Half a million millenial men are missing from the labor market

[sea manup]

The fact is that in competitive industries, as people have pointed out, companies want to hire people with experience. The problem is that colleges and public education in general does a poor job of giving people the opportunity of having real, marketable work experience. So you have kids who have spent 4 years studying expecting those years to be the sacrifice necessary to get a good job when in reality they still need to sacrifice another 3-5 years working hard for less pay at a job to truly get started in an in demand industry.

If schools did a better job of training practical skills, teaching kids to understand how to sell their value and teaching financial literacy, this would be way less of an issue and people would be able to find better work contracts straight out of school. But then again, if people understood these things a lot of people would opt to not go to college so it might be in college's best interests to keep people ignorant about their subpar product.

 

[rexanglorum]

The fact is that in competitive industries, as people have pointed out, companies want to hire people with experience. The problem is that colleges and public education in general does a poor job of giving people the opportunity of having real, marketable work experience. So you have kids who have spent 4 years studying expecting those years to be the sacrifice necessary to get a good job when in reality they still need to sacrifice another 3-5 years working hard for less pay at a job to truly get started in an in demand industry.

If schools did a better job of training practical skills, teaching kids to understand how to sell their value and teaching financial literacy, this would be way less of an issue and people would be able to find better work contracts straight out of school. But then again, if people understood these things a lot of people would opt to not go to college so it might be in college's best interests to keep people ignorant about their subpar product.

40 years ago, new college graduates made more than new graduates make today (inflation adjusted). How do you explain that?

 

[RustyShackleford]

It is wild to me that dudes will call out everything under the sun for the current state of affairs in the labor market but will never call out corporations rent-seeking, market consolidation, the attacks on organized labor, weak labor laws, even weaker enforcement of the laws on the books depending the party holding the presidency, the fact we protect owners of capital above all else, the FED never try to get to full employment, and universities being underfunded partly to lower business taxes.

It is always a narrow focus on the believed failings of workers, and then educators.

 

[sea manup]

40 years ago, new college graduates made more than new graduates make today (inflation adjusted). How do you explain that?

Way more people are graduating college now than 40 years ago. More supply = lower prices. It’s Econ 101

 

[RustyShackleford]

Way more people are graduating college now than 40 years ago. More supply = lower prices. It’s Econ 101

This is funny on many levels. The fact he is saying to a dude with a Ph.D. in economics might be the funniest part.

 

[sea manup]

This is funny on so many levels. The fact he is saying to a dude with a Ph.D in economics might be the funniest part.

What about that statement is wrong?

 

[rexanglorum]

Way more people are graduating college now than 40 years ago. More supply = lower prices. It’s Econ 101

But Econ 201 says that a more skilled/more educated labor force will produce more and therefore earn more in wages. Perhaps your bare bones economic analysis is missing somethings.

Also, you said that college education, which is not explicitly vocational in nature, is inherently worthless to employers. How could supply and demand apply to something which you said has no value to begin with?

Edit: I don’t mean to pile on and I don’t like to mention my academic background because I don’t want to lecture from a place of authority, I want to try to ask good questions.

It’s cool that you’re trying to tell other users about the vagaries of the job market and to prepare them for the mental, emotional and physical demands that will be required simply to earn a wage that will place them at the ragged edge of the middle class. The fact that your advice is sound shows that our economy is not in good shape for most people.

 

[sea manup]

But Econ 201 says that a more skilled/more educated labor force will produce more and therefore earn more in wages. Perhaps your bare bones economic analysis is missing somethings.

Also, you said that college education, which is not explicitly vocational in nature, is inherently worthless to worthlessness to employers. How could supply and demand apply to something which you said has no value to begin with?

A more skilled/educated labor force will produce more, but depending on the supply of labor it doesn't mean the average price of labor will go up. The difference between now and 40 years ago is of course a more skilled labor force but also a drastic increase in labor force supply due to both more people attending and graduating college as well as globalization with highly skilled immigrants coming in the country as well as the option of outsourcing. All these factors contribute to the average cost of labor.

