Heartbreak in the Heartland

EconTalk Extra
by Amy Willis
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Edward Glaeser on Joblessness ... Michael Munger on Traffic...

blacksmith.jpg Despite low official unemployment rates, this week's EconTalk guest, economist Edward Glaeser, argues that joblessness is "the great American domestic crisis of the 21st century." What accounts for this seemingly unprecedented economic and social crisis? And what's different about changing patterns of employment today? We don't bemoan the loss of blacksmiths, but the loss of manufacturing and mining jobs in America's heartland seems much more tragic. Host Russ Roberts and Glaeser explore the possible causes and discuss potential responses in this fascinating episode.

As usual, now we'd like to get your reaction. Consider responding to one of our prompts in the comments, or pose a question of your own. We love to hear from you!

1. What's the distinction between unemployment and joblessness, and why does Glaeser put so much emphasis on it?

2. In discussing possible causes of this epidemic of joblessness, Glaeser suggests there may be both (labor) supply and demand explanations. What are some of these he suggests? (As always, bonus points if you can graph it!) Which do you find to be the most persuasive explanations, and why?

3. Why do people in cities tend to earn more than people in rural areas? And given this trend, why are fewer people moving to cities today? Is this phenomenon more economic or cultural in nature? Explain.

4. How does Glaeser think the opioid crisis affects joblessness?

5. Roberts and Glaeser ruminate on possible responses to alleviate the crisis of joblessness. Which of their suggestions do you find most plausible, and why? Are there any additional suggestions you can offer?

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COMMENTS (4 to date)
Patricia Mejia writes:

Answering no. 3 from the perspective of a city dweller who enjoys the "income bump" due to my location. If we think about the problem as a question of supply and demand, we'd conclude that salaries in cities would actually be lower. More workers against a fixed number of jobs should yield lower wages. The trick is to think about the quality and dynamic nature of the talent pool in cities. If that supply of workers is constantly upgraded with new talent (new entrants), the fixed number of employers has to compete for the best. This leads to higher wages in the quest for the right talent. In rural areas, both the supply of workers and the number of jobs is relatively fixed. Lack of competition leads to a stagnant job market with lower wage growth.

Alex Birkett writes:

I used to love my job but now it feels like work; I'd rather spend my time doing stuff nobody would pay me for. I have long list of things to see, do and lean.

As automation becomes more advanced and there is less need for menial work it seems cruel and unnecessary to make people spend their lives doing it.

Glaeser's paternalistic assertion that meaning is derived from work is troubling. I don't think we should listen to his value judgments about people he admits he has little in common with.

Dain Fitzgerald writes:

@Alex

It's paternalistic to claim that meaning is derived from work? I think it's plainly obvious to most people that this true. That's stretching the word "paternalistic" to crazy new lengths.

Harvey Cody writes:

Eric,
"I am not sure that everyone receiving a UBI is on the backs of 'the 60-70%."

You are correct to observe that the cost of UBI would not fall exclusively on the backs of "the 60-70%." On the other hand, because robots are not and will never be compensated for working, they have and will have no resources from which to pay any portion of the cost of UBI, their backs will bear no burden.

"The 60-70%" would surely pay the lion's share of the cost (both directly and indirectly), but everyone else in the world would bear the rest of cost of a UBI.

Taking resources from relatively productive people and giving those resources to relatively unproductive people diminishes, among other thing, the amount of resources that would otherwise be devoted to research, invention, and development of goods and services people need and want. While UBI recipients would benefit from however much of those resources is left over after the government slices off a huge chunk for itself, everyone, including UBI recipients and their progeny would be harmed by a slower pace of research, innovation and development.

For a broader discussion of how this works see https://harveycody.com/2017/07/26/non-sequiturs-on-parade-part-v/

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