Saturday, June 2, 2012

Not All the Employment News is Bad

The most recent job numbers was disappointing and growth remains anemic. However, there is some good news in the economy, especially for the Midwest. A report on the resurgence of American manufacturing shows that jobs in manufacturing have been growing. The report also mentions some of the top jobs in terms of new hiring and a likely replacement rate for the decade.  Exports tend to be fueling much of the increase.  Tyler Cowen has a piece in The American Interest in which he discusses the implications of an export-oreiented America.  Until recently, the U.S. has been the leading exporter in the world. We often forget that for two reasons--(1) we often ran trade deficits, i.e., we exported a lot but imported more, and (2) exports are not large relative to GDP. But manufacturing has also changed. The new hires have to be more skilled some robotics do most of the assembly work.  The new hires have to be skilled to work with the equipment.  Manufacturing output is increasing much faster than manufacturing employment. This trend is unlikely to change.

In the U.S. in recent decades, the gap between earnings of college graduates and high school graduates as increased.  America is increasingly a country specializing in human capital and humans working with computer-based capital. But college degrees are not needed for all good jobs.  Instead, skills as machinists, welders, and similar trades can provide good jobs as well. Skills are needed in today's marketplace. One question is: Does our education system provide learning opportunities for skills as well as for college preparation?

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