Good column by Bob Herbert in today’s NYT about the problem of youth unemployment in the US.
I have a niece who is a recent graduate from a very good (non-Ivy, not Berkeley) university who is working part-time in a Whole Foods kind of store. France has been experiencing this youth unemployment problem for years, and it’s a very serious problem. I saw a recent round-table discussion on CNN International with various US executives, the most talkative of whom was a financial genius named Fink, but Jack Welch was there, the current CEO of Pimco was there, the female head of Ogilvy and Mather was there. They were talking about the financial crisis and its aftermath. They were supposed to come up with ideas about how to get economic growth going again, but it was not a fertile plain for such ideas. One often hears that America should learn to make things again, but one rarely hears what it should make, apart from electric cars and their accompanying batteries and solar panels. A better traditional car is often mentioned also. What one also never hears discussed is the distinct possibility that there is simply an international overabundance of labor – there are too many people, too many to provide professional jobs for all the people with professional qualifications. I found this CNN round-table somewhat depressing. While the executives were not stupid, apart from one Republican neanderthal with a shaved head, they did not strike one as profound thinkers either. The guy from Pimco was not bad.
I want to give props to David Frum also. On a recent edition of bloggingheadstv, Frum more than once referred to the problem that the US would likely have absorbing the most recent cohort of 18-24 year-olds into its workforce. There are lots of people in this cohort, he says, who have very poor skills. I am inclined to believe both parts of the hypothesis, viz. that there are a lot of kids with low skill levels and that it will be difficult for them to find jobs. But Frum could have added the corollary discussed by Herbert in this column: it’s also a very difficult environment for skilled young people. In short, the US could be facing a very serious structural youth employment problem, comparable to the problem that France has had for years. And, if this is so, it’s not a problem of French overregulation of the labor market, although that is presumably a contributing factor.
It is disappointing that one rarely hears economists discussing things like this. Questions like this tend to devolve to sociologists and journalists.