Job market hollows out in the middle

A Harvard professor says it's because more Americans are shunning risk that could bring rewards.

By MSNMoney partner Jun 7, 2012 2:56PM

"The U.S. labor market is becoming more sclerotic."


That's the take of Harvard University Professor Lawrence Katz, a former chief economist at the U.S. Labor Department, who sees a major "hollowing out" of the middle of the job market.


Americans are becoming less and less inclined to take a risk in the job market, to move to another house to accept a new job, or to start their own businesses.


The concerns of U.S. economists and educators are piling up into a possibility once unmentionable in American politics. The USA may be becoming more and more like Europe.


Steven Davis at the University of Chicago ticked off the similarities to Bloomberg's Rich Miller: "Higher unemployment rates, longer unemployment spells, steep falls in the employment rate in the working-age population, a slower pace of worker flows, and a slower pace of job creation and destruction."


Read Miller's dynamic piece with anecdotes and stats from employers and job seekers here.

More from Bloomberg

Jun 12, 2012 11:17AM
and this president believes the private sector is "doing just fine" ......  I guess it looks that way to him when he can take million dollar vacations on the taxpayer's dime.
Jun 11, 2012 12:15PM
I agree on the fact the US is looking more like Europe. It is called taking from those who produce and give to the non producers. The US has now reached the point where 50% of the individuals filing federal tax returns pay ZERO income tax. And a very large majority receive refunds through Earned Income Tax credit and other refundable credits. The government has created such give away programs that many people are better off not working than working. Why work if you can get free housing, food, medical, cell phone, lunches for kids, even during non school days, and etc. I beleive in helping those in need; however, th help should not include air conditioned housing, cell phones and other comforts.
Jun 10, 2012 3:14PM
The nanny state will soon run out. No different now then in 60's. Take responsibly, move take job!
Jun 11, 2012 9:49AM
Why risk?...QE, Debt, money printing...I'll sit this one out on the sidelines buying up precious metals. People will look back at these times and wonder why everyone was so stupid and couldn't see the light of day. People w/o a job can do better than those with a job if they are investing in real Get a job after the depression.
Jun 19, 2012 10:15AM

Let's face it, employment will not return to how it was prior to 2008.  A lot has changed with the great recession.  Self employment sounds logical, however in this economy, I would think that it would be a extremely risky proposition.  Banks are not that receptive to lending to small businesses, even with Obama's stimulus funding.  It would appear to be more practical if one had some money to sink into a self employment venture besides for bank financing, that it would be to their best interest to place the money in a secure IRA.  American is not treading in a strong and vibrant economy.

Jun 15, 2012 1:29PM
Actually I know many people who are starting their own businesses.  It seems to be the only way to avoid minimum wage and dead end jobs. Sad to say but the stratification of jobs reminds me of several communist countries that I visited in the 1980's with more of the resources being used by a smaller percentage of the population.  Europe has and always has had a safety net for their people.  They take care of all their population.  That type of economy is called socialism and we are not even close.  Ask any Senator or Congressman what he has done for his voters and he will show you a check from a large corporation or some rich privledged individual.
Jun 14, 2012 4:52AM
many folks are still hedging their bets and their investment capital until the Marxist Mulatto is out of the White House...  the house of cards needs to collapse and it ain't going to be pretty when it does.... it'll be good to be fat with cash when the banks close..  stand on the sidelines for maybe 18 more months.. see what the next COngress and Mittens can do to slash government spending...  this is one time we really could use a guy like ron Paul.... just not running the entire show.
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