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Macroeconomics 5: Car Parts, Celery & The Labor Market

32m 47s

Macroeconomics 5: Car Parts, Celery & The Labor Market

The transcription delves into the effects of technological progress on the labor market, exemplified through the story of Maddie, a low-skilled worker facing job insecurity due to automation and the demand for higher skills. The narrative highlights structural unemployment resulting from the mismatch between workers' abilities and market needs, causing devastating impacts on individuals and communities. It emphasizes the importance of providing opportunities for individuals like Maddie to acquire new skills and thrive in a changing economy. The discussion underlines the significance of addressing the imbalance in the labor market and potential solutions to support workers in adapting to evolving job requirements, ultimately aiming to mitigate the adverse effects of structural unemployment.

Transcription

6136 Words, 33905 Characters

This is our glass. On this American life, one thing we like is a good mystery. Sometimes about really big things, but most times, the little mysteries are the best. Our lost and found is currently filled with pants. I don't know, I've never seen this happen. This is true. This is true. Mysteries have every size, each week, this American life, wherever you get your podcasts. This is Planet Money from NPR. Hello and welcome to Planet Money Summer School. The class, the puts the opportunity in opportunity cost. I'm Stacey Vanick Smith, here with an opportunity for macroeconomic learning. By now, we know the origins of macroeconomics, the juggernaut that is gross domestic product, the ups and downs of the business cycle, all about inflation and money. Today, though, is a really special day, because today we are talking about the part of the economy that is probably the closest to most of our hearts, the job market. There is a supply and a demand for workers and jobs that really sits at the center of our whole economy. This equilibrium is so crucial to the health of our economy and to all of our lives. When this equilibrium gets thrown off balance for some reason, it just has an enormous impact on all of us. When there are, for instance, too many workers and not enough jobs, you can get really devastating unemployment, poverty, desperation, the whole economy can start to unravel, like we saw happen during the Great Depression. Also, when there are too many jobs and not enough workers to fill those jobs, you can see companies struggling to fill positions. It can hold back economic growth, push up prices, cause the economy to kind of grind to a halt. Here to tackle this really monumental economic topic with us is Julia Pollock. Julia, you are the chief economist with Zippercrooter, but you've had a lot of other jobs as well, right? You've taught economics at Pepperdine. I've also done policy work on a capital who. I think you also served in the military, is that right? I joined the Navy in 2011, so I became a helicopter mechanic. What? You know how to fix a helicopter? Sure do. If you get a private helicopter one day, Stacy's come to me. I will. I mean, you'll be at the top of the list. I have like a million questions. I feel like we can do a whole show about you fixing helicopters, but we should get to the economic lesson for today. And truly, it is a big one and a really important and interesting one. It is jobs and unemployment, the labor market. And today we wanted to really explore both parts of this equilibrium. So we're using two different stories to do it. And in the first one, we hear about a situation where jobs are going away. We hear about unemployment. For this one, we go back to 2015 with reporters Adam Davidson and Hana Jaffee Walt. They are in one of the heartlands of American manufacturing, Greenville, South Carolina. And Adam goes there to see how the labor market is changing. Julia, do you think people should keep in mind as they're listening to this? This is an opportunity to think about outsourcing, to think about wages, how high they should be, automation, about whether it makes sense for them to go to college or finish high school. It really covers almost every issue that comes up in a labor economics course. Well, if ever there was a sales pitch to listen to a story, that is a very good one. Up right after the break, we will hear the last job with Hana and Adam. This week on up first, from Minneapolis to Venezuela to the Federal Reserve, one of the biggest stories of the year so far is how the Trump administration is using presidential power. We're following every angle. So you start each day knowing what's happening, what's true, and what isn't on up first. Listen on the NPR app or wherever you get your podcasts. This year on NPR Stool Line, life, liberty, the pursuit of happiness. For centuries, America's pursuit has changed the world. Now 250 years later, who are we? Where are we headed? Join us every Tuesday for a brand new series, America in pursuit. On through line, listen on the NPR app or wherever you get your podcasts. After visiting a bunch of factories, the one that I thought really represented this trend I wanted to understand about the distance between low skill and high school work was a factory owned by standard motor products. Standard motor products makes replacement parts for car engines. So they do it under a lot of brand names, like NAPA and AutoZone. So it's a decent chance that people who have replacement parts in their car have standard replacement parts. They just don't know it. And when I first went, you know, you think auto parts plant. I don't know what you pick. I picture big machines grease and like big hulking guys and, you know, blue jumpsuits. Exactly. Well, they