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Demagoguery vs. Data on Employment in America – Article by Tyler Watts

Demagoguery vs. Data on Employment in America – Article by Tyler Watts

The New Renaissance Hat
Tyler Watts

Demagogue politicians love to play on popular fears that low-wage foreigners are “stealing” good-paying American jobs by way of outsourcing and globalization. The claim is made by nativists and protectionists of all political stripes, whether leftists complaining of a “rigged economy” or rightists speaking of other countries “beating us” economically.

A sound economic analysis of the claim about job losses due to international trade should address two questions: First, is it true that the US has lost jobs due to trade (or other factors)? Second, is this phenomenon good or bad overall for the US and world economies?

On the first point, it can appear as though the US has lost jobs. For example, as Figure 1 shows, manufacturing employment in the US has declined by about 2 million from pre-Great Recession levels, and is down by over 7 million, or 37 percent, from the all-time high reached in 1979.

Figure 1: Total Manufacturing Employment, 1940–2016


The problem, though, is that by looking at manufacturing in terms of jobs, we’re missing the full picture of industrial production.

Nevertheless, the demagogues still argue that, even though high-paying service sector jobs have more than replaced lost factory jobs, “we don’t make things here anymore” and we should lament this. This oft-heard refrain is patently false. We don’t make certain things, such as garments, toys or electronics, because global free trade and technological advances tend to shift America’s output into those industries in which our comparative advantage is greatest. But Americans do indeed make things — quite valuable things.

This can be seen in Figure 2, which shows the US Industrial Production Index for the “de-industrialization” period. After the expected steep decline following the Great Recession of 2008–2009, US manufacturing has slowly bounced back and is now producing more products, in value-added terms, than ever before. Indeed, this index, which consists mainly of manufacturing, has grown by over 100 percent since the 1979 peak in manufacturing employment.

Figure 2: Industrial Production Index for the United States, 1979–2016


In other words, thanks to productivity gains, we need fewer workers to make more stuff.

From an economic perspective, nothing could be better news. US manufacturing creates 100 percent more value with 37 percent fewer workers. Creating more value with fewer workers means we’re more efficient than ever, or put another way, more productive than ever. These awesome productivity gains have many sources, especially in the form of technological advances in areas like software, robotics, and communications. Globalization and outsourcing have also played a role, as they allow American workers a greater degree of specialization in those sectors where our productivity edge is largest.

The good news gets better, though: not only have we gained jobs on net, but jobs have grown faster than the population over time. Since the 1979 peak in manufacturing employment, the US adult population grew by 53 percent, whereas employment grew by 59 percent, as shown in Figure 3.

Figure 3: Population Growth vs. Employment Growth Since 1979

watts3Source: Federal Reserve Economic Data

Despite these generally positive facts, some still contend that we’ve replaced “good” manufacturing jobs with lousy service sector jobs. Well, of course it must be true that, if we’ve lost manufacturing jobs, but gained jobs overall, then all of the job gains must have come from non-manufacturing sectors. And indeed the service sector, broadly defined, has seen employment growth of 90 percent since our 1979 benchmark. But beware of making hasty earnings assumptions about a sector that employs nearly 124 million people. To see whether the newly-created “service sector” jobs really don’t pay as well as the vaunted manufacturing jobs, we need to drill down into the employment and earnings data. What we’ll find is that a large majority of the new service sector jobs pay just as well or much better than manufacturing jobs.

Table 1 presents Bureau of Labor Statistics data on the 15 largest sectors and sub-sectors of the US economy, which together represent over 96 percent of the total net increase in payroll employment for the post-peak manufacturing jobs era (1979 to 2016). This might come as a surprise to the anti-globalization crowd: despite the loss of 7 million manufacturing jobs (and some mining, logging, and utilities sector jobs), we’ve seen a net increase of nearly 53 million total jobs. Of these net new jobs, fully 62 percent of them feature, as of January 2016, average hourly earnings equal to or greater than current average hourly manufacturing earnings. In other words, most of the 53 million new jobs pay the same or better wages than the demagogues’ benchmark “good” manufacturing jobs. So we lost 7 million good jobs, only to gain about 32 million equal or better-paying jobs, along with about 19 million lower-paying jobs (about 38 percent of net new jobs pay less than manufacturing).

Table 1: Employment Changes and Current Earnings by Sector

watts4Source: Bureau of Labor Statistics

We’ve established that, despite a major decrease in employment in the manufacturing sector, we’ve gained many more jobs than we’ve lost in the past 35 years or so, and that most of these new jobs pay better to boot. Economic changes, while painful in the short run, have brought gains in output and employment not only for the US, but for the rest of the world as well. Overall, this is good news for the US and world economies.

So, as the campaign season heats up, let’s not be misled by baseless arguments about America “losing jobs” or other countries “beating us” at trade. Trade is a positive sum game, and the benefits for both the US and world economies are, shall we say, “yuge.”

Tyler Watts earned his PhD in economics at George Mason University in 2010. He currently teaches economics at East Texas Baptist University and runs the Institute for Economic Education (see YouTube channel here), a public outreach focused on integrating economics with a Biblical worldview and providing unique teaching tools for high school and college economics students.

