US Policy Changes Vol.2 (Employment/Economy Vol.1)

Here are two articles on employment. Excerpts are on our own.

Two top economists spar on Obama’s jobs record (5/12/2016) | @steveliesman @CNBC
…two former presidential economic advisors — one Democrat, one Republican — to answer a simple question, “Is the jobs market back? …‏

@Alan_Krueger (@princetonecon): … By most measures — including the unemployment rate, average work week, real average hourly earnings — the labor market is performing about where it was during the last recovery. The unemployment rate is slightly below where it was in the average month in the last business cycle expansion (2001-07). … The 2.5 percent rise in nominal hourly wages in the last year suggests that the labor market is getting close to full employment.
… but the reason for at least half of the decline is simply demographics and more baby boomers reaching retirement age. In addition, the labor force participation rate fell in the last recovery, so forces were putting downward pressure on labor force participation before the Great Recession. And the labor force participation rate and employment-to-population rate of men were both on a downward trajectory since the early 1950s…
Problems of sluggish median wage growth and rising inequality, which have plagued the job market since the early 1980s…
… the passage of Dodd-Frank Wall Street Reform Act and more vigilant financial regulatory enforcement is likely to reduce the odds of another financial crisis in the near term.

Ed Lazear (@StanfordBiz):… although we have made significant progress, the labor market has not yet recovered.
… By any measure, the labor market is in much better shape than it was six years ago. …
… Not only is 5 percent equal to the average during the 2000-07 period, but it is also close to what might be the typical economist’s estimate of the unemployment rate at full potential output. …
… Most labor economists prefer it to all other indicators because it cuts through the issue of discouraged workers and those who are slow to enter the labor force. The employment rate peaked at almost 63.5 percent in late 2006 and early 2007. It fell to a low of 58.2 percent in mid-2011 and is now back up to about 60 percent. Part of the difference between the previous peak and the current rate can be explained by demographics. …
… as older workers retire, the demand for the prime-age workers’ labor rises, which should induce more of them to work. The opposite has occurred for prime-age workers. Their employment rates are still substantially below the prerecession peak and even the early 2000s recession trough. …
… job creation… slightly over 200,000 per month… too fast to be consistent with full recovery. When we are in recovery equilibrium, job growth should just keep up with population growth. To keep pace with a growing population, about 140,000 per month are required. …we are still gaining jobs on net, which means we are still recovering, not fully recovered. … When the labor market is improving rather than stable, it is not fully back to normal.
… The number of hires far outstrips net job creation because hires and separations tend to move together. … late 2006… 4 percent per month (amazingly high). Today, that rate is 3.7 percent. But even this may overstate the recovery because the hiring rate looks at hires relative to those employed, not relative to the working age population. If labor-force participation and employment are too low for some reason, the hiring rate might look good…
…the number of hires relative to the working-age population. It peaked at 2.4 percent in late 2006 and now stands at 2.1 percent. …
That wages have not grown is no surprise. A necessary condition for wage growth in the U.S. has been productivity growth. …the weak recovery is best explained by low investment. … Increased taxes on capital, additional regulation, government suits and fines against companies especially in the financial sector have not encouraged capital formation. … I am not confident that Dodd-Frank has done much to make the economy more secure. Instead, I believe it treated the symptom rather than the cause.

Ed Lazear: This is the real unemployment rate (11/6/2015) | @Wonkblog
…wages haven’t been growing. The general sense is that the labor market is far from tight, and economic growth is weak. …
The other measure, which is generally preferred by many who study labor markets, is the employment rate, which is defined as the proportion of the working-age population (that is, 16 and above) that has a job. …
… An older population means that more people are retired, and more retired people yields a lower employment rate because a smaller fraction of the population is typical working age. …
To determine whether the measured unemployment or measured employment rate is too low… “population hiring rate,”…the ratio of monthly hires… to the population over 16 years of age. …
…demographics play a role in legitimately reducing the proportion of the population that would be expected to work. …
Using models based on pre-recovery data, it is possible to estimate what unemployment and employment rates would be… the official unemployment rate was 5.1 percent. But…the unemployment rate should be thought of as 6.3 percent. …
…the peak pre-recession employment rate was 63.4 percent. Correcting for hiring and demographics makes September’s rate of 59.2 equivalent to a pre-2009 rate of 61.4 percent… This amounts to about 4.8 million jobs. …
…conditions that are consistent with an unemployment well above 6 percent…