do have the blue jumpsuits. But other than that, it was very, very different. It was people often hunched over tables with microscopes, people typing into computers attached to very clean machines that do their work inside of a box in a very clean, precise way. It looked almost more like a really big high school science lab than what I would picture as an auto parts plant. So like big robotic parts that are like doing all the work sort of very separate from the few people that are actually on the floor. Yeah. Now, the woman that I ended up spending most of my time focused on is a young woman named Madeline Maddie Parlier. She's 23. She has two kids, but she's a single mom. She's totally straightforward about how she wants to make a great life for her kids and how hard that is. So she came to this auto parts plant. I think she had a vision kind of like hours of a lot of tough work. And she comes and her job is to push little buttons. You know, I'm here all day and I'm used to sweating. I mean, really sweating. I come here and I'm putting pieces and I'm like, what am I doing? Because it's so many machines doing what people write. It's so different to see how far factories have come from the old time that I'm used to. It's an eye-opener. But that is not the growth area of employment here. The growth area of employment are the people who actually know how to trouble check those new manufacturing machines, how to run the computer software that runs those machines. People with a lot more skill than Maddie. I see a microscope. Yeah, we have a microscope, a hotstand, snapgages, ID gauges. We use boy mites, go-no-go plugs. We do. We run here. That's Ralph Young. And I came to think of him as the perfect model of the new American factory worker. He knows everything. I mean, you should just see the other really highly skilled workers just like staring in reverence at Ralph Young. I mean, these machines that cost half a million dollars and are incredibly complex, electronics and hydraulics. He can just take them all apart, put them all back together. He's a qualified electrician and a qualified plumber. He just has this encyclopedic knowledge. And at the heart of this process is something he also is an incredible expert at CNC, computer numerically controlled. It's a complicated computer language that tells these really expensive machines exactly how to cut the metals. And Ralph, no surprise here, is also an incredible specialist in CNC programming. When I came here 20 years ago, we didn't have CNC equipment. It was all manuals, screaming scenes. It was more of the hammer and screwdriver fix to where now it's all finesse. That phrase, now it's all finesse. I felt like that should be the motto of American manufacturing. Welcome to Greenville. Now it's all finesse. And not everyone knows how to do finesse. I mean, I learned an awful lot about a fuel injector, which is this incredibly precise instrument, which couldn't exist without this new machinery. Parts of it are so precise that a virus couldn't fit through two pieces of metal. It's at this fraction of a micron, hundreds of a thousandths of an inch. And that's something that someone like Ralph can do. I seven or eight micron wrong adjustment in this machine calls us $25,000 workheads crumble. Really? Two seconds, we could lose $25,000. Two seconds. In two seconds. And that was what was amazing about the technological change we've seen in manufacturing. And by the way, I think this applies to a lot of other places as well. Technology, at the high end means you're more valuable. I mean, if you're going to invest in several million dollars of machinery, someone like Ralph who knows how to operate and repair that machinery is now way more valuable than any one worker was in the old world. Ralph really has bargaining power. He can really command a higher wage. But technology has the other side as well. It makes things incredibly simple, where workers become almost interchangeable automatons. If there's a process that takes two minutes to learn, you haven't invested anything in that person. If that person, you know, shows up late one day or whatever, it's just very easy to dismiss them and just get someone else to replace them. But I don't even think of us as having jobs like that in the United States anymore. We've lost a lot of them. In just the last decade, we've gone from more than 18 million manufacturing jobs to around 12 million. So that's a third of the manufacturing jobs that were left. And Maddie's job is vulnerable. How long does it take to learn this? It takes like not even five minutes. Because it does it for you all you just put the piece in, push the clamps down and push it right through. The only reason I learned that she does have a job is that it's a little more expensive to get a machine to do what she does. I talked it over with Tony Scalzidi, her boss, and he said, sure, technologically, it's very easy to get a robotic arm to do what she does. But it costs her around $100,000. So Maddie's cheaper. So Maddie keeps her job. But let's say there's some new enhancement in robot arm technology and that arm becomes 50,000 instead of 100,000. Or there's some factory in Mexico or China or something that figures out how to do this process much, much cheaper. It's hard to see how Maddie keeps her job if she's not able to acquire those skills anytime soon. I want to understand how this all looks from the whole corporate level. So standard motor products has more than a dozen factories all over the US and Mexico and Poland. And I was surprised to learn that they're run out of Queens, New York, and a Long Island city just across the water from here. By Larry Sills, he's the third generation, his dad ran the company and his grandfather ran the company and he's grooming