Structural Employment Problems

Labor Slack Points to Structural Employment Problem
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Source: Bloomberg



Nice chart today from Bloomberg Briefs suggesting that we have structural problems in the labor market post-credit crisis.

The income gap based on education levels is well established; there is also a low-wage bias in the economy – we seem to be creating more of the low skill, low wage jobs than we were previously.

This substantial labor slack has persisted since the 2007-2009 recession. It appears that some people are making the decision that rather accept low paying jobs or doing “menial” labor, they prefer to not work at all. Hence, the declining labor pool.

These changes have potentially large ramifications — in such varied areas as inflation, social security and even retail sales.


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