Overall, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers. Our estimates suggest that an increase of the minimum wage by $1 (based on 2015 dollars) decreases the share of lowskilled automatable jobs by 0.43 percentage point (an elasticity of −0.11). However, these average effects mask significant heterogeneity by industry and by demographic group. In particular, there are large effects on the shares of automatable employment in manufacturing, where we estimate that a $1 increase in the minimum wage decreases the share of automatable employment among low-skilled workers by 0.99 percentage point (elasticity of −0.17). Within manufacturing, the share of older workers in automatable employment declines most sharply, and the share of workers in automatable employment also declines sharply for women and blacks.
Self-driving vehicles have the potential to reshape a wide range of occupations held by roughly one in nine American workers, according to a new U.S. government report.
About 3.8 million people drive taxis, trucks, ambulances and other vehicles for a living. An additional 11.7 million workers drive as part of their work, including personal care aides, police officers, real-estate agents and plumbers. In all, that’s roughly 11.3% of total U.S. employment based on 2015 occupational data, according to the analysis by three Commerce Department economists.
The youth deficit also seems to be spreading to the post-millennial generation. Due, in part, to a dearth of new families, California’s new generation is actually shrinking the potential workforce. Between 2013 and 2025, the number of high school graduates in California is expected to fall by 5 percent, while Texas, Florida and North Carolina experience gains of near 10 percent or more. With a shrinking birthrate, as well as diminished immigration, the L.A. region could experience a continual decline in its workforce.
These trends should alarm employers and businesses who depend on growth in workers and consumers. A rapidly aging population, by its very nature, adds less to economic growth and innovation, while spending less on housing and consumer goods. Southern California politicians, seemingly more obsessed with sporting events and climate change than economic reality, need to address the fundamental housing and employment issues undermining our demographic future.
While Storper, et al, compare Los Angeles to Detroit, there’s also another analogy. A century ago, Detroit was the Silicon Valley of its era, attracting enormous entrepreneurial talent and venture capital, and creating an entirely new industry — cars — that became global. But it took its dominance for granted, ignored its economic fundamentals and was devastated by leaner and meaner rivals.
The same fate could befall Silicon Valley if its traffic and housing problems continue to fester, encouraging the brains and the money to shift to more hospitable and lower-cost climes, particularly those in other states. Already, says Robert Kleinhenz of Beacon Economics, the Bay Area’s economic growth “is being constrained by a lack of affordable housing and a lack of skilled labor. These factors are having a disruptive effect on the job market.”
“The traditional view has been that the license is just a barrier to entry,” said Clemson University economist Peter Blair, who co-authored the paper with Clemson graduate student Bobby Chung. But, he said in an interview, licenses also provide potential employers with information about the workers who have them: Many require special training or bar people with criminal records.
The study suggests women are rewarded because a license signals training and job skills, while black men benefit when a license signals they don’t have a felony conviction.
“Licensing may not be the most efficient way to convey this information, but we need to acknowledge that licensing is providing this information,” Mr. Blair said.