[jellicle]

>Imagine a world where you can retrain yourself on the order of months, not years, and take on little or no debt to do it. How would that impact unemployment or underemployment?

It would have very little effect on un- or underemployment, since un- and underemployment are driven by demand, not supply.

There is zero evidence that unemployment in the United States today is driven by a mismatch between skills-employers-want and skills-workers-have, for instance.

Paul Krugman discusses this in a few of his columns.

[yummyfajitas]

It would have very little effect on un- or underemployment, since un- and underemployment are driven by demand, not supply.

Funny - demand is doing just fine. It's only employment that is suffering. See stats here:

http://news.ycombinator.com/item?id=2240468

The Keynesians haven't been proven wrong on their claims that increased demand -> increased production. It's the part where increased production -> increased employment that they have been shown conclusively to be incorrect.

[jellicle]

I feared that mentioning Krugman would bring out the Krugman-haters with their nonsense. Sadly, I was right to fear.

You know that the Fed statistics that you cite show that, for example, durable goods production is down 6% since 2007? Even though population has increased in that time. That is to say, the graphs support what I said and what Paul Krugman says, not the nonsense that you think you've learned from Fox News.

http://www.nytimes.com/2010/09/27/opinion/27krugman.html

http://krugman.blogs.nytimes.com/2012/05/09/a-structural-bla...

[yummyfajitas]

You are completely ignoring the point - if demand increases but producers don't need to hire people to produce more, employment does not increase. I.e., demand may be correlated with production, but production need not be correlated with employment.

If you looked at the fed stats I cited, they show precisely a lack of correlation between production and employment.

Nothing you have cited disputes this fundamental point. Krugman doesn't even try, he just declares victory and insults those who disagree.

[jellicle]

>if demand increases but producers don't need to hire people to produce more, employment does not increase.

If fishes rode bicycles... but they don't.

Productivity growth doesn't change that much year over year:

http://www.bls.gov/lpc/prodybar.htm

And recessions are generally times of low change, since it doesn't make sense to invest in labor-saving technology when labor is cheap.

> production need not be correlated with employment.

In a speculative robot-filled future, that could be true. On Earth in 2012, if you want something done, you hire a human to do it.

[yummyfajitas]

If fishes rode bicycles... but they don't.

Nonsense. Should I post the graphs again? The graphs clearly demonstrate increased production without a corresponding increase in employment. This is the "jobless recovery" that many columnists lament. Some graphs again:

http://research.stlouisfed.org/fred2/series/PAYEMS

http://research.stlouisfed.org/fred2/series/INDPRO

http://research.stlouisfed.org/fred2/series/GDPC1

http://research.stlouisfed.org/fred2/series/MANEMP

http://research.stlouisfed.org/fred2/series/IPMAN

And recessions are generally times of low change, since it doesn't make sense to invest in labor-saving technology when labor is cheap.

Labor is more expensive than ever before. Another graph for you to ignore:

http://research.stlouisfed.org/fred2/series/ECIWAG

According to Keynesians (e.g. Krugman), recessions are caused by labor not becoming cheap in response to exogenous shocks (due to sticky nominal wages). Do you disagree with this theory?

[slurgfest]

This is a kind of null hypothesis: that US companies, across all sectors, are permanently not hiring above the rate of replacing their current employees. All dynamic changes are because of fluctuation in supply; the only way companies will hire more in any sector is if increased supply drops wages enough that they can pick up more employees for the same money.

That is a pretty extreme claim which seems pretty easily testable; where has it been tested?

[jellicle]

You seem confused. Perhaps I was not clear enough. Let me reiterate.

Companies hire people to make things or provide services if the company believes it can sell those products or services. If, for example, a company is making 100 widgets a day and selling only 50 widgets a day, the company will not hire new employees at any salary, even a low one, because it already has more widgets than it can sell. If a window-washing company has 6 window washers, and enough work to keep only 3 of them busy, it will not hire a 7th window washer, even at a low salary, because he'll just join the other 3 guys that are already sitting around the office doing nothing. In fact, if that state of affairs is projected to last for a while and laws don't prevent it, he'll fire 3 of the window-washers he already has. As soon as people start wanting window-washing and there is too much work for 6 window-washers, a 7th will be hired.

Unemployment is thus driven by demand for goods and services. The supply of workers is immaterial. Companies don't hire extra workers just because they're cheap.

The U.S. has high unemployment across all sectors. There are no sectors that are booming. Thus, retraining yourself doesn't have any immediately useful benefits during the current recession. ALL fields are slumping.

http://www.nytimes.com/2010/09/27/opinion/27krugman.html

[slurgfest]

Your condescension is unwarranted and inappropriate.

You stated that unemployment is driven by demand. You also stated that there's no evidence unemployment is driven by a mismatch between the pattern of demanded skills vs. the pattern of present skills.

I am not arguing with you about these claims. I am just going on what you say to me. The combination of those claims LOGICALLY ENTAILS that unemployment, being driven by weak demand in every sector, and NOT just by weak demand for certain skills in specific sectors, MUST be driven by weak demand for labor overall, across sectors; in other words, every single sector does not need any more labor of any kind.

This is what you actually said. If you didn't mean it, then you should have said something else.

What I said... which is true... is that this is an extreme claim, and eminently testable. And you still haven't provided any test of it. Although you seem to expect me to believe it. So rather than linking to Krugman again... why don't you provide evidence for the extreme claims you are making?

By the way... I am a regular reader of Krugman's because I like a lot of what he says, so if you cannot be "clear enough" and cannot defend your extreme claims to a Krugman fan, then the problem isn't that you are being discriminated against on the basis of ideology. It is that you are making bold claims which have certain entailments, you are refusing to recognize these entailments and you are refusing to provide evidence to support the claims at the same time as you refuse to withdraw them.

[cadlin]

This:

>I am not arguing with you about these claims. I am just going on what you say to me. The combination of those claims LOGICALLY ENTAILS that unemployment, being driven by weak demand in every sector, and NOT just by weak demand for certain skills in specific sectors, MUST be driven by weak demand for labor overall, across sectors;

Does not entail this:

>in other words, every single sector does not need any more labor of any kind.

If there is weak demand for labor overall, then there will be a weak demand for labor, not zero demand. Additionally, labor does not follow normal supply and demand models, and if you're not aware of the evidence for this I'd suggest you read an economics textbook.

Your argument is similar to that of people saying that because North Dakota has low unemployment due to its energy boom, a massive energy boom would cure unemployment. But North Dakota's energy boom only has such a visible effect because of the state's small population; Pennsylvania has added a similar number of jobs and it has barely changed the unemployment rates, as the the state has a much larger overall population.

Likewise lack of skilled employees in, e.g. the technology sector does not necessarily indicate unemployment is caused by structural shifts in unemployment, unless the tech industry is looking for millions of new employees and can't find them.

Between December 2007 and October 2008 the unemployment rate doubled. It seems far more likely that the United States hasn't yet recovered from the financial crash rather than experiencing an unprecedented shift in its economy at exactly the same time.

Unemployment didn't slowly rise during the boom times, it spiked because of a financial crash and has been slowly declining since. Any claims of a structural shift require extraordinary evidence, and all you've provided are non-sequiturs.

[yummyfajitas]

Rather than mindlessly quoting Krugman's newspaper column, you should go learn the basics of Keynesian economics. Keynesian economics claims that companies don't hire workers because their real wages are too high (due to sticky nominal wages and insufficient inflation).

Since you seem to have an aversion to reading anyone besides Krugman, why not go read his textbook?

http://www.amazon.com/gp/product/1429218290/ref=as_li_ss_tl?...