GEF: Next Up, Paul Harrington of Northeastern University on Labor Force Economics

PROVIDENCE, RI -- Mr. Harrington is going category-by-category over employment stats. I came way with two main points from his review…

1. Low skill, low education jobs have been hit hardest.
2. Expect to see a replacement of “rule based jobs” with automation, as the economy improves.

RI started its recession about a year earlier than the rest of the country. Unemployment insurance trust funds in many northeast states are in serious trouble. Defends unemployment numbers as being “right”. Was there a controversy there?

Now, to the good stuff:

Labor supply is the basic limit on business growth. If a business needs an educated workforce to grow NOW, it’s going to move, if that workforce isn’t there. Businesses can't wait for the educational institutions to do something.

Some RI specific numbers: Labor supply will grow by less than 5% in RI in the near term (which is my code for “I missed what he said the exact time period was”). In the 35-54 age group, it will fall by about 12%.

Rhode Island needs a strategy to raise quantity and quality of labor supply simultaneously. The only way to do this is to improve the state’s level of educational attainment.

Professor Harrington offers some numbers about a particular kind of income inequality…

A HS dropout in 1979 could expect to earn about $1.3 million, especially if he “knew a guy” who could get him started in a career that could be learned on the job. By 2006, the expected amout was $985,000. “Inequality” between different educational levels has grown.

Mr. Harrington challenges Barack Obama’s means, if not his goals (he uses President-elect Obama's name specifically): You want to redistribute wealth? Give everybody a quality education. In 1979, you "could be a doofus and get away with it.” You can’t do that anymore.