The U.S. job market remains far from full health despite recent progress, and requires active efforts by policy makers to help it heal, a Federal Reserve economist said Wednesday.Andrew Levin, currently on leave from the central bank while working at the International Monetary Fund, played down the idea that much of the weakness in the job market is due to demographic trends that are not amenable to policy solutions.
“Rather than focusing on econometric models we should focus on the problems of real people,” Mr. Levin said at a conference sponsored by the Peterson Institute for International Economics, a Washington think tank. “When we talk about people who are underemployed, we’re talking about, say, a single mother who’s maybe relying on food stamps and Medicaid. There’s an urgency for those people.”
Mr. Levin’s message countered that of Fed staff economist William Wascher, co-author of a recent paper that found the decline in the share of Americans holding or seeking jobs is largely the product of demographic factors, such as a rising number of retirees, rather than weak demand in the aftermath of a particularly awful recession. Also presenting on the same panel as Mr. Levin, Mr. Wascher repeated his message that, while slack remains in the job market, conditions have improved considerably over the past year.
Chosen excerpts by Job Market Monitor. Read the whole story at Fed Economist Calls for ‘Urgency’ in Addressing Unemployment – Real Time Economics – WSJ.
Since 2007, the labor force participation rate has fallen from about 66 percent to about 63 percent. The sources of this decline have been widely debated among academics and policymakers, with some arguing that the participation rate is depressed due to weak labor demand while others argue that the decline was inevitable due to structural … Continue reading