http://prospect.org/article/how-america-grew-and-grew-unequal
Thursday, August 18, 2016
Wednesday, August 17, 2016
Care Work as the Work of the Future [feedly]
----
Care Work as the Work of the Future
// TripleCrisis
C.P. Chandrasekhar and Jayati Ghosh
Across the world there is much gloom and doom about the impact of technological changes on jobs, as automation and other innovations are seen to threaten not just blue-collar jobs but also many forms of office work. It is true that the way that most of our economies are organised at present, heavily reliant on market mechanisms with less and less public intervention to alleviate the adverse effects, there could well be an increase in technology- driven unemployment.
But even so, some of the extreme pessimism may be misplaced because of the possible emergence of other forms of employment that are more based on human interaction. Particularly, some essential services that enhance the quality of life – which are often broadly clubbed into the composite term "the care economy" – are unlikely to be either as efficient or as socially useful if the element of human interaction is reduced.
Many care services necessarily require face to face relationships, and even if technologies can assist in these and make them more productive, the human element cannot be eliminated. Indeed, better quality care (whether in paid or unpaid forms) typically requires more intensive human input, so standard approaches based on puerile notions of labour productivity are simply irrelevant in such activities.
This in turn means that the care economy broadly defined will continue to be an important source of employment generation in the foreseeable future, and is likely to expand at a faster rate than many other economic activities. This is especially so in the many countries – certainly across the developing world – where care services are currently hugely underprovided by society and therefore forced to be delivered (often in extremely difficult
and haphazard ways) by unpaid family labour.
How can we even begin to estimate the likely future global demand for care activities, which include care of the old, the young, the sick, the differently abled, as well as the healthy adults who have different kinds of care needs including all the aspects of quotidian life? This is a huge area of work, made more complicated by the fact that so much care work is performed within homes and communities in often socially unrecognised ways.
But it is possible to provide some initial estimates, based on current employment in care activities in societies where these are more developed and known to be better delivered. Suppose we take Sweden as the benchmark on the basis of which to estimate likely care requirements in the future, since Sweden is known to have a well-functioning (and largely public) health system and is also known to provide reasonable levels of child care and elderly care. Employment in care activities in Sweden relative to the target populations can provide an indicator of the desirable levels of employment. Of course, this is likely to be both optimistic (since most countries currently lag well behind Sweden in such provision) and an underestimate (since much of the employment involved in the provision of such care would not be captured by the occupational classifications alone). So this is clearly an imperfect measure, but nevertheless it provides some broad indications of the potential demand for care.
Here, the Statistical Database of Sweden is used to identify the number of workers in certain care activities in 2014, and compared with the UN population projections for Sweden for 2015. The category of "health workers" includes health care managers, doctors, nurses, physiotherapists, psychologist and psychotherapists, other health care therapists and complementary medicine therapists, dentists and dental nurses and other health care assistants. These occupations together amounted to 762,806 workers in Sweden in 2014, which (given the estimated population of 9,779,426 in 2015) means an average of one such worker for every 12.82 persons.
Now apply this norm to the UN population projections for 2030 for all countries, on the assumption that this is the desirable norm for other countries to try to achieve by 2030 (and is not unreasonable given the Sustainable Development Goals). This gives estimates of the likely requirement of health workers in different regions and in the world as a whole in 2030, which can be compared to the projected working age population (assumed to be 15-59 years) in that year.
A similar exercise can be carried out for dedicated child care and dedicated elderly care. For child care, the following occupations are used for Sweden: pre-school managers, primary and pre-school teachers, and childcare workers and teachers' aides. When compared with the number of children in the 0-14 age group, this yields a norm of 3.6 children per worker. For the elderly, defined as 60+ years, the occupations taken are elderly care managers and
attendants, personal assistants and related workers. Obviously the elderly are also much more likely to require the assistance of health workers, but this is subsumed under the demand for health workers from the general population. This calculation yields a norm of 16.24 elderly people per worker. This may seem a large number, but it is likely that many people in the 60-70 age range are unlikely to require much assistance. (We do no attempt to measure the care requirements of the differently abled, which would significantly add to the estimates.)
Table 1 provides the results of this exercise in terms of the likely requirement of some categories of care workers using this norm. Several striking features emerge from this. First, if reasonably adequate care services are to be provided to people across the world in 2030, this will require a massive increase in care employment, even in the very limited occupational categories mentioned above. Second, in most countries and regions, this is likely to be a significant proportion of the working age population – and therefore an even larger proportion of the actual employed population. Third, in terms of providing such services to a reasonable level, many more workers will be required in related activities as part of the support and administrative systems to deliver these services.


Charts 1, 2 and 3 describe the estimated requirement in terms of the likely regional spread of this type of occupation in 2030. It is evident that Asia dominates in the requirement, simply because of its large population – but what is surprising is that, despite the current perceptions of a younger population than in other regions, the requirement in terms of elderly care is also going to be very large, amounting to well over half the total requirement in 2030.
This basic and even simplistic exercise still provides some idea of the potential of the care economy to generate jobs in the future. But this will NOT be delivered by market forces on their own, and nor will such jobs be "decent work" if the market alone is to determine this. The need for state intervention – and for public provision of these essential care services – is therefore paramount.
Chart 1