Apologies, worthless might have been a bit harsh, lets replace that with not worth that much. But just to set your facts straight, of course supply and demand can apply to something which has no value the result would be 0 demand.

 

[rexanglorum]

A more skilled/educated labor force will produce more, but depending on the supply of labor it doesn't mean the average price of labor will go up. The difference between now and 40 years ago is of course a more skilled labor force but also a drastic increase in labor force supply due to both more people attending and graduating college as well as globalization with highly skilled immigrants coming in the country as well as the option of outsourcing. All these factors contribute to the average cost of labor.

Apologies, worthless might have been a bit harsh, lets replace that with not worth that much. But just to set your facts straight, of course supply and demand can apply to something which has no value the result would be 0 demand.

Your are correct that as more and more workers obtain the in demand and therefore well paid skills, the supply of people who have those skills will increase and if demand stays the same, the pay for those skills will decrease.

That is why demanding that workers upgrade their skill set to chase the latest in demand skills is not a sound policy to address persist and wide spread low wages. Demanding that workers incur the full cost of educating themselves is then especially cruel.

 

[sea manup]

I don’t mean to pile on and I don’t like to mention my academic background because I don’t want to lecture from a place of authority, I want to try to ask good questions.

It’s cool that you’re trying to tell other users about the vagaries of the job market and to prepare them for the mental, emotional and physical demands that will be required simply to earn a wage that will place them at the ragged edge of the middle class. The fact that your advice is sound shows that our economy is not in good shape for most people.

It's all good, disagreements and arguments is what make NT fun

The topic is getting a foot into an industry. It is expected under any type of economy to have to grind away for a few years when initially entering an industry to build a skillset that you can leverage to get better jobs. Of course if after 3-5 years if you are going nowhere and there are people in your same position that are going somewhere then there is something you could be doing better.

 

[boris]

This is funny on many levels. The fact he is saying to a dude with a Ph.D. in economics might be the funniest part.

Holy ****, I somehow missed that rex has a Ph.D. in economics.

 

[SneakerProSr.]

It is wild to me that dudes will call out everything under the sun for the current state of affairs in the labor market but will never call out corporations rent-seeking, market consolidation, the attacks on organized labor, weak labor laws, even weaker enforcement of the laws on the books depending the party holding the presidency, the fact we protect owners of capital above all else, the FED never try to get to full employment, and universities being underfunded partly to lower business taxes.

It is always a narrow focus on the believed failings of workers, and then educators.

I've told this story in the political thread but I'm I'm middle management for a Fortune top 15 company.

They spent millions sending us to a week long training explaining the realities of the business and showing the economics.

After tax reform we cleared 2 billion. 2 Billion with a B just off of tax reform.

Fast forward 3 months and 22% of the work force is being offered severance packages and the comp structure has changed for 33% of the company to pay them less.

Rumor is 35% of the front line employees are being layed off after the new year.

Oh and open enrollment just started and they increased the cost of our health insurance.

But the stock price is higher than it's been in 3 years so I guess that's all that matters.

I don't know if this is happening everywhere but seeing this up close and personal with my company tells me those right wing economic talking points are bull****.

 

[sea manup]

Your are correct that as more and more workers obtain the in demand and therefore well paid skills, the supply of people who have those skills will increase and if demand stays the same, the pay for those skills will decrease.

That is why demanding that workers upgrade their skill set to chase the latest in demand skills is not a sound policy to address persist and wide spread low wages. Demanding that workers incur the full cost of educating themselves is then especially cruel.

Well it depends on the pathways for people to upgrade their skill set.

1. Learn on your on free time though online resources, the issue with this (dependent on industry) is that there is a lack of certification so it might be hard to prove your skill no matter how good you get. Learning on your own also might be hard for you to grow your network.

2. Learn from an institution, getting a degree is a standard/universal way of proving a certain level of confidence in your field. But this is by far the most expensive since there are not only substantial costs in terms of your time but also tuition as well. A great benefit of university is that you automatically have a peer group that is also entering the industry so if you network well in school it can be a huge benefit in the future.

