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.
These are our picks for this week:
The US economy may not be able to grow as fast as it used to
Back in the 1980s and 1990s, the US economy often notched growth rates of 3% to 4% a year. Certainly the Trump administration would like to see that kind of vigorous expansion—the president has promised his policies would spur a 4% growth rate. But growth in that range may no longer be achievable. In the long run, an economy’s speed limit is set by the pace the working-age population is increasing combined with the productivity gains of people on the job. The fact that both the pool of workers and productivity are growing more slowly today suggests that economic growth of 3% or more may not be in the cards. [WSJ]
Superstar firms may be feeding income inequality
Income inequality has been on the rise in many advanced economies in recent years. A new OECD study based on firm-level data finds that leading companies in each sector—sometimes called “superstar” companies—have become significantly more productive than their competitors. As a result, their employees get higher wages. This dynamic is most pronounced in technology-intensive industries open to trade. [VoxEU]
The real job of the future? Taking care of others
Buried within all the buzz that surrounds debates about the workforce of the future, a big truth is often overlooked: Jobs that require uniquely human skills involved with providing care to others are among those projected to grow fastest. Yet these are also jobs that often are not valued much, typically offering low wages and poor working conditions. Sarah O’Connor argues that, if these are the jobs that are here to stay, a strong case can be made for improving them. [FT]
Is the double day holding down women’s pay?
Two recent papers (NBER and AER forthcoming) present new explanations for the gender pay gap. They find earnings disparity widens significantly in the first two decades of a woman’s career—which typically are the years women have children. The gap is particularly pronounced among college graduates and married women. The earnings divergence may be because men with family responsibilities have greater ability than women with families to move to higher-paying jobs, whether with their existing employer or at other companies. [NYT Upshot]
Chinese imports create winners and losers in the US jobs market
Part of the loss of US manufacturing jobs in the early 2000s stemmed from increased Chinese competition. Nevertheless, the overall impact of China-US trade was a plus for the labor market, though the benefits were unevenly distributed among workers and states, a recent St. Louis FED working paper concludes. Most jobs were lost in a handful of manufacturing sectors, including electronic goods, metal products and textiles, and in states that have high shares of factory employment. Those losses were offset by job gains in other sectors of the economy. Meanwhile, American consumers got $260 of extra spending per year thanks to cheaper Chinese-made goods and cost savings by US companies. [St. Louis FED]