The Workweek: A Round-Up of Labor Market Links for the Week Ending 3/3/17

Welcome back to The Workweek, the Indeed Hiring Lab’s round-up of the latest research, news, and perspectives that made us think deeply or differently about the labor market this week. It’s your guide to the most important new insights about work.

Here are our picks for this week:

Healthcare Reform and the Risk of “Job Lock”

As the US government ponders repealing the Affordable Care Act (ACA) it is important to consider the consequences.   Writing in The New York Times, health economist Austin Frakt points out that the subsidies and protections of the ACA make it easier for people to retire before age 65 who would otherwise have to wait until they qualified for Medicare.  Given the tightening labor market in the US and the aging of the population, it might be desirable to deter early retirement — but limiting access to healthcare could also create “job lock” where people stay in jobs they don’t want just for health care coverage. (The Upshot). 

Taxing the Machines

The debate over Bill Gates’ recent proposal to tax robots that take human jobs continues. This week Noah Smith weighed in with the case against. According to Smith, taxing robots would likely slow innovation and thus drag on the economy, leaving a smaller economic pie to go around.  Even in occupations where robots are replacing rather than complementing human workers, other redistributional policies would likely work better.  (Bloomberg View

More Evidence of Tight Labor Markets

Here’s another way to test labor market tightness: Examine the creative ways companies are developing to attract talent.  This is particularly visible in the tech sector where pay is already high so firms are innovating in order to lure skilled workers.  Some are targeting the young by encouraging teens to develop coding skills, while others gamify the recruiting process — for instance, by using approaches such as sending encrypted Tweets to attract cryptographers. Still others focus on hiring an “attractor,” such as an influential author, to draw potential candidates to the team.  Since not enough students are graduating college with computer science degrees, this suggests hiring challenges will continue— as will attempts at finding creative ways of overcoming them.  (WSJ)

Robo-nurse Will See You Now?

In Japan, the double whammy of a quickly aging population and a shortage of qualified nursing staff has led the government to provide substantial subsidies to develop elder-care robots.  Unfortunately these automated nurses are far from ready to provide the level of care required, and likely won’t be for several decades (despite the admittedly great action photos of the Robear prototype). As a result Japan is exploring other ways to mitigate the nursing shortage including encouraging more women and even the elderly themselves to become nurses.  President Abe even suggested raising the birth rate— which gives a sense of how long he thinks it will take before robots are ready to become carers.  One other solution could be to boost immigration from nearby countries where there are available nurses — but in Japan this remains a policy challenge. (Foreign Policy

Problems on the Periphery

We’ve long known that the labor market’s on Europe’s periphery (which includes Spain and Italy) continue to struggle, but it’s still dramatic to see the unemployment rates of these countries compared to those of the UK, Germany, and the US. Spain and Italy both still have unemployment rates well above what they had before the global financial crisis whereas the UK, Germany, and the US have all converged to around 5% which is near —or in Germany’s case notably better than — 2007 rates. The same pattern is shown in terms of output in the different countries:The UK, Germany, and the US have all exceeded their pre-recession economic output, but Spain just recently matched their 2007 output and Italy still isn’t there yet.  (St. Louis Fed)

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