The Great American Job Machine: "Secrets and Lies." (America's Economic Aspects)

Government Finance Review, October 1997 | Go to article overview

The Great American Job Machine: "Secrets and Lies." (America's Economic Aspects)


The following excerpts are from Straight Talk[R] - From the Desk of the Chief Economist, Gail Fosler, June 1997, published by The Conference Board, reprinted with permission.

During the past year, the U.S. unemployment rate dropped to 4.8 percent, its lowest level since 1973, while unemployment rates in Europe are above 10 percent and continue to rise. Today the U.S. economy is adding two to three million jobs per year, compared with the European Union (EU) where employment growth has come to a halt. Equally striking, the U.S. labor force is growing by 1 to 2 percent per year (i.e., almost two million people per year), while the European labor force has not increased measurably since 1991 (i.e., less than 1 percent). This issue of Straight Talk explores some of the popular "myths" (or less politely, "lies") given for superior U.S. job growth, and attempts to identify some less well-known lessons and observations (or "secrets") that may be useful in understanding the very different performance of European and U.S. labor markets.

Lie #1: The United States Has More Small Businesses Than Europe. The structure of the U.S. small business sector is very different from that in Europe. The U.S. economy has 22 million small and medium enterprises, compared with 18 million in Europe. Of these 22 million SMEs, 16.5 million are self-employed workers with no employees - more than 50 percent greater than the number in Europe. Only 5.5 million of the U.S. SMEs have salaried workers, compared with 8 million in the European Union.

Lie #2: The United States Is a More Flexible Labor Market. Every European country has high rates of job creation and job destruction that are not very different from the U.S. For example, 19 percent of all U.S. manufacturing jobs change each year; comparable numbers for France and Germany (total private) are 23.3 percent and 16 percent, respectively. (Estimates of total U.S. job reallocation - including the service sector - are not very different in the aggregate from the 19 percent in manufacturing.) What is very different in the U.S. is the high rate of non-manufacturing job creation that drives the U.S. job machine. This causes U.S. job creation to outweigh job destruction in the non-manufacturing sectors by an overwhelming margin.

Lie #3: U.S. Jobs Are Bad Jobs. Not so! Data show that the increase in U.S. employment, while concentrated in somewhat low-paying industries, has grown relatively faster in high-paying occupations than in low-paying ones. Since 1989, the pace of job growth in managerial and professional specialty (i.e., programmers, financial analysts, technicians, etc.) occupations is twice that in the lowest-wage occupations.

What is most striking about these data is the concentration of employment growth in both high- and low-earning occupations, with the middle groups continuing to recede [ILLUSTRATION FOR CHART OMITTED]. This "hollowing-out" of the middle earning group illustrates the impact of organization and information technologies in the workplace. …

The rest of this article is only available to active members of Questia

Upgrade your membership to receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad‑free environment

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Upgrade your membership to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Great American Job Machine: "Secrets and Lies." (America's Economic Aspects)
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved in your active project from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Upgrade your membership to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.