his son Eric to take over the company when Larry's done. And they've had to lay people off over the years. And we asked him, "What's that like?" It's horrible. It's gut wrenching. And we try because we are a family company. We're not a big Wall Street type company. We're a family company. We have a very strong loyalty to our people and we think they feel the same back. So this is brutal. So why does he do it? It's up to him, right? He can keep people if it's so brutal. He should keep their jobs. It's not up to him in a way. And I've spent a lot of time with this company. I came to really believe that they frankly, if you were an investor, you would wish that they fired more people. They keep people longer than other companies might because of that family run ethic. But standard motor is family run, but it's also a publicly traded company. That means by law, Larry's job is to return value to his shareholders. He has to. And he says returning value to his shareholders means creating auto parts at a quality and a price that people will actually buy. So he says he's not the one making the key decision. The decision is not made by us. The decision is made when the consumer walks into Walmart and there's two products on the shelf. And one is made in this country and one is made in China. And the one in China is 50% cheaper than the one that's made here. And they choose the one that's made in China. That's where the decision is made. That's why Larry has had to do all sorts of things. I mean, he's had to over the course of the last three decades outsource more and more of his manufacturing to China. He, you know, open factories in Puerto Rico and then Mexico and then Poland. Simply because there was no way to compete based on US made goods. Now what was so striking about Maddie is she really knows all this. She knows that the old days are over. She knows that technology and low wage workers in other countries are in a position to replace her someday. She knows that she really needs to go back to school. She really needs to get those skills or else she's not going to be in a really good position. And that means her kids aren't going to be in a good position. But she's a single mom. She's two very sweet kids and she doesn't know what to do. I want to go back to school, but it's the time. If I want to go back, I have to go back on my time and I don't have time, you know, when I get off work, I go pick my kids up and that's it. My life revolves around my children. What do you think education, like if you don't get education, let's just say for whatever reason, you just never go back to school. What do you think that means for your future? I'm always going to be where I am. I mean, to be honest. So when you say I'll always be where I am, where are you? I live with my parents because I can't afford anywhere else and I have my kids and I work. You know, factories are not bad. I love my job. But you know, I'd love to be above an assembly one day. I'd love to be here in the thought best. You know, I mean, what office were you in? We're in the office. Well, the engineers, the highly trained engineers and high level managers who ran the factory. And I know Maddie could do it. She's great at math. She graduated high school with honors. She definitely has management potential. But there's so many, so many things she doesn't know. And the saddest thing is when she says, if I don't get that skill, I'll always stay where I am. I mean, frankly, that's probably a too optimistic assessment. That's that's wishful thinking. She doesn't get those skills. There's every reason to think she's just going to fall farther and farther behind. I came to think this is one of the core challenges of American manufacturing. One of the core challenges of the American economy. How do we get people with low skill? So this country used to have a lot of work for. How do we get those people to become the high school people? How does Maddie get to become Ralph? That was Adam Davidson and Hana Jaffee Walt. And I am back with our helicopter fixing economist, Julia Pollock. Julia, what does this dichotomy between Maddie and Ralph and the story in general tell us about the economy? So this story is really about something that two very prominent economists, Claudia Golden and Larry Katz have called the race between education and technology. So basically over the years, we've had this technological change that has been what economists call skill-biased. That means that it has replaced the jobs for people without formal training and education. But it has actually made better jobs, higher paying jobs, very productive, specialized jobs for people with a lot of training and education. I mean, that is the Ralph Maddie split right there. Exactly. And there's been a hollowing out of sort of the jobs in the middle that are basically now done by computers and software. And when this happens, it creates something known as structural unemployment. So two of the main kinds of unemployment in the economy are cyclical unemployment and structural unemployment. Cyclical unemployment is unemployment that just follows the ups and downs of the business cycle. So like losing your job during a recession because of a recession, that is cyclical unemployment. But structural unemployment, that happens when there is a mismatch in the economy between the skills workers have and the skills companies need. Julia, would you mind defining structural unemployment for us? So structural unemployment results from industrial reorganization typically because of some technological change. It is because some new technology has arrived that makes some kinds of workers more valuable and perhaps makes others obsolete. And structural unemployment can be really, really tough problem to solve. I mean, when