1. A Snapshot of the US Labor Market A few things to think about…and (I hope) a lot of Q&A
Neal Rappaport, PhD in Economics
Visiting Professor of Economics
Colorado College
CCEE 8 Mar14

2. Where do we get the data?
US Department of Labor, Bureau of Labor Statistics
Types of Data
Unemployment rate / Jobs / Earnings
Monthly, yearly
By Category
Gender, Race, Ethnicity, Veterans’ Status, et cetera
By Educational Achievement
New unemployment / jobs data comes out first Friday of each month at 8:30 Eastern Time
Understanding definitions
CCEE 8 Mar14

3. What are the returns from education?
Private and Social Benefits
What is the difference?
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4. Source: Freakonomics Blog, 8 July 2013
According to a report released this week by the Organization for Economic Cooperation and Development, across the developed world the average person who has graduated from college (either two-year or four-year) and has any earnings makes about 57 percent more than a counterpart with no more than a high school education,” writes Rampell. “In the United States, the comparable earnings premium is 77 percent.”  
Despite the value of a college degree in the U.S., college graduation rates in the U.S. are increasing at a much slower pace than in other rich countries.  And, as Rampell points out, it’s not just individuals in the U.S. that benefit from a college degree: “[T]he average return to taxpayers [of tertiary education for the average man] is $230,722 in the United States, versus less than half that, $104,737, across the developed world.” 
Source: Freakonomics Blog, 8 July 2013
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5. But Educational Achievement is Tapering Off
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6. CCEE 8 Mar 14

7. Some Good News…Some Not So Good…
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8. Some Good News…Some Not So Good…
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9. If you drop out???
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10. Manufacturing--Traditional Route to Middle-Class Jobs for HS Dropouts and Graduates
Historically, manufacturing jobs were the path to the middle class for HS dropouts and graduates
E.g. Immigrants, African-American migrants from South to North
CCEE 8 Mar14

11. Are Manufacturing Jobs Making a Comeback—Fact or Fiction?
“They're closing down the textile mill across the railroad tracks Foreman says these jobs are going boys and they ain't coming back to your hometown” – Bruce Springsteen 1984
“I want to give incentives to companies that are investing in you, the American people, to create American jobs making American goods that we're selling around the world, stamped with three proud words: Made in America." --President Obama, 17 July 2012
CCEE 8 Mar14

12. Are Manufacturing Jobs Making a Comeback—Fact or Fiction?
Some fact and some fiction but US is not changing from a service economy to a manufacturing economy
Lost ~ 6,000,000 manufacturing jobs— ; re-gained ~ 600,000 since 2010
Manufacturing peaked as share of US economy in 1953 (28% and 33% of jobs)…now 12% (and 10% of jobs)...but real GDP rose from $2.6 trillion to $15.5 trillion over that period…
CCEE 8 Mar14

13. Are Manufacturing Jobs Making a Comeback—Fact or Fiction?
Evolution of the economy and labor market is natural and inevitable
Not all service jobs are “bad” and not all manufacturing jobs are “good”
We are not becoming a nation of “burger flippers” and “insurance salesmen” but there is a lot of good in flipping burgers and selling insurance—if that is what the market demands…
CCEE 8 Mar14

14. Obamacare and the Labor Market
Hyperbole dominates…
"Hardworking American families are struggling and their life has become harder and harder and harder. And madam president Obamacare is the biggest job killer in this country. The American people want to stop this madness and so do I.“– Ted Cruz, September 2013 (and, I am sure, many other times)
The US economy has added private sector jobs every month since October 2010
The likely benefits of Obamacare for small businesses are enormous—James Surowiecki, The New Yorker Magazine, October 2013
Reality…
"There is little evidence … Health Care Reform has (sic) had a significant impact on the job market," said Mark Zandi, chief economist of Moody's Analytics, September 2013
CCEE 8 Mar14

15. Obamacare and the Labor Market (cont’d)
Structural Changes in the Labor Market make analysis difficult
Labor Force Participation Rate Falling
Retiring Baby Boomers? (Demographics)
Discouraged Workers? (Economics)?
Obamacare (Legislation and Policy)?
CBO estimate: 2.3 fewer full-time workers by
2023, 4 Feb 14 report
“choose not to work” not lost jobs
(as cited on WSJ.com, 4 Feb 14)
CCEE 8 Mar14

16. Obamacare and the Labor Market (cont’d)
New report stokes debate on Obamacare, jobs
Nonpartisan congressional analysts say people will choose to work less in the coming years because of the new incentives from the health care law
Report fuels Obamacare debate with estimates of job loss
LOTS OF POLITICS and LOTS OF SHOUTING and SOME ECONOMICS
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17. Obamacare and the Labor Market
My view:
We need to separate health care from employment…an historical accident
If Obamacare severs the link between health care and employment, then it will provide long-term benefits to the economy and labor market
If not, then it will likely not achieve its stated goals of expanding health care access while containing costs
Some progress of cost containment but too early to declare
victory
CCEE 8 Mar14

18. International Comparison of Spending on Health, 1980–2007
Average spending on health per capita ($US PPP)
Total expenditures on health as percent of GDP
16%
$7,290 8%
$2,454
Note: $US PPP = purchasing power parity.
Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

19. Overall Ranking Country Rankings 1.00–2.33 2.34–4.66 4.67–7.00 AUS CAN
AUS
CAN
GER
NETH NZ UK US
OVERALL RANKING (2010) 3 6 4 1 5 2 7
Quality Care
Effective Care
Safe Care
Coordinated Care
Patient-Centered Care
Access
6.5
Cost-Related Problem
3.5
Timeliness of Care
Efficiency
Equity
Long, Healthy, Productive Lives
Health Expenditures/Capita, 2007
$3,357
$3,895
$3,588
$3,837*
$2,454
$2,992
$7,290
Note: * Estimate. Expenditures shown in $US PPP (purchasing power parity).
Source: Calculated by The Commonwealth Fund based on 2007 International Health Policy Survey; 2008 International Health Policy Survey of Sicker Adults; 2009 International Health Policy Survey of Primary Care Physicians; Commonwealth Fund Commission on a High Performance Health System National Scorecard; and Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

20. Conclusions
What we see today is an American economy that has boomed because of policies and developments of the 1950s and '60s: the interstate-highway system, massive funding for science and technology, a public-education system that was the envy of the world and generous immigration policies. Fareed Zakaria, 2011
Jobs are central to the American Dream. Nancy Pelosi, 2012
Education is the passport to the future, for tomorrow belongs to those who prepare for it today. Malcolm X, 1964
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21. Conclusions
One More Thing… (NY Times 12 Feb 14)
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22. A task… Please form into groups and consider the following:
Given the strong connection between jobs and education in the US, what changes (if any) do you think American education should pursue to enable the maximum number of young people to enjoy opportunity, satisfaction and financial security in the job markets of the future?
Please discuss for about 5 minutes.
CCEE 8 Mar 14

23. Related task
A remark by President Obama at his latest State of the Union Address: “But I promise you, folks can make a lot more, potentially, with skilled manufacturing or the trades than they might with an art history degree. Now, nothing wrong with an art history degree - I love art history. So I don't want to get a bunch of s from everybody.“ Should we encourage our youth to pursue practical educations and discourage them from the liberal arts?
CCEE 8 Mar 14