Unemployment and underemployment will continue for the foreseeable future according to Michael Spense. We have gone through a period of underinvestment and took on too much debt in terms of both individuals and government. The fact that we’ve been complacent will lead to lackluster job growth with no quick fix being possible.
Jobs in the U.S. into two very large sectors: tradable and non-tradable. Tradable jobs are ones that can be done by anyone around the world: manufacturing, back-office operations, pharmaceuticals, engineering, finance, consulting. Non-tradable jobs are those that really can only be done by people in the U.S., such as retail, health care, food service, government, and construction.
Because most of the jobs that have been created since 1990 have been of the non-tradable variety, these jobs should remain as they can’t be offshored easily.
Spence believes that the only long term solution is to invest in education, research, and infrastructure. Currently, there are too many people who don’t have the required skills in which employers are looking for.
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