3. Get a job, maybe even for less pay than you would elsewhere, where you are put in the best position to learn and build your network. IMO this is the best option since you are able to develop an employable skill set based on real experiences while getting some income to support your lifestyle. Since this also results in you not falling into a large pool of debt, it also enables people to take entrepreneurship risks that they otherwise would not be able to if they had to deal with monthly loan payments.

In option 3, its essentially a company paying for you to develop a skill set. But it is your responsibility to put yourself in a position and get a job that grants the best experience which you will then be able to leverage in the future for higher pay.

 

[RustyShackleford]

What about that statement is wrong?

I didn't laugh because your assertion about the law or supply and demand is wrong, I laughed because it is overly simplistic to use supply and demand to analyze something like that. In hindsight I should not have been condescending, my bad

Also for your analysis to be right, it would mean the macroeconomy has grown in that has not grown in that time. Maybe your analysis could work if the labor market was relatively the same size, but then again it would have to be structured the same as far as what jobs were available.

Alternatively, we know there is a wage premium for getting a college degree. And companies have been requiring college degrees more and more for entry-level positions for white collar jobs than they did 40 years. So we need to figure out what kind of shift is happening to the demand curve, does it affect the shift in supply, does it not.

You handwaved away many macroeconomic trends and events to claim the analysis could simply be done by supply-demand, and have seen you do the same with using perfect competition too. And I know that the story is just not that simple.

 

[ninjahood]

Way more people are graduating college now than 40 years ago. More supply = lower prices. It’s Econ 101

ding ding.

if everyone is superman, than no one is.

 

[ninjahood]

in reality, nothing is stopping anyone from levelin up, from crap minimum wage to about 90ish a year, you can guile you're way into a better paying job, understanding da "unfairness" of da world up front...its about from there past 6 figs thats its outta your hands and more has to do with da strings being pulled above you.

 

[RustyShackleford]

I've told this story in the political thread but I'm I'm middle management for a Fortune top 15 company.

They spent millions sending us to a week long training explaining the realities of the business and showing the economics.

After tax reform we cleared 2 billion. 2 Billion with a B just off of tax reform.

Fast forward 3 months and 22% of the work force is being offered severance packages and the comp structure has changed for 33% of the company to pay them less.

Rumor is 35% of the front line employees are being layed off after the new year.

Oh and open enrollment just started and they increased the cost of our health insurance.

But the stock price is higher than it's been in 3 years so I guess that's all that matters.

I don't know if this is happening everywhere but seeing this up close and personal with my company tells me those right wing economic talking points are bull****.

Corporate friendly supply-side economics as a guiding macroeconomic principle was never going to work in America because the underlying assumptions made about the America economy by supply-siders are plain and simply false.

But what has once looked an ill-advised course of action, should now be looked at as a downright scam.

On aggregate, if left to their own devices, executives with never make the life of their workers better, no matter the tax breaks, if market power is so titled in their favor and things like stock buybacks (and bonuses tied to stock prices) are allowed.

Again it is weird to me how people ignore the economic policies that lead to this state of affairs and just focus on how workers need to work even harder than the previous generation for even less economic security.

 

[boris]

I've told this story in the political thread but I'm I'm middle management for a Fortune top 15 company.

They spent millions sending us to a week long training explaining the realities of the business and showing the economics.

After tax reform we cleared 2 billion. 2 Billion with a B just off of tax reform.

Fast forward 3 months and 22% of the work force is being offered severance packages and the comp structure has changed for 33% of the company to pay them less.

Rumor is 35% of the front line employees are being layed off after the new year.

Oh and open enrollment just started and they increased the cost of our health insurance.

But the stock price is higher than it's been in 3 years so I guess that's all that matters.

I don't know if this is happening everywhere but seeing this up close and personal with my company tells me those right wing economic talking points are bull****.

I'm at a Fortune 500, and this is pretty similar to what I've been seeing.

 

[sea manup]

I didn't laugh because your assertion about the law or supply and demand is wrong, I laughed because it is overly simplistic to use supply and demand to analyze something like that.