workers have developed these skills and all these years of experience, and suddenly companies just don't need those skills or those years of experience at all anymore, they need a totally different set of skills. They don't need the Maddie's anymore. They just need a bunch of Ralph's. It can put all of the Maddie's out of a job. And structural unemployment can just be really devastating to workers and to whole communities. And we've seen this happen when manufacturing jobs moved overseas, right? I mean, it just it can decimate entire communities for generations. So I think what the work of Claudia Golden and Laurence Katz, for example, shows though, is that it doesn't have to be that way. And that's really I think what we need to focus on on doing is giving people like Maddie. Maddie in that story clearly has a lot of soft skills. She sounds like she is really devoted and reliable and hard working. This is someone who just didn't have the opportunity to get the kind of education that you need to succeed. But seems like she actually would be quite open to receiving that education. If if there were some support, my child care support, if it were cheap and affordable and easy for her to do so. Well, I actually have an update on Maddie and she did eventually go back to school and she now works as an accountant. There you go. I think with the growth of more and more online training programs that are affordable and convenient, perhaps we will see more people like Maddie find a way to get marketable job skills that allow them to grow and thrive. We talked at the top of the show about this idea of a balance in the labor market. This balance of workers and jobs. But there can be another issue in the labor market when this balance gets thrown off and that is what happens when companies cannot find enough workers to fill the jobs they have and to fill the jobs they need to grow. This can happen because of something economists will sometimes call a tight labor market. That is just a labor market where unemployment is really low and companies are competing for workers. It can also happen though when there's a mismatch of skills. So when companies need workers with certain skills and they can't find enough of them or it can happen in low wage jobs that are especially grueling and really difficult and this can cause all kinds of economic issues. That in fact is at the heart of our next story. I actually reported this one with Cardiff Garcia back in 2018. It was a planet money indicator episode. For it, we visited a farm in Ventura, California that was having trouble finding enough workers. That story after the break. Are you thinking about making any changes in the new year? The LifeKit podcast is here to help. In each episode we have research-backed strategies and expert advice on everything from meal prep to strengthening relationships to paying down your credit card debt. Make your resolution stick. Listen to the LifeKit podcast on the NPR app or wherever you get your podcasts. Happy New Year! Want to set goals that you'll actually stick to in 2026? You want to accept yourself in the situation you're in but you also want to expect more from yourself and say, "What are the ways that I can grow?" This week, how to design and plan your year on the LifeKit podcast. Listen in the NPR app or wherever you get your podcasts. Hey everybody! Before we get back to the show, a quick plug for something else. So a couple weeks back on Planet Money Summer School, we talked about the beast that is the business cycle, the booms and the bus and how devastating that cycle can sometimes be. The economy could be booming for a few years, stock market is up, people are finding jobs left and right, and then every few years we seem to then have the opposite. The question is, why does that happen? That is economist Atifnian. You heard him on our Planet Money Summer School episode Booms Bus and Us, but Atif had a lot more to say about the business cycle and why it does what it does. And a lot of it, we just couldn't fit in the episode. So we are offering an extended version of that interview for subscribers to Planet Money Plus. And you can hear that in the episode we released just before this one. If that is you, if you subscribe, thank you, thank you, thank you for your support. If it's not, it could be. There's a link in our episode notes where you can subscribe. It smells like celery out here. Yeah, no, you definitely get the, it's kind of nice where we are today because we're really close to the ocean. So you get a combination of that sea air and a little bit of celery hint, so pretty nice spot to be. That pretty nice spot to be is a celery field in Ventura County, California. We were there with Tom Deerder, his family, his own farms in that area for about 80 years. It's like an ocean of celery. Yeah, no, there's probably 80 acres of celery here in the field that we're at right now. Really? So that will all get harvested in about two and a half weeks. By hand? Yeah, so every single stalk of celery needs to get cut by hand. And those hands are getting harder to find. And dollar for dollar, California is the biggest agriculture economy in the country, almonds, oranges, avocados, salad berries, and yes, celery, they're all big business out here. And that big business is having some trouble. Tom Deerderp says finding workers to harvest these crops has been getting tougher and tougher. We're definitely on a downward trajectory. Every year, there is less and less availability and the opportunity to attract workers gets more and more difficult every year. In the middle of the ocean of celery, there is a crew of about 30 workers. They walk in a row in big straw hats, hacking off celery stocks, and tossing them onto this motorized platform, which stretches