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It's crowded at the top: Freakonomics Radio

Job seekers crowd around the California Employment Development Department table to get information on available jobs.

The April unemployment numbers come out this Friday, after "weak" figures in March. But Stephen Dubner says there may be a larger, hidden side to the month-to-month swings in joblessness.

A "great reversal" in demand is what economist Paul Beaudry calls it. In the 1990s, there was healthy growth in jobs requiring a lot of education, and cognitive or technical skills.  

"Then you start noticing that it has plateaued in 2000, even though more and more people are getting educated," Beaudry says. "It should have kept on going."

The result is that those high-educated workers are forced to take jobs further down the labor ladder than they were hoping for. What happens to the people who used to take those jobs?  

"We started noticing all this cascading," Beaudry says. "I wouldn’t want to exaggerate -- it’s not like everyone is getting a barista job, but that’s exactly the feeling. It’s kind of like this pushing down."  

So highly skilled workers go for the jobs of the lower-skilled. At the bottom of the ladder, workers can be pushed off entirely, into unemployment.

The effect has been masked, in part, by the financial crisis. Beaudry says things like banking and housing sectors may continue to improve, but this "cascading" will endure as a fundamental force dragging on the economy.

There may be a silver lining to all of this, before you get depressed.

With this recent push down the labor ladder, many highly trained and highly educated workers are going into the classroom.  

This year, Teach For America received 57,000 applications -- the largest pool of interest in its history. On average, the program signs up fewer than 15 percent of those applicants, making it even more selective than many of the elite colleges where its new teachers graduate from.

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Woaw, No Kidding!!!! Thanks for the update!

I seriously wondered what the hell was going on circa 2000. I had been a member of Bell Labs, and other High Tech teams, thereafter. And, had little problem regaining employment up until ~2000. However, the whole dynamic changed at that time, and it became harder, and harder to even manage interviews with tech management at respected organization, at that point; anywhere is the U.S.. I got tired of having to deal with the mega-agglomration of d**heads, at other less than respected organizations, and stopped looking, theafter.

As, I believe that I was (still am) a proficient technologist, capable in the production of software engineering, and related byproducts; I had only managed to garner an undergraduate degree. Thus, it helps to know that I had been in direct competition with the more highly educated, and experienced of the worlds tech work force, for the jobs in the Tri-State Area that only should have been garnering applications from other, similarly skilled, as myself. Of course, this is 2013; it would have helped if this exact sort of 30,000' examination could have been made more obvious, in the year 2000/2001!

At least there is now a reasonable explanation for what actually happened at the time. At least I can now point the woman that I had met in the SUNYAB Comp. Sci. lab, married (but had to separate), and our children to regarding the situation.

Comforted with the warm interactions that I am now having, as I talk my computer asleep at night (http://www.marketplace.org/topics/tech/siri-meet-your-new-competitor-goo...), and awaiting commodity brain implant pricing (http://www.marketplace.org/topics/tech/googles-ray-kurzweil-computers-wi...), to be too, classified a Robot; in order to become re-employable ...

Cheers!

I've seen this in full effect in my daily life. It isn't good enough to just have a STEM degree and you get a job, we're primarily recruiting in the top tier universities so some of those graduates will get jobs in their field, but I'm seeing other fully qualified people fallin gby the wayside having to do tech support jobs and the like that previously wouldn't have ever been able to command a degreed worker.

Also, there is no shortage of STEM workers, just a shortage of low cost STEM workers. This is what the H1B program is all about. It's like saying we must have a shortage of doctors because I can't find one any good that will work for $20/hr.

Wait, how is this a silver lining? You have highly educated grads entering the workforce expecting high-paying jobs, saddled with enormous student debt and they are earning a teacher's salary... That is wage slavery - not a silver lining. Nothing against teaching but the reality is that it pays poorly and garners almost no respect--more like enmity. Our system encourages greater and greater levels of education and the accompanying debt. Sure, it is the student's choice but govt and higher ed industrial complex keep pushing more degrees. It sounds like profiteering on the hopes and dreams of youth. And then there is the H1B issue...

The presumption of a correlation between entry into Teach for America and the desire to be a teacher is an untested assumption at best. My understanding is that Teach for America is a pipeline to Goldman Saks for elite students. So, please find us another silver lining before we all drown in depression!

America should have its house in order in the future, because there will be fewer jobs available to all Americans and more Americans who want jobs.

Smaller countries, such as Denmark and Finland, see a niche in the global economy and fill it. America is more of a free-for-all, where there is a class of world-class winners, and many, many losers. Is there a place for people with only a high school education in a world where everyone has a Bachelor's degree? Most Chefs in NYC nowadays have Bachelor's degrees, it seems.

--We should stop immigration to the US so only those who can contribute to the tax base are allowed in.
--Robots will render many more jobs obsolete, rendering many of us who do not have Masters Degrees or Higher unemployable in any professional sense.

There will be riots and poverty. Politicians should fear that. Taxing the Uberclass of Googlites, Health Professionals and people who make six figures should occur so we don't become India. I think we're on our way now.

During the worst parts of the recession, the flow of newly minted undergraduates to NYC dropped off as they realized there were no jobs to be had here at any price. The situation is still the same. Most of our waitresses have MFAs from Juilliard, it seems.

What do we get for having an open economy, filled with a growing population? Dwindling opportunities with fewer jobs. It would be better to control what few opportunities we DO have for people who were born here.

If this report is valid then why are we increasing the H1B quota? In the light of this research shouldn't it be reduced and made a lot more restrictive, e.g. only for people with PhD. This article supports what professor Hira has been testifying infront of the senate panel. Can you get one of the senators on your program and ask this question?

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