I'm not sure that education is the big problem, but it's definitely up there. I think probably the financial climate leading to unemployment/underemployment is a bigger one, but significantly more difficult to fix.
Imagine a world where you can retrain yourself on the order of months, not years, and take on little or no debt to do it. How would that impact unemployment or underemployment?
When Obama stands in front of a bankrupt auto factory in Detroit and says, "We'll retool these factories and retrain these workers to produce wind turbines, solar panels, and electric cars!", how do we do it?
People are desperate to answer that question and services like bloc.io, Udacity, Coursera, Khan Academy, University Now, etc. are just our best first answers.
Education is more than a big problem: it's the root problem.
Caveat lector: I help run http://devbootcamp.com and the bloc.io guys work out of our offices 2-3 days per week.
>Imagine a world where you can retrain yourself on the order of months, not years, and take on little or no debt to do it. How would that impact unemployment or underemployment?
It would have very little effect on un- or underemployment, since un- and underemployment are driven by demand, not supply.
There is zero evidence that unemployment in the United States today is driven by a mismatch between skills-employers-want and skills-workers-have, for instance.
Paul Krugman discusses this in a few of his columns.
The Keynesians haven't been proven wrong on their claims that increased demand -> increased production. It's the part where increased production -> increased employment that they have been shown conclusively to be incorrect.
I feared that mentioning Krugman would bring out the Krugman-haters with their nonsense. Sadly, I was right to fear.
You know that the Fed statistics that you cite show that, for example, durable goods production is down 6% since 2007? Even though population has increased in that time. That is to say, the graphs support what I said and what Paul Krugman says, not the nonsense that you think you've learned from Fox News.
You are completely ignoring the point - if demand increases but producers don't need to hire people to produce more, employment does not increase. I.e., demand may be correlated with production, but production need not be correlated with employment.
If you looked at the fed stats I cited, they show precisely a lack of correlation between production and employment.
Nothing you have cited disputes this fundamental point. Krugman doesn't even try, he just declares victory and insults those who disagree.
Nonsense. Should I post the graphs again? The graphs clearly demonstrate increased production without a corresponding increase in employment. This is the "jobless recovery" that many columnists lament. Some graphs again:
According to Keynesians (e.g. Krugman), recessions are caused by labor not becoming cheap in response to exogenous shocks (due to sticky nominal wages). Do you disagree with this theory?
This is a kind of null hypothesis: that US companies, across all sectors, are permanently not hiring above the rate of replacing their current employees. All dynamic changes are because of fluctuation in supply; the only way companies will hire more in any sector is if increased supply drops wages enough that they can pick up more employees for the same money.
That is a pretty extreme claim which seems pretty easily testable; where has it been tested?
You seem confused. Perhaps I was not clear enough. Let me reiterate.
Companies hire people to make things or provide services if the company believes it can sell those products or services. If, for example, a company is making 100 widgets a day and selling only 50 widgets a day, the company will not hire new employees at any salary, even a low one, because it already has more widgets than it can sell. If a window-washing company has 6 window washers, and enough work to keep only 3 of them busy, it will not hire a 7th window washer, even at a low salary, because he'll just join the other 3 guys that are already sitting around the office doing nothing. In fact, if that state of affairs is projected to last for a while and laws don't prevent it, he'll fire 3 of the window-washers he already has. As soon as people start wanting window-washing and there is too much work for 6 window-washers, a 7th will be hired.
Unemployment is thus driven by demand for goods and services. The supply of workers is immaterial. Companies don't hire extra workers just because they're cheap.
The U.S. has high unemployment across all sectors. There are no sectors that are booming. Thus, retraining yourself doesn't have any immediately useful benefits during the current recession. ALL fields are slumping.
Your condescension is unwarranted and inappropriate.
You stated that unemployment is driven by demand. You also stated that there's no evidence unemployment is driven by a mismatch between the pattern of demanded skills vs. the pattern of present skills.
I am not arguing with you about these claims. I am just going on what you say to me. The combination of those claims LOGICALLY ENTAILS that unemployment, being driven by weak demand in every sector, and NOT just by weak demand for certain skills in specific sectors, MUST be driven by weak demand for labor overall, across sectors; in other words, every single sector does not need any more labor of any kind.