across the field and chugs along behind them. They're so fast. It's really cool. They are. It's a skilled position that takes a lot of years of experience to be able to perform at this level. And obviously you can see they've mastered it. On that moving platform, another worker cleans up the celery stalk and then packs it into a box. Alex Martinez is the harvest manager out here and he shows us his celery blade. It's a 12 inch dexter stainless steel machete that is then cut about four inches from the top, turned and re-welded back to it. Oh, this is like a custom job. So yes, a lot of crops can be harvested by machine. Crops like wheat, corn, potatoes, but most fruits and vegetables aren't quite uniform enough to be harvested like that. For the most part, they have to be harvested by hand. It is really hard and dangerous work, 10 hour days, swinging a knife in the hot sun. And when the job markets strong, like it has been for the last few years, these workers have a lot of other options. They move into whether it's landscaping jobs, construction jobs, food service jobs, whenever there's an increase in demand from the general economy, workers generally migrate away from farm work into other areas. So Tom Deerdorf has had to compete for workers. He's raised their pay by actually quite a lot. Back in 2006, working the celery field paid about $8.70 an hour. Now it pays more than $21 an hour. So pay has gone up by more than double. And that is way faster than wages have grown in most of the country. Now we are well aware of the criticism that's been around for a while that the agriculture sector relies on underpriced labor and in particular on undocumented workers who take very little money for back breaking work. We couldn't speak to any of the workers on Tom's farm, but Tom says his workers all are documented and that even doubling wages hasn't solved the labor problem. We've shifted away from the most labor intensive crops, so things like vine ripe tomatoes, we no longer grow anymore. You don't grow them at all because of labor? Correct. Yeah, there's just that program alone took about 400 workers. And so we just got to the point where we could no longer find a steady supply of labor and decided that we just needed to get out of that business altogether. Deerdorf Farms also got out of strawberries. Instead, Tom has gotten into leafy greens, things like kale, cilantro, broccoli, and celery. They require fewer workers and can be at least partly automated. Where Tom used to hire about 600 people every year, now he hires around 200. But even finding 200 workers has been hard. So Tom made another change. We've also shifted a large amount of our production down into Mexico. So you shifted production of a big chunk of what you do away from the United States and now it's being made in Mexico because you couldn't find workers. Correct. And Tom says when this happens, it hurts the local economy. Fertilizers and boxes and drip tape, different things that we're using, we're now acquiring those in Mexico rather than up here. So the jobs related to those services, those vendors are now in Mexico rather than Ventura County. How hard was it to make these kinds of decisions based on like what you were seeing? I mean, if I was looking at spreadsheets all day long, it was a really simple decision and one we probably should have made five years before we made it. But I mean, these are ranches that my great-grandfather formed and we'd rather keep them active, but the economics and the politics of it are suggesting that we do otherwise. So Tom keeps doing what he can to attract workers, including using that little motorized platform because it means that the workers don't have to carry these giant boxes of celery across the field. So this machine is like kind of one of the ways that you attract the best people? Definitely, yeah. Now you're looking for a competitive advantage in the labor market and this is one way to do that, to provide a work environment that is safer, it's more efficient and it's just slightly easier than what may occur in somebody else's field. Do you worry that one year you're just not going to be able to produce whatever it is that you're aiming to produce because enough people just don't show up? Yeah, we try and forecast that a little bit and we reduce planting sizes and we spread things out a little bit and readjust based on what we feel the labor availability is going to be and then we're constantly looking for innovation to get us the same production with less people. So we kind of attack it on two fronts. Tom says his business has become this constant calculation of how to harvest more with less, how to get more crops out of the ground with fewer hands because in spite of everything, the harvesting machine, the higher pay, the different crops, his turnover rate keeps growing. Fewer and fewer of the same workers come back to his farms every year. On ye gods with Scott Carter here from the faithful, I told my very Catholic mother that she needs to meet Jesus. The faithless. I just so don't believe in God. And the fearless. Serve people, connect with people. That's how we thrive. If life's a mystery, we investigate who done it? I pray that the you and we're God. Listen religiously to ye gods with Scott Carter, wherever you get your podcasts. All right, we are back with our labor economist extraordinaire, Julia Pollock. Julia, what does this story make you think? So when you have a situation where the economy is growing and creating more and more job opportunities, well, then people do find better and better opportunities. And workers migrate out of tough, dirty, physically taxing, sort of tedious, hot sunburn causing jobs like the farm jobs described. And then there's a gap in the market. There's nobody who's