Also for your analysis to be right, it would mean the macroeconomy has grown in that has not grown in that time. Maybe your analysis could work if the labor market was relatively the same size, but then again it would have to be structured the same as far as what jobs were available.

Alternatively, we know there is a wage premium for getting a college degree. And companies have been requiring college degrees more and more for entry-level positions for white collar jobs than they did 40 years. So we need to figure out what kind of shift is happening to the demand curve, does it affect the shift in supply, does it not.

You handwaved away many macroeconomic trends and events to claim the analysis could simply be done by supply-demand, and have seen you do the same with using perfect competition too. And I know that the story is just not that simple.

Of course anything the size of the United States economy is going to be more complicated than can be explained in a NT post. Of course everything that is said in here is going to be over simplifying.

The US economy has clearly grown since 40 years ago. That doesn't mean the wage stagnation for entry level jobs is not (largely) due to an increase in supply of the labor force. For example (these are made hypothetical numbers), if in 40 years the economy increases by 100% and the labor force increases by 200% then comparatively the supply of labor has increased despite the macroeconomy also growing by a large factor.

Companies requiring college degrees is of course increasing the demand, which is why lots of people feel like it is mandatory to get a college degree these days (which, again increases the supply). But this is also a good point on why college degrees are not worth as much as they were 40 years ago. If 100% of job applicants are required to have a degree then you cant exactly use a degree to set yourself apart, meaning that the degree has been downgraded from being a way to set yourself apart from people in the room to just a ticket to enter the room in the first place.

 

[boris]

in reality, nothing is stopping anyone from levelin up, from crap minimum wage to about 90ish a year, you can guile you're way into a better paying job, understanding da "unfairness" of da world up front...its about from there past 6 figs thats its outta your hands and more has to do with da strings being pulled above you.

As someone who switched to a more lucrative career it's actually really difficult. I think that's why I have a lot of empathy for people stuck in low paying jobs.

 

[Xennial]

Can you elaborate on why 90k ish? Seems like an arbitrary number

in reality, nothing is stopping anyone from levelin up, from crap minimum wage to about 90ish a year, you can guile you're way into a better paying job, understanding da "unfairness" of da world up front...its about from there past 6 figs thats its outta your hands and more has to do with da strings being pulled above you.

 

[sea manup]

It's the same reason it costs so much money to hire a plumber, if everyone wanted to become a plumber it would be super cheap to get your sink installed. But no one wants to be a plumber, there is a lack of supply, so you have to pay them good money, more money per hour than the average white collar college graduate.

 

[ninjahood]

As someone who switched to a more lucrative career it's actually really difficult. I think that's why I have a lot of empathy for people stuck in low paying jobs.

its not easy, but its definitely not impossible...i low-key don't even accept da premise of being "stuck" at a low wage job...
i used to work at retail for 10 years while going to school, one day i realized i aint ever gonna make money to reflect a lifestyle i aspired to have so i saved some money, got my CDL, all da endorsements, and leveled up.

not satisfied with that, i plan on getting my bachelor's in a couple of years after my associates was gotten, to balance me out be as employable as possible since i already have a extensive work experience history.

 

[crystalmethod]

As someone who switched to a more lucrative career it's actually really difficult. I think that's why I have a lot of empathy for people stuck in low paying jobs.

It can be hard, for many reasons.
Alot of people have no idea what they could be doing to make more.
And alot of ppl get complacent, which I was guilty of. Was working for the same company for 10 years. Had different positions while I was there but again, same company for 10 years and wasnt really making much.

Had a whole bunch of life changing events and found myself ina situation where I had to fully support my family on my own. So with that motivating me I went found a new job and I'm making double what I was before.

 

[ninjahood]

Can you elaborate on why 90k ish? Seems like an arbitrary number

because 6 figs is milestone in ur career accomplishments, and one companies scrutinize individuals who cross that threshold and expect those credentials accordingly...thru sheer determination and being savvy, you can guile you're way to 90ish k just being scrappier than da next dude, and willing to get ur hands dirty with a array of blue collar jobs that, if you leave da white collar "im only going to college, im too good for manual labor/industrial work" mindset at home, pay reallllly well.