This article was published on and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Maybe the Hardest Nut for a New Scientist to Crack: Finding a Job – Article by Bryan Gaensler

Maybe the Hardest Nut for a New Scientist to Crack: Finding a Job – Article by Bryan Gaensler

The New Renaissance Hat
Bryan Gaensler
March 29, 2015

The typical biography of a scientist might look something like this.

At a young age, a boy or girl discovers a love for science. Their dream is to become perhaps a geologist, a chemist, or a marine biologist.

At school they work hard at math and science, and they supplement this with everything else they can get their hands on: books, documentaries, public talks and visits to museums. They take all the right courses at college and then embark on a PhD in their chosen field.

After many years of hard effort (including chunks of time racked with doubt and frustration), they complete a solid body of work that contains some genuinely new discoveries. They’ve had the chance to meet some of the big names they read about as a kid, and now actually know some of them on a first-name basis.

The day a young graduate receives his or her science diploma is the most thrilling and satisfying day of their life. They are finally, officially, a scientist.

But there’s one thing that all those years of study and research has not prepared them for: the job market.

There must be a job out there somewhere…. Michael Salerno, CC BY-NC-SA

Pounding the pavement as a scientist

No matter what your profession, job hunting is not fun. But for scientists and other researchers, it’s a weird world of intense competition, painfully long time scales, and uncertain outcomes.

The strangest thing about a scientific career is that the application deadlines are often ridiculously early. Hoping to find a university position starting in September? If you wait until February or March to begin your job search, you’ve likely left it way too late. The application deadlines for some of the juiciest positions were way back in November and December.

Because of this advanced schedule, only the things that someone accomplishes a year or more before actually needing a new job will matter for their career prospects. Any amazing discoveries made after the application deadline are largely irrelevant.

The problem is that this is not always how science works.

For many important research topics, all the headline results emerge only at the very end. Students whose research is part of a massive longitudinal study or who are members of a big project team suddenly find themselves at a huge disadvantage, because they often can’t provide instant evidence of the quality of their work a whole year before needing a job.

The other daunting thing is the intensity of the competition. For most specialized scientific topics, there are far more PhD degrees than job postings: across all of science, doctoral degrees outnumber faculty positions by a ratio of 12 to one. An advertisement for a fellowship or junior faculty position will routinely draw hundreds of applications, and only 1%-2% of graduates will eventually land a coveted professorship.

How to proceed, when the odds are so stacked against you? Inevitably, the only way to counter the competition is to apply for lots of positions. A budding scientist is expected to apply for a dozen or more jobs, spread all over the world.

This situation immediately creates some challenges and problems.

By increasing the quantity of applications, the quality suffers. In an ideal world, an applicant will provide a carefully wrought narrative, weaving a story as to how their skills and background perfectly dovetail with the interest of the department they hope will hire them. But there’s no time for that. Instead one typically sends out a generic CV and research plan, and then essentially just hopes for the best.

The process is also incredibly inefficient. Professors all over write endless careful letters of recommendation, most of which have little bearing on the outcome. Selection panels spend hundreds of hours reading huge piles of applications, but can only afford a scant 10-15 minutes considering the merits of each candidate.

What’s more, not everyone can freely pursue jobs anywhere the market will take them. Young children, aging parents and other personal circumstances result in a large pool of outstanding scientists with strong geographic constraints, and hence limited options.

Overall, the harsh reality is that many applicants will simply not get any offers. A lifelong dream of being a scientist, combined with an advanced postgraduate degree, is tragically not a guarantee of a scientific career.

Good scientists should be able to find jobs

The frustration, disappointment and disillusionment grow every year. Things need to change.

First, employers need to make much more of an effort to tell applicants what sort of scientist they are looking for. Instead of reducing the job searching process to the scientific equivalent of speed dating, advertisements need to set out a clear and detailed set of selection criteria, with lots of context and background on the role and working environment. By properly telling the community what they’re looking for, labs and research institutes can focus their time on candidates with useful qualifications, and applicants can focus their energy on only those jobs for which they have a realistic chance.

Second, we need to create flexible career paths. Part-time positions, “two body” hires for couples with both members in academia, and accommodation of career interruptions need to become de rigueur, rather than whispered legends we’ve all only ever heard about second- or third-hand.

And finally, a specialist science degree needs to move beyond the expectation that it offers training only in one particular type of science.

A good scientist graduates with passion, vision and brilliance, and also with persistence, organization, rigor, eloquence and clarity. A scientist can incisively separate out truth from falsehoods, and can solve complicated problems with precious little starting information. These are highly desired attributes. The scientific community needs not just accept but celebrate that the skills and values we cherish are the paths to a wide range of stimulating and satisfying careers – both in and out of academia.

Bryan Gaensler is an award-winning astronomer and passionate science communicator, who is internationally recognised for his groundbreaking work on dying stars, interstellar magnets and cosmic explosions. A former Young Australian of the Year, NASA Hubble Fellow, Harvard professor and Australian Laureate Fellow, Gaensler is currently the Director of the Dunlap Institute for Astronomy and Astrophysics at the University of Toronto. He gave the 2001 Australia Day Address to the nation, was awarded the 2011 Pawsey Medal for outstanding research by a physicist aged under 40, and in 2013 was elected as a Fellow of the Australian Academy of Science. His best-selling popular science book Extreme Cosmos was published worldwide in 2012, and has subsequently been translated into four other languages.

This article is republished pursuant to a Creative Commons Attribution No-Derivatives license. It was originally published by The Conversation.