Labour market trends in the United Staates

Abstract

"Over the last few years the US has enjoyed one of the lowest levels of unemployment among western industrialised nations, although unemployment has been considerably higher for young people and certain ethnic groups. On averange, Americans remain jobless for much less time than Europeans. This may be attributed to two factors: firstly the US social system offers far less protection than in western Europe. This means that there is considerable pressure to find a job in the US, even at lower pay. At the same time, the range of job openings is broad. The ability of the US economy to constantly create additional jobs and to integrate a growing number of people seeking employment into the labour market is remarkable. The fact that employment has grown more in the US than in Germany cannot be explained by superior economic growth: the economic growth has produced a higher employment intensity. Americans continue to work long hours and the figures for parttime employment have not changed. The national income must therefore have been divided among more people. It is certainly true that even though average wages have stagnated, there has been a further increase in the wage differential between the upper and lower income brackets. Most growth in employment is concentrated in the services sector where income ist often either low or in some cases well above average. In the future, an above average increase in employment is also expected for activities that require highly qualified personnel. The cost of this positive employment trend in the US has been high - increasing wage disparities, social inequality and high levels of poverty. Therefore Europe should not follow US trends indiscriminately. General wage restraint, redistribution and greater flexibility of working hours can also stimulate emploayment. Lower starting wages for certain categories, or waiving social security contributions might improve the chances of the less qualified of getting a job. Similar proposals in the private services sector might achieve the same end: some of the wage costs could be offset by tax breaks. A negative income tax for low earners might be another option." (Author's abstract, IAB-Doku) ((en))

Cite article

Werner, H. (1998): Labour market trends in the United Staates. Lessons we can learn. In: IAB Labour Market Research Topics No. 25, p. 1-29.