Chart 2

Chart 3

Originally published in Business Line.
Triple Crisis welcomes your comments. Please share your thoughts below.
Triple Crisis is published by
----
Shared via my feedly newsfeed
TANF at 20: Failing to Help Most Unemployed Parents Find and Maintain Work [feedly]
----
TANF at 20: Failing to Help Most Unemployed Parents Find and Maintain Work
// Center on Budget: Comprehensive News Feed
As we approach the 20th anniversary of the Temporary Assistance for Needy Families (TANF) block grant on August 22, this blog series will outline key facts about the program.
----
Shared via my feedly newsfeed
Tuesday, August 16, 2016
When fiscal policy lags, the one-two fiscal/monetary punch doesn’t land [feedly]
----
When fiscal policy lags, the one-two fiscal/monetary punch doesn't land
// Jared Bernstein | On the Economy
Two recent pieces looked at where we are in this recovery and why, seven years into an expansion, we're still not at full employment. One is by my main man Josh Bivens from the Economic Policy Institute and the other is by David Mericle and Avisha Thakkar from Goldman Sachs (GS) research (sorry; no link to that one).
The figure below–not from either of these pieces–motivates the discussion. It shows three lines of real GDP: an estimate of potential GDP pre-great-recession (2007), the most recent estimate of the same, and actual real GDP (potential GDP is CBO's estimate of what GDP would be with fully utilized resources; it's the value of the economy when it's firing on all cylinders). I–somewhat artfully, you'll surely admit–call this figure: The runner who can't cross a goal line that's moving towards her.
Sources: BEA, CBO
Why is that?
The GS folks take a unique and informative approach: they compare a spate of economic indicators in the US to the "Big Five" advanced economy financial crises (taken from the work of Carmen Reinhart and Kenneth Rogoff) as well as to the 2008 European crisis economies. Basically, GS asks: how has the US recovery gone compared to prior recoveries elsewhere from financial-crisis-induced recessions? (The "Big Five" include Spain in 1978, Norway in 1987, Finland in 1990, Sweden in 1990, and Japan in 1992.)
Josh provides a different but also useful comparison: prior US downturns.
The GS team concludes that the labor market in particular has outperformed their historical comparison groups, as shown through the unemployment rate comparison below. True, our unemployment rate is biased down due to the weak performance of labor force participation and still-elevated underemployment, but as I've extensively documented, the US job market has been tightening up for awhile, driven by solid employment growth, now averaging around 200,000/month. See Bivens' Figure A on this point.
Source: GS Research
Still, as the first figure shows, the output gap is yet to close, even as potential GDP's been downgraded. That reflects both slower labor force growth (some of which is demographics but some of which is weak labor demand) and our most serious outstanding economic problem, very slow productivity growth.
What's most interesting to me about both the Bivens and GS studies is in regard to policy responses. Initially, US policy makers hit back hard with both monetary and fiscal policy. I've argued that the combination is important and complementary: monetary policy lowers the cost of borrowing but if households are both deleveraging and, based on the loss of housing wealth, suffering from lower net worth (i.e., a negative wealth effect), they're less likely to take advantage of those lower rates. That's when you need fiscal policy to put more money in people's pockets such that they'll tap the monetary stimulus. Ergo, the one/two punch.
Both studies show the following: the one/two punch of monetary/fiscal policy weakened when fiscal support for the recovery faded. The GS figure is striking (sticking with my artful theme, let's call it Paul Krugman's nightmare). Fiscal support started strong both here and in Europe, as did (see second figure) monetary policy (the negative numbers reflect the Fed's lowering and holding down the Fed funds rate). But while the monetary authorities kept their stimulus going, austere fiscal policy kicked in with a vengeance.
Source: GS
Source: GS
Bivens austerity figure is also illuminating, and includes all three levels of government spending (fed, state, local).
Source: Bivens
Over to Josh:
[The above figure] shows the growth in per capita spending by federal, state, and local governments following the troughs of the four recessions. Astoundingly, per capita government spending in the first quarter of 2016—27 quarters into the recovery—was nearly 3.5 percent lower than it was at the trough of the Great Recession. By contrast, 27 quarters into the early 1990s recovery, per capita government spending was 3 percent higher than at the trough, 23 quarters following the early 2000s recession (a shorter recovery) it was 10 percent higher, and 27 quarters into the early 1980s recovery it was 17 percent higher.
His judgment is harsh and unequivocal…practically Old Testament:
If government spending following the Great Recession's end tracked spending that followed the recession of the early 1980s for the first 27 quarters, governments in 2015 would have been spending an additional trillion dollars in that year alone, translating into several years of full employment even had the Federal Reserve raised interest rates. In short, the failure to respond to the Great Recession the way we responded to the other postwar recession of similar magnitude entirely explains why the U.S. economy is not fully recovered seven years after the Great Recession ended.
I think that's probably right and I also think it helps to at least partially explain what may be the most negative development in any of the above pictures. I'm gonna let you guess what that is…I'm waiting…hint: it's in the first figure.
It's the sharp decline, from the 2007 to the 2016 vintage, in CBO's estimate of potential real GDP. Hard to believe that downshift is a demographics story, because CBO estimators knew the population's demographics back in 2007, when they had potential growing a lot more quickly. In fact, CBO assigns most of the reduced potential to "reassessed trends:" a more pessimistic outlook re hours worked and productivity than what they believed before the crisis. By taking half the punch out of the one/two fiscal/monetary punch, dysfunctional and mindlessly austere policy makers have contributed to the loss of hundreds of billions in value-added.
Still, sticking with the first figure, soon the aging runner will likely finally cross the goal line, and we're doing better here than most other advanced economies. We're nudging towards full employment and I'm even finally seeing a little pressure on wages. But it would be foolish to ignore the mistakes we've made and what they're actively costing us in lost output, jobs, and living standards.
----
Shared via my feedly newsfeed
Subscribe to:
Posts (Atom)