The Foundation's U.S. 2010 project has released a new report on the major structural changes in the American economy between 1979 and 2010. Written by Harry Holzer and Marek Hlavac, the study includes data on labor market trends for the past decade and the Great Recession. Here are some of the report's main findings:
• In general, between 1979 and 2010, women and/or more-educated workers gained the most in earnings and employment while men and/or less-educated workers gained the least (or actually lost groundin some cases). Within these groups, workers at the top of the earnings distribution gained the most compared to those at the middle or bottom, reflecting dramatic increases in inequality.• Dramatic decreases in employment in manufacturing and in production and clerical jobs, relative to higher and lower-paying categories, further reflect important structural shifts in the demand for labor. But significant employment growth in other industries (such as construction and health services) and occupations (such as technicians) indicate a still substantial middle of the job market exists for those with appropriate skills.
• Of the four recessions that occurred during these three decades, two were quite mild while the other two were quite severe – especially the Great Recession of 2008 and beyond. Very large increases in unemployment rates and durations have occurred in the recent downturn, and were experienced primarily by less-educated, younger and/or minority workers – who had already experienced relative declines in their earnings and employment over the past three decades.
RSF grantees Eileen Appelbaum and Rosemary Batt have released a primer on the private equity sector and its impact on the American economy. The report, published by the Center for Economic Policy Research, examines private equity's effects on jobs, management decision-making, and the sustainability of productive enterprises in the U.S. Here is an excerpt from the report's introduction:
Our examination of widely cited studies of private equity helps to illuminate some of the major controversies over private equity. On employment impacts, for example, we examine the most rigorous empirical evidence, the widely cited National Bureau of Economic Research (NBER) study of the effects of private equity on employment. It finds a “clear pattern of slower growth at [private equity] targets post buyout” – a differential that cumulates to 3.2 percent of employment in the first two years post-buyout and 6.4 percent over five years (Davis et al. 2011:17). This slower growth, the researchers note, “reflects a greater pace of job destruction” at firms taken over by private equity post-buyout than at comparable establishments (2011:18). They nevertheless conclude that employment growth at private-equity-owned firms is only slightly slower than at other similar companies. They reach this conclusion by calculating not only the net effect of employees hired and fired by the private equity owned company, but also by adding in any employees in businesses that the company acquired while it was owned by PE. The jobs of these acquired employees, however, are not new jobs in the economy and clearly were not created by private equity.