Katz in 1998: Many individuals believe that cuts in the work week (that is, reductions in > working hours per worker) can reduce unemployment. In what has been labeled > the lump of output fallacy, most advocates of work-sharing implicitly > assume that output is held constant in response to a policy effort to > reduce hours per worker, so that total hours of work to be done each week > are unchanged. Thus a reduction in hours per worker requires an increase in > the number of workers to reach the fixed level of output, and hence > work-sharing allocates the available work more equitably and reduces > unemployment.
Katz then goes on to pedantically show that work-sharing is not a "panacea" and thus (presumably) it is not a viable policy option at all! In a 2011 "White Paper" Katz and Autor wrote: Leading economists from Paul Samuelson to Paul Krugman have labored to > allay the fear that technological advances may reduce overall employment, > causing mass unemployment as workers are displaced by machines. This ‘lump > of labor fallacy’—positing that there is a fixed amount of work to be done > so that increased labor productivity reduces employment —is intuitively > appealing and demonstrably false. Technological improvements create new > products and services, shifting workers from older to newer activities. > Higher productivity raises incomes, increasing demand for labor throughout > the economy. Hence, in the long run technological progress affects the > composition of jobs not the number of jobs. See what happens here? In the "long run" technological progress *inevitably*creates new products and services and increases demand for labor. Therefore technological progress is a panacea! When Katz's panacea doesn't deliver the goods is a "very big puzzle." What did Maynard Keynes say about economists who set themselves too easy a task? On Sun, May 5, 2013 at 4:24 PM, Tom Walker <[email protected]> wrote: > “This still is a very big puzzle,” said Lawrence F. Katz, a Harvard >> professor who was chief economist at the Labor Department during the >> Clinton administration. He called the severe downturn in jobs “the >> million-dollar question” for the economy. > > > Katz is an imbecile. This is no "puzzle." It is the inevitable outcome of > non-employment policies that Katz has himself has championed. Perhaps it is > a puzzle to Katz why his policies have the results they do. In that case, > he should stop being a "Harvard professor". > > According to "Professor" Katz most advocates of cutting the work week to > reduce unemployment believe in something he calls the "lump of output > fallacy," which "implicitly" assumes a fixed level of output and thus an > unchanged total number of hours of work. The "million dollar question" is > how such an unqualified hack could get a job at all, let alone a Havard > professorship and a position of chief economist to the U.S. Labor > Department. > > On Sun, May 5, 2013 at 2:51 PM, Louis Proyect <[email protected]> wrote: > >> NY Times May 3, 2013 >> The Idled Young Americans >> By DAVID LEONHARDT >> >> WASHINGTON >> >> THE idle young European, stranded without work by the Continent’s >> dysfunction, is one of the global economy’s stock characters. Yet it >> might be time to add another, even more common protagonist: the idle >> young American. >> >> For all of Europe’s troubles — a left-right combination of sclerotic >> labor markets and austerity — the United States has quietly surpassed >> much of Europe in the percentage of young adults without jobs. It’s not >> just Europe, either. Over the last 12 years, the United States has gone >> from having the highest share of employed 25- to 34-year-olds among >> large, wealthy economies to having among the lowest. >> >> The grim shift — “a historic turnaround,” says Robert A. Moffitt, a >> Johns Hopkins University economist — stems from two underappreciated >> aspects of our long economic slump. First, it has exacted the harshest >> toll on the young — even harsher than on people in their 50s and 60s, >> who have also suffered. And while the American economy has come back >> more robustly than some of its global rivals in terms of overall >> production, the recovery has been strangely light on new jobs, even >> after Friday’s better-than-expected unemployment report. American >> companies are doing more with less. >> >> “This still is a very big puzzle,” said Lawrence F. Katz, a Harvard >> professor who was chief economist at the Labor Department during the >> Clinton administration. He called the severe downturn in jobs “the >> million-dollar question” for the economy. >> >> Employers are particularly reluctant to add new workers — and have been >> for much of the last 12 years. Layoffs have been subdued, with the >> exception of the worst months of the financial crisis, but so has the >> creation of jobs, and no one depends on new jobs as much as younger >> workers do. For them, the Great Recession grinds on. >> >> For many people with jobs and nest eggs, the economy is finally moving >> in the right direction, albeit a long way from booming. Average