President Barack Obama’s first economics deputy says current US. economic policies would leave one-third of working-age men unemployed in 2051.
— Lawrence H. Summers (@LHSummers) September 28, 2016
Summers ran Obama’s National Economics Council in 2009 and 2010. He was Treasury Secretary for President Bill Clinton, president of Harvard University from 2001 to 2006, and teaches there now.
His new prediction of high unemployment is silent about the impact of high immigration. Immigration is a priority for the Democratic Party because it is bringing millions of people who’re likely to vote Democratic in future elections.
Currently, four million Americans turn 18 each year, and the federal government imports 2 million permanent or temporary foreign workers each year, including a few hundred thousand illegals.
Jason Furman, who now heads Obama’s Council of Economic Advisers, speaks more frankly about the huge problem of men who have fallen out of the workforce.
Roughly 10 percent of American “prime age” men, or 7 million men aged 25 to 54, have dropped out of the nation’s workforce of 150 million. They are not trying to get jobs and are not participating in the nation’s labor force because of policy decisions, not because of technology, Furman said in August. “This [dropout] is caused by policies and institutions, not by technology … We shouldn’t accept it as inevitable,” he told a Brookings Institute expert, Dave Wessel on August 10.
But like Summers, Furman doesn’t want to mention the federal government’s policy of using immigration to artificially increase the new labor supply by roughly a third each year.
In his Sept. 26 article in The Financial Times, Summers wrote;
Job destruction caused by technology is not a futuristic concern … everything we hear and see regarding technology suggests the rate of job destruction will pick up. Think of the elimination of drivers, and of those who work behind cash registers. Second, the gains in average education and health of the workforce over the last 50 years are unlikely to be repeated. Third, to the extent that non-work is contagious, it is likely to grow exponentially rather than at a linear rate. Fourth, declining marriage rates are likely to raise rates of labour force withdrawal given that non-work is much more common for unmarried than married men.On the basis of these factors, I expect that more than one-third of all men in the US between 25 and 54 will be out work at mid-century. Very likely more than half of men will experience at least a year of non-work out of every five. This would be in the range of the rate of non-work for high school drop-outs and exceeds the rate of non-work for African Americans today.
What will this mean for the American family? … For alienation and support for toxic populism? These are vital questions. Even more vital is the question of what is to be done. These questions should preoccupy social science researchers.
In August, however, he suggested the fix to many social problems is a “tight labor market,” where unemployment is low and salaries are rising.
— Lawrence H. Summers (@LHSummers) August 8, 2016
Read it all here.
Read more about immigration’s impact on “tight labor markets” here.