prepared to take jobs, this uncomfortable and unpleasant and unsafe, at the wages that make sense for those jobs to be performed. Right. And so then businesses that need those workers to do that work that's really grueling or that's traditionally paid minimum wage, they will often start offering higher and higher wages to hang on to their precious workers. It's in their interest they need to incentivize people to stick around and also to work extra hard. This in fact brings us to a really a really cool concept in economics efficiency wages. Julia, would you mind defining efficiency wages for us? Efficiency wages refer to the case when employers pay higher than the minimum wage needed to fill those roles. In order to retain skilled workers, to increase productivity, to improve loyalty, you may even get more productivity because your workers are healthier. They can eat a better diet. They can wear better clothes. They get sick less often. They get the sick less often. Right. So there are all kinds of benefits. Right. So this is a situation where it's smart and actually profitable for a business to pay its workers more than it has to. There are benefits to paying workers more. In fact, it's like kind of like a win-win. The other thing it does though is create unemployment because there are some jobs where if the employers just paid them more, we wouldn't buy the goods anymore. They'd be too expensive and we would instead buy goods from other countries. There are some industries where if the wage level gets too high, those jobs will go across the border to places with much lower labor costs. Right. And as a country, we're very used to inexpensive food. I was wondering how much would you pay for salary before you're like, you know what? I'm just not going to just not going to buy it. And there's a huge debate to around wages and unemployment. I mean, this is like a hot take in this. This is a very, very controversial topic. Now, this is actually the topic that got me excited about labor economics way back when I was a high schooler. So I became an intern at the Democratic Alliance, a the opposition party in South Africa. And one of the first issues I was asked to explore was the minimum wage in South Africa. I will never forget the face of this woman at this press conference for our, you know, political party calling for a reduction in the minimum wage so that she could see an increase in employment and so that she could take a job. Please, please, please, we need the minimum wage to come down. Why is the government telling me that I can't work? They're telling me that I can't get a job unless I am paid, you know, X amount an hour. And that's so ridiculous because I am prepared to work for less. And I would rather have a job than have unemployment. So in South Africa, we have about, you know, 35, 40% unemployment at any one time. Wow. So in that country, there's a clear example of a place where raising the minimum wage, largely because the population is is not very skilled and educated, highly educated, does cause enormous unemployment. In the United States, most empirical studies show that the effect is much, much smaller and in some places, even the reverse. Why is that? So there are a number of reasons. Many, many of the papers look at the fast food industry and find that when workers are paid more than the minimum wage or when the minimum wage rises, those workers become more productive, more attached to their jobs. Retention goes up. Well, thank you so much. We're coming almost to the end of class and wanted to go over just a few of the concepts that we've learned. Remember, you will be tested on this material. There is a really diploma at stake. So listen up. We've got structural unemployment. That is when people lose their jobs because technology evolves or demand for a certain product or service changes. There's also cyclical unemployment. That is job losses that tend to happen along with the ups and downs of the business cycle. We've also got efficiency wages. That is a moment when it becomes advantageous for companies to pay workers more than they need to. Well, before we go, I'm especially excited about this because Julia, I know you are a big music lover. We are doing our latest edition of Econ Songs of the Summer, Employment Edition. Julia, what is your labor and job song or songs? Oh, boy. I think, you know, this year has been the year of record quits rates and people trading up and leaving unpleasant jobs is Johnny Paycheck's song. Take this job and shove it. I ain't working anymore. You got to love a country song. Exactly. All right, class dismissed. We will see you next week when we will be talking trade, t-shirts and we will meet an actual living breathing relative of John Maynard Keynes. Planet Money Summer School is produced by Audrey Dilling with Help from Great Morton. It is edited by Alex Goldmark, Engineering on this episode by Josh Newell. Our project manager is Devon Meller. I'm Stacey Venick Smith. Planet Money is a production of NPR. Thanks for listening. This week on NPR's Threwline, why America might not exist without the mosquito. She deserves to have her nice proboscis between Washington and Jefferson on Mount Rushmore. Listen for stories from across 250 years of American history, on America in pursuit. Every Tuesday in the Threwline feed, on the NPR app, or wherever you get podcasts. This is Tanya Mosley, co-host of Fresh Air. You'll see your favorite actors, directors and comedians on late night TV shows or YouTube. But what you get with Fresh Air is a deep dive. Spend some quality time with people like Billy Eilish, Questlove, Ariana Grande, Stephen Cobair, and so many more. We ask questions you won't hear ask anywhere else. Listen to the Fresh Air podcast from NPR and W-A-Twirebot.

