Changes In Workforce Education And Manufacturing Employment Share

Is this recession any different because more workers have college education and fewer workers are employed in manufacturing? Economist Arnold Kling believes so.

Both charts above are from "Not Your Grandfather's (or Keynes’s) Economy" by Arnold Kling. Saturday, November 7, 2009.

I think the verdict is still out whether having a US economy with more jobs requiring college education and fewer requiring manufacturing skills makes a difference. Are the two criteria Kling mentions distinctions without a difference? In other words, we can parse the data about the US workforce in many ways. I would would venture we can show that the workforce has gotten taller, heavier, (or maybe the reverse because of the greater number of women entering the workforce who are shorter than men, on average, and weigh less than men, on average.) healthier, longer life expectancy, more native born with fewer immigrants, etc.

The fact that there are measurable characteristic changes in the workforce over many decades does not mean that the economic forces at play are different and that the necessary responses to a recession need to be different.

To be convincing, one needs to show more than just a change in the workforce. One has to show it modifies the demand for goods, services and labor and their supply, or that it creates some sort of friction or barriers which delay a fast response by the economy's participants to adjust prices and match supply and demand. Until labor supply and demand are in sync, the US will have higher than usual unemployment.