
Ingraham also presented the results of last year's survey by Georgetown University Center on Education and Workforce that was summarized in the Daily Beast by Christina Hoff Sommers. That survey found that the least underemployed majors were dominated by men. And men overwhelmingly dominated the highest paid majors:
1. Petroleum Engineering: 87% male
2. Pharmacy Pharmaceutical Sciences and Administration: 48% male
3. Mathematics and Computer Science: 67% male
4. Aerospace Engineering: 88% male
5. Chemical Engineering: 72% male
6. Electrical Engineering: 89% male
7. Naval Architecture and Marine Engineering: 97% male
8. Mechanical Engineering: 90% male
9. Metallurgical Engineering: 83% male
10. Mining and Mineral Engineering: 90% male
Among the ten least paid majors, women dominate nine.
1. Counseling Psychology: 74% female
2. Early Childhood Education: 97% female
3. Theology and Religious Vocations: 34% female
4. Human Services and Community Organization: 81% female
5. Social Work: 88% female
6. Drama and Theater Arts: 60% female
7. Studio Arts: 66% female
8. Communication Disorders Sciences and Services: 94% female
9. Visual and Performing Arts: 77% female
10. Health and Medical Preparatory Programs: 55% female
Sommers argued that the gender wage gap does not really exist. She argues that it is a question of life choices. In particular she states, "Much of the wage gap can be explained away by simply taking account of college majors." We suspect the situation is more complicated and the causal links are not clear. Could women be encouraged to have certain majors, formally or informally? Could work that women do not be as valued as work that men do?
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