Podcast Summary

Key Points:

  1. The story discusses the impact of technological advancements on the labor market, leading to a divide between high-skilled and low-skilled workers.
  2. Maddie, a low-skilled worker, faces challenges in advancing her career due to technological changes and the need for higher skills.
  3. Structural unemployment occurs when workers' skills do not align with the demands of companies, leading to job losses and economic challenges.

Summary:

The transcription delves into the effects of technological progress on the labor market, exemplified through the story of Maddie, a low-skilled worker facing job insecurity due to automation and the demand for higher skills. The narrative highlights structural unemployment resulting from the mismatch between workers' abilities and market needs, causing devastating impacts on individuals and communities. It emphasizes the importance of providing opportunities for individuals like Maddie to acquire new skills and thrive in a changing economy.

The discussion underlines the significance of addressing the imbalance in the labor market and potential solutions to support workers in adapting to evolving job requirements, ultimately aiming to mitigate the adverse effects of structural unemployment.

FAQs

The race between education and technology refers to the replacement of low-skilled jobs by technology and the creation of high-skilled, specialized jobs for educated individuals.

Structural unemployment results from a mismatch in the skills workers have and the skills companies need, often due to technological changes or industrial reorganization.

Structural unemployment can devastate workers and entire communities, as seen when manufacturing jobs moved overseas, leading to long-lasting effects.

Individuals like Maddie can overcome structural unemployment by acquiring marketable job skills through affordable and convenient education and training programs.

When companies cannot find enough workers, it can lead to issues like a tight labor market, skill mismatches, and difficulties in filling low-wage, grueling jobs.

A mismatch of skills in the labor market can occur when companies require workers with specific skills that are in short supply, leading to challenges in hiring and growth.

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