wages >> are no longer trailing inflation. Stocks have soared since their 2009 >> nadir, and home prices are increasing again. But little of that helps >> younger adults trying to get a foothold in the economy. Many of them are >> on the outside of the recovery looking in. >> >> The net worth of households headed by people 44 and younger has dropped >> more over the past decade than the net worth of middle-aged and elderly >> households, according to the Federal Reserve. According to the Labor >> Department, workers 25 to 34 years old are the only age group with lower >> average wages in early 2013 than in 2000. >> >> The problems start with a lack of jobs. In 2011, the most recent year >> for which international comparisons exist, 26.2 percent of Americans >> between ages 25 and 34 were not working. That includes those for whom >> unemployment is a choice (those in graduate school, for example, or >> taking care of children) and those for whom it is not (the officially >> unemployed or those who are out of work and no longer looking). The >> share was 20.2 percent in Canada, 20.5 percent in Germany, 21 percent in >> Japan, 21.6 percent in Britain and 22 percent in France. >> >> The European economy has deteriorated over the last two years, and the >> American economy has strengthened modestly. But the job growth here has >> been fast enough merely to keep pace with population growth, which >> suggests that this country still lags in the employment of young adults. >> In 2000, by contrast, the United States led Germany, Britain, France, >> Canada and Japan — as well as Australia, Russia and Sweden — in such >> employment rates. The nation now trails them all. Older American workers >> have also lost relative ground, but not as much. >> >> As Mr. Katz, Mr. Moffitt and others note, an explanation of the root >> causes remains elusive. But there are obvious suspects, and each >> probably plays a role. >> >> The United States, for example, has lost its once-large lead in >> producing college graduates, and education remains the most successful >> jobs strategy in a globalized, technology-heavy economy. It is no >> accident that the most educated places in the country, like Boston, >> Minneapolis, Washington and Austin, Tex., have high employment rates >> while the least educated, including many in the South and inland >> California, have low ones. The official unemployment rate for 25- to >> 34-year-old college graduates remains just 3.3 percent. >> >> Beyond education, the nation has also been less aggressive than some >> others in using counseling and retraining to help the jobless find work. >> To take one small example, a recent study in France by the renowned >> M.I.T. economist Esther Duflo and four colleagues found that placement >> programs for unemployed workers helped not only the workers but the >> economy too. The counseled workers were more likely to find work, and >> they did not simply take jobs from other candidates. Overall employment >> rose more quickly in the regions with job counseling. >> >> Other research notes that the United States has expanded parental leave >> and part-time work less than other countries — and, perhaps relatedly, >> employment rates among women here have slipped. >> >> Whatever role these trends are playing, they do not appear to fully >> explain the employment decline. It is too big and too widespread. >> Existing companies are not adding jobs at the same rate they once did, >> and new companies are not forming as quickly. >> >> What might help? Easing the parts of the regulatory thicket without >> societal benefits. Providing public financing for the sorts of >> early-stage scientific research and physical infrastructure that the >> private sector often finds unprofitable. Long term, nothing is likely to >> matter more than improving educational attainment, from preschool >> through college (which may have started already). >> >> Many business executives and economists also point to immigration >> policy. Done right, an overhaul could make a difference, many say, by >> allowing more highly skilled immigrants to enter the country and by >> making life easier for those immigrants already here. Historically, >> immigrants have started more than their share of new companies. >> >> Perhaps the most remarkable aspect of the jobs slump is that the >> Americans in their 20s and 30s who have been most affected by it remain >> decidedly upbeat. They are much more hopeful than older generations, >> polls show, that the country’s future will be better than its past. >> >> Based on what younger adults have been through, that resilience is >> impressive. It’s probably necessary, too. The jobs slump will not end >> without a large dose of optimism. >> >> David Leonhardt is the Washington bureau chief of The New York Times. >> _______________________________________________ >> pen-l mailing list >> [email protected] >> https://lists.csuchico.edu/mailman/listinfo/pen-l >> > > > > -- > Cheers, > > Tom Walker (Sandwichman) > -- Cheers, Tom Walker (Sandwichman)
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