We don’t ordinarily promote Kauffman-funded or originated work on our blog, But in light of recent concerns about rising unemployment and Tim’s own recent blogging about jobs of the future, a recent report by John Haltiwanger, Steve Davis and Ron Jarmin about the continued churning in our job market is well worth reading.
The authors are three of the nation’s best experts on productivity and the labor market. They highlight the important, if not well appreciated fact, that in a dynamic economy, there will also be lots of “churn” – growing businesses that are adding workers, declining or struggling businesses that are shedding them. Indeed, one of the reasons for America’s strong productivity performance over the last 15 years (until recently) is that our labor market is so flexible.
To be sure, this is not to dismiss concerns about cyclically rising unemployment. There is and should be no joy in that. One of the more amazing things about the recent financial/economic turmoil is how quickly both the Fed and the Congress/Administration reacted to the initial signs of weakening in the economy. While such swift action may not avert a recession – the economic indicators seem to get worse each day – it surely already has moderated the slowdown.
The longer run challenge for Washington policy makers is not to adopt policies aimed at slowing the churning process (turning back the clock on trade policy, is one example) that is inherent in a growing economy. Stop churn, and you stop or slow growth.
Better that more attention is paid to policies -- like wage insurance -- that facilitate and indeed encourage workers’ transition from one job to another.
Comments