Welcome back to The Workweek, the Indeed Hiring Lab’s round-up of the latest research, news, and perspectives that made us think deeply or differently about the labor market this week. It’s your guide to the most important new insights about work.
Here are our picks for this week:
When I’m Sixty-Four
Do you ever worry that you may not be prepared for retirement, or are the finer details of social security benefits a complete mystery? If so, new research from the University of Southern California indicates that you are not alone. A survey of Americans of all ages reveals a startlingly high level of retirement illiteracy, with 70% of survey respondents describing themselves as either just ‘somewhat’ or ‘not too’ knowledgeable. Meanwhile many Americans are not aware of all the benefits to which they are entitled, and perhaps most concerning, this trend has gotten worse since the survey was last conducted in 2009. (OECD)
The Rich Get Richer
Today economic inequality is one of the most discussed topics amongst economists and policymakers worldwide, and it was unquestionably a crucial issue in the 2016 US election, disparities in the data available to economists for measuring income and an inability to discern the impact of government wealth redistribution make it difficult to assess the true degree of inequality. Researchers Piketty, Saez, and Zucman use some creative techniques to overcome these obstacles, and find that income growth has eluded the 117 million Americans at the bottom half of the income distribution for an entire generation. (VoxEU)
Two questions that regularly arise when discussing the impact of robots and automation on the labor market are: how many jobs are likely to be lost to machines, and how many jobs will be created to complement this new technology? The Economist highlights a working paper that came up with some rather bleak answers to these queries. Between 1990 and 2007 each industrial robot added for every thousand workers decreased overall employment by nearly six workers. Worse, the increased number of robots did not raise employment for any group of workers — not even those with a college degree. (The Economist)
A Tight Labor Market, No Matter How You Slice it
The number of workers left on the sidelines of the labor market was one of the more closely watched figures after the Great Recession. Marianna Kudlyak of the San Francisco Fed reviews the recent performance of the Federal Reserve’s Non-Employment Index (NEI), an alternative measure of labor market tightness which accounts for all unemployed, not just those looking for work and also weights different groups by the probability that they will resume job-hunting. Kudlyak finds that the NEI reading has returned to prerecession levels, and is in agreement with the picture of a tight labor market as currently portrayed by the overall unemployment rate. (Federal Reserve Bank of San Francisco)
What’s New in Baltimore?
The recent vote in Baltimore to raise the city’s minimum wage to $15 an hour provides economists with yet another piece of real-world evidence for the debate over the impact of a higher minimum wage. What is especially interesting about this case, however, is that most cities which have previously enacted a significant minimum wage hike were typically performing quite well economically, such as San Francisco, Seattle and Washington DC. Baltimore’s mediocre economic performance and high poverty rates add a different dynamic to the minimum wage hike’s potential impact, which will help keep policymakers and economists jawing over this issue from some time to come. (CityLab)