This is what you actually said. If you didn't mean it, then you should have said something else.
What I said... which is true... is that this is an extreme claim, and eminently testable. And you still haven't provided any test of it. Although you seem to expect me to believe it. So rather than linking to Krugman again... why don't you provide evidence for the extreme claims you are making?
By the way... I am a regular reader of Krugman's because I like a lot of what he says, so if you cannot be "clear enough" and cannot defend your extreme claims to a Krugman fan, then the problem isn't that you are being discriminated against on the basis of ideology. It is that you are making bold claims which have certain entailments, you are refusing to recognize these entailments and you are refusing to provide evidence to support the claims at the same time as you refuse to withdraw them.
>I am not arguing with you about these claims. I am just going on what you say to me. The combination of those claims LOGICALLY ENTAILS that unemployment, being driven by weak demand in every sector, and NOT just by weak demand for certain skills in specific sectors, MUST be driven by weak demand for labor overall, across sectors;
Does not entail this:
>in other words, every single sector does not need any more labor of any kind.
If there is weak demand for labor overall, then there will be a weak demand for labor, not zero demand. Additionally, labor does not follow normal supply and demand models, and if you're not aware of the evidence for this I'd suggest you read an economics textbook.
Your argument is similar to that of people saying that because North Dakota has low unemployment due to its energy boom, a massive energy boom would cure unemployment. But North Dakota's energy boom only has such a visible effect because of the state's small population; Pennsylvania has added a similar number of jobs and it has barely changed the unemployment rates, as the the state has a much larger overall population.
Likewise lack of skilled employees in, e.g. the technology sector does not necessarily indicate unemployment is caused by structural shifts in unemployment, unless the tech industry is looking for millions of new employees and can't find them.
Between December 2007 and October 2008 the unemployment rate doubled. It seems far more likely that the United States hasn't yet recovered from the financial crash rather than experiencing an unprecedented shift in its economy at exactly the same time.
Unemployment didn't slowly rise during the boom times, it spiked because of a financial crash and has been slowly declining since. Any claims of a structural shift require extraordinary evidence, and all you've provided are non-sequiturs.
Rather than mindlessly quoting Krugman's newspaper column, you should go learn the basics of Keynesian economics. Keynesian economics claims that companies don't hire workers because their real wages are too high (due to sticky nominal wages and insufficient inflation).
Since you seem to have an aversion to reading anyone besides Krugman, why not go read his textbook?
The US government can't sustainably provide a safety net that provides basic needs (whether this is because of finances or because of ideology is a debate I'm not getting into).
And getting rid of the free market is not an option for us either.
So if we are not going to let people starve in the snow every time the raw forces of economics kill a market or shift all production somewhere else, they should have some help to find new footing.
Education itself is not the problem. Education is good. Problem is in the fact that to prove education, we need degrees which means we need to come up with outrageous amount of tuition fee to pay. Why do we have an ever rising tuition fee ? Probably because colleges know they can get away with it due to funding/subsidies. Colleges also know that a degree is a major rquirement to even try and get a decent job these days that pays more than minimum wage (outliers are there of course). So it does not matter if they charge 100K for a degree.
but I think that lack of relevant education is the largest contributing factor to unemployment. for example, american manufacturing is actually doing great right now, the problem is that it's become more efficient and can do without labor workers so while the businesses flourish there are less people to employ.
In regards to relevant education, I think Amazon's career choice program is a good example of targeting the right industries.
From Jeff Bezos letter:
"We’re offering to pre-pay 95% of the cost of courses such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies, nursing, and many other fields.
The program is unusual. Unlike traditional tuition reimbursement programs, we exclusively fund education only in areas that are well-paying and in high demand according to sources like the U.S. Bureau of Labor Statistics, and we fund those areas regardless of whether those skills are relevant to a career at Amazon."
> I think that lack of relevant education is the largest contributing factor to unemployment.
I hear this often, but I am always left wondering what jobs will rise out of the woodwork if the condition became true?
It is easy to say lack of education is the problem because it is the common filter used when hiring, so it is highly visible, but one only needs to look to the software industry to see perfectly capable programmers struggling to find work in what is supposed to be a hot market with companies crying for help.
I believe it is far more complex, and may not relate to education at all.
