Monday, March 7, 2016

Bill Mitchell and Pavlina Tcherneva on US employment

The "good" employment report turns out on examination to be not so good for all.  Another case of what's good for America is not necessarily good for all Americans. Distributional effects are tilted toward the top when labor bargaining power is suppressed, increasing owner and manager share, and favoring employees with high "human capital." Trickle down has quit working, if it ever did. And workers are now showing their anger politically.
As I have shown before, despite the employment growth over the last year, there is a bias towards jobs at the lower end of the US pay distribution (see blog – US jobs recovery biased towards low-pay jobs. The US Federal Reserve Bank’s – Labor Market Conditions Index (LMCI) – changed by 0.4 index points (down from three consecutive months where the average change was 2.7). This signals a weakening situation. I also updated my gross flows database today. The transition probabilities that I derived to February 2016 suggest that that while there has been improvement in the US labour market in the last year, in recent months that improvement is slowing.
Bill Mitchell – billy blog
US labour market weaker now
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tcherneva on the Jobs Numbers
Multiplier Effect


Dan Lynch said...

Great data by Bill, consistent with Mosler's perspective that the economy is decelerating.

The only question remaining is whether it will fall off a cliff or whether we merely continue to muddle through a "lost decade" or three.

Matt Franko said...


verb; (of a vehicle, machine, or process) reduce speed; slow down.