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Tuesday, January 23, 2007

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The generation gap on jobs

Deputy Secretary of the Treasury Bob Kimmitt has an interesting op-ed in the Washington Post on the growth in job churn, and why it's a good thing:

More than 55 million Americans, or four out of every 10 workers, left their jobs in 2005. And this is good news, because there were over 57 million new hires that same year.

These statistics illustrate a recent and growing trend of dynamism in our job market, especially among younger workers. Data on labor demand in the United States, gathered for the Job Openings and Labor Turnover Survey (JOLTS), show that the 12 months ending in November had the highest average of labor turnover since the U.S. government began tracking this information in 2000. But the data also show that our economy has maintained a consistently strong ratio of new hires to separations. Over the year ending in November, new hires in America exceeded employee separations by an average of 364,000 per month....

In fact, our workers lead the international marketplace in this trend. Job tenure averages 6.6 years for Americans, compared with an average of 8.2 years for Britons, 10.6 years for Germans, 11.2 years for the French and 12.2 years for the Japanese. Even more striking is that, on average, workers in the United States will have 10 different employers between ages 18 and 38.

This dynamism of our labor force strengthens the U.S. economy because each move to a new employer can involve greater responsibility, greater pay or both. And the time workers spend in search of employment is decreasing. In December, the average duration of a job search was the shortest in more than four years.

Unfortunately, what usually makes headlines is a big company's layoff of workers. What gets less coverage is the 40 months of job growth we have recently enjoyed, the historically low unemployment rate (4.5 percent), record tax revenue and an acceleration in real wage growth over the past year. This is good news for the generation preparing to graduate from high school and college. Unlike their grandparents, who built careers around companies rather than opportunities, members of the class of 2007 will enter the workforce with an understanding that change may be the only constant in their professional careers.

Now I suspect that many blog readers will heap scorn and outrage upon this trend, because they are nostalgic for the days of company men.

I also wonder, however, whether there is a generation gap in the reaction to this trend. My hunch is that the younger workers Kimmitt identifies in the piece already have accepted this new status quo, and will find objections to it puzzling.

posted by Dan on 01.23.07 at 08:59 PM

Comments:

This dynamism of our labor force strengthens the U.S. economy because each move to a new employer can involve greater responsibility, greater pay or both

Sure, and it can involve less pay, with less responsiblity, or more responsibility and less pay. And sure, when your in your twenties it can be fun to change jobs a couple of times. But it gets old pretty darn quick. Moreover, there is a huge status difference between the essentially long term temps working in many setting now and the few 'core' employees.

Of course, our gracious host can simply look at his own life. After the unfortunate events in Chicago, did he go looking for a series of untenured lectureships -- these can sometimes be quite lucrative, after all, if you string several together. Plus they provide flexibility to universities, enabling them to respond dynamically to the marketplace. Like "no Dan, we don't want you teaching International Institutions this year , put can you lecture a couple of sections on the history of Islamic diplomacy? Shouldn't take too long to read up on it."

No, methinks Dr Drezner, he really really wanted the job security (and status) that tenure involves.

posted by: Mitchell Young on 01.23.07 at 08:59 PM [permalink]

And no, I am not nostaglic for the days of company men. I recognize that ontological security is a huge human need.

posted by: Mitchell Young on 01.23.07 at 08:59 PM [permalink]

I think what worries people is that they will have about 10 different jobs between 45-65 ...

a bit of job churn early in your career is one thing (and i do think European systems train people too specifically for a given occupation/ make it hard to move around), but too much churn (especially of the involuntary kind) with kids and heath care concerns and the like is rather another, I would guess.

And if churn doesn't generate -- in the end -- better paying jobs, well, that does kind of change the equation. My sense is that a lot of the churn comes from the fact that folks working minimum wage style jobs basically quit and leave if they need to take time off, on the assumption that they kind find another that is about the same. I am not sure that is productivity enhancing.

posted by: bsetser on 01.23.07 at 08:59 PM [permalink]

"Even more striking is that, on average, workers in the United States will have 10 different employers between ages 18 and 38."

Is that so striking? It seems about right given the number of internships, casual summer gigs, etc., that a young person goes through, then the inevitable early-career job-hopping.

posted by: Trotsky on 01.23.07 at 08:59 PM [permalink]

"In December, the average duration of a job search was the shortest in more than four years."

So, maybe the average duration of a job search is back where it was before the dot-com bust?

Faint praise?

posted by: Arr-squared on 01.23.07 at 08:59 PM [permalink]

This dynamism of our labor force strengthens the U.S. economy because each move to a new employer can involve greater responsibility, greater pay or both.

"Can". Not "does".

posted by: rosignol on 01.23.07 at 08:59 PM [permalink]