Brad DeLong's Semi-Daily Journal (2004)

Of course, this is not the same as comparing earnings in the destroyed jobs with earnings in created jobs.

But would we expect a displaced worker to be making more in a second choice job? What are the sizes of the pie slices in a healthy job market?

thanks... that helps us know more! What are the distributions in the swing states?

cb is kind of vague what are "destroyed" versus "created" jobs. Does he mean job in industries that are growing versus those that are shrinking in employment? But I think his general point is correct. But this more evidence, and things do have to add up, so it increses the probability that a larger than normal fraction of the new job people take pays less. I guess someone who has time to sort through the BLS tables could relate the numbers to growing and shrinking industries.

http://www.bls.gov/news.release/disp.toc.htm

At
http://www.bls.gov/cps/cps94dw.htm

Displaced workers are defined as:

"Data refer to persons who had 3 or more years of tenure on a job they had lost or left between January 1991 and December 1993 because of plant or company closings or moves, insufficient work, or the abolishment of their positions or shifts."

I don't think there is any reason to think that these people would make more or less money. It depends on the overall macro environment, relative rates of job destruction and creation, and reasons for the shifts.

An aged buggy whip weaver, we would expect to make less at the new job, I suppose. A underemployed engineer at an old-economy job might have made more at a new job when laid off right before the Silicon Valley boom took off.

Does the BLS release statistics for workers displaced because their plant or company closed or moved, separate from those displaced because there was insufficient work for them to do, or their position or shift was abolished ? At least soem of the second set are laid off partly because they were undeserable. This is a bad signal about them personally which (on average) hurts them personally (see Layoffs and Lemons by Gibbons and Katz for proof).

More generally displaced workers should be hurt because of loss of seniority (and maybe firm or industry specific human capital). This is always true, so the data don't tell us about the shift good jobs to bad jobs now. One would need to look at the change in the cost of displacement.

I think you want

http://www.bls.gov/news.release/disp.t02.htm

total age >= 20 yrs
1. plant/company closure: 43%
2. insufficient work: 28%
3. position/shift abolished: 29%

I think that the is no basis to make assumptions about the first, lemons may be suspected in the second, and third is probably mixed and on average hard to judge.

As an executive recruiter of Director level and above professionals (HR, Finance,Accounting, etc.), I see a small portion of the big picture, but at least in the San Francisco Bay Area, I have met hundreds of displaced senior level professionals who have been unable to find work in their preferred field. Many if not most of them have been without work for over a year - they may show on a report as "self-employed" but they are not so by choice, and their incomes don't compare with their prior ones. Whenever I hear people comment on labor market statistics about unemployment, I think of this vast group of underemployed. I'm not sure anyone else does. Is anyone studying this?

Ned: The point has been made repeatedly in circles like this one, but it is good to have it confirmed by a professional who probably sees a larger picture than most, even if it is still anecdotal.

Studying it is probably tough; small efforts restricted to a small sample set may be viewed as anecdotal or selective, and even large-scale efforts would suffer from the problem that this subject is rife with subjectivism -- but it would presumably show that the employment world is not as apple pie as some would have us believe.

Thank you Ned.

Also, it seems the missing category would be

4. Job sent offshore.

jml, there are 160,000 less people working in it than 3 years ago. What would make you believe in these conditions that they would all go out and make more?

Sounds to me like what one would expect in a crappy job market. When job growth is less than population growth along with a host of other factors. One takes what one can get and hopes that someday the jobs picture will improve. Some folks will, however, remain permanently underemployed or permanently unemployed when that happens.

But would you also expect this in a good job market?

Suppose in a neutral market, workers in shrinking sectors (net job destruction) change jobs in two ways. Better workers quit and find higher paying jobs in sectors with net job creation. Worse workers tend to be laid off and accept lower paying jobs in sectors with net job creation. Surveying laid off workers turns up, lo and behold, most of thema re making less money than they used to make.

One way one might do a better test of the quality of the jobs would be to use the establishment level data a la Davis, et al. ... but I would believe the data will take a while to be available for this supposed change. And for what purpose...to prove jobs get crummier in a bad job market?

me: No, offshoring is covered by 1-3. By all of them combined. In that sense it is not a "missing" category.

Also 1-3 are at least largely objective criteria and can be determined on an individual basis. With offshoring and outsourcing it is more difficult -- "additional" jobs are created elsewhere some time before or after a layoff, and maybe cannot straightforwardly matched to the domestically eliminated jobs. If it happens within weeks or a few months, it is pretty clear what is going on, but what about more than a year? It becomes harder to make the case for related events. Also the job descriptions may not be the same, e.g. the offshored operation may cover only 50% of domestic job responsibilities, and "mysteriously" result in a 50% domestic cut. It would probably be difficult to make the case then as well.

Mind you, this is not meant to downplay your own experience you expressed in a previous thread. My point is that this category would provide only a hunch, not hard knowledge, and would not be useful as a policy tool as it is not very reliable (on the other hand, nobody can dispute a plant closure or position elimination). But it would probably be valuable as an "informative" category.

Carsten

Again, I fail to understand the stated optimism of the Federal Reserve. The suggestion is more rate increases are to come, but general growth is sluggish and the labor market in difficulty and inflation hard to spot beyond energy prices. Why slow growth?

Let me echo anne's constant refrain over the last year and a half or so: With the labor market so sluggish, where is the demand coming from that will drive the economy?

Unpaid family worker?

I hadn't heard of this before. I was a self-employed database consultant before the dot-com crash and took to caring full time for my elderly mother when business dried up. Was I reemployed as an unpaid family worker? Were we both UFWs for each other? When she passed away should I have collected unemployment? Just how many unpaid family workers are there in our employment statistics, Household vs Establishment? Do food and shelter qualify as income for an UFW? Does unpaid family work count towards Social Security?

Sounds like a scam to game the employment numbers to me.

Here is an item that is the first hard evidence, that I know of, that any kind that cash disbursements to middle and lower income classes are signficant factors in driving the above and below trend bumps in employment changes. Apparently these folks have a model for retail sales that includes things like child tax credit checks.

I know very little about this kind of forecasting, but it reinforces my idea that we will see good employment numbers mostly when the Bush admin is forced to, or the law says, you give some cash to regular folks. So I think with no more rebates coming, and the income tax refunds spent, we will see more numbers like June and July. Let's see what happens the next few months.

I heard on the radio this morning that the August employment numbers will be released a few hours before Bush's acceptance speech. Is that a slip up in the well oiled machine, or a high stakes move?

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=568&e=14&u=/nm/20040810/bs_nm/economy_retail_redbook_dc_1

Chain Store Sales Growth Slows
Tue Aug 10, 9:00 AM ET
NEW YORK (Reuters) - The absence of child tax credit checks hurt the pace of U.S. chain store sales growth in the first week of August, a report said on Tuesday.

*****
me: I was not saying that many unemployed workers could find situations that were better in the US today, I was spinning scenarios that tried to show that there would not be a general rule about the ultimate fate of displaced workers.