 In the near front, Zanetta, thank you. Hi, my name is Judd Harriet. I have a question for Larry. I'm intrigued that you're a conclusion that there's no skills gap and that inequality is not about lagging education. Can I draw you out a little bit more on this, because it flies in the face of a lot of conclusions that labor mobility, not intergenerational mobility, but labor mobility is stifled by skills deficits. Labor cannot move into more dynamic sectors. Thank you, great thing to expound on, Larry. Yeah, well, thank you. Yeah, this is a important question. What is the role of education and more skills? So let me say that we can distinguish between things that promote individual mobility and things that are going to decrease inequality. So I believe that getting more education and training and getting as much skills as you can is something that is really important to provide for every working class, young person, or even working person, as much as they can get, and that they will do better the more education and training and skills that they possess. And that will increase their mobility into a better strata. On the other hand, I don't believe that the reason why high-wage workers did a lot better than middle-wage workers is that middle-wage workers didn't have enough skill or education. And let me just give you an example of that. The usual story is that the wage gap between, let's say college-educated workers and high-school-educated workers called that the college wage premium. That grew and that pushed up wage inequality. If you look at the data we present in the book and you look at the periods of 79 to 95 and 95 to now, and there's no picking and choosing of dates to get the result, but it's basically dividing up the last 30 years into 15-year portions. The gap between the top and the middle grew pretty continuously and strongly. It grew not as strong in the second period as the first. But in the first period, the gap between college and high school grew a lot. In the second, hardly at all. So it's just prima facia not true that the education wage gaps could possibly have driven overall wage inequality over the last 15 years. And it's also true that if you look at the wages of workers with higher education, you will find that workers with an associate degree, which we can only get back to 1992, earn no more now than they did in 1992. And that workers with a college degree that the bottom 70% of college graduates earn the same or less now than 10 years ago. So what this means is that you're better off if you're a college graduate than if you're not. But the fact of getting everyone a college degree is less of a guarantee for expanding the middle class as people say or maybe it once was. Thank you. Okay, we'll go to a question in the very back. But I'm glad to follow up with this later. This is a very important and complicated question. My name's Tanya Hutchins from the Machinist News Network. You mentioned empowerment and doing things a different way. How can workers do anything if they can to change the status of collective bargaining compared to past years? Our resident expert on collective bargaining and unions. Well, you know, it's going to take a lot of different things to be able to expand collective bargaining. It's going to take changes in the law. It's going to have to take changes in what unions do and what workers do. We know that prior to this recession, there were a very large amount of the workforce. Wanted to have the benefits of collective bargaining, but they weren't able to. And that we have a paper by Richard Freeman of Harvard. He's really the preeminent labor market economist in the world, in my view. And if every worker who wanted collective bargaining got it, we would have unionization rates comparable to Germany. So the question is, you know, what can make that happen? Part of it is that, you know, people are very brave to see collective bargaining. I think we need to assure that everyone has that right. People should seek it. They should call the machinists. They should call, like, warehouse workers around the country are doing now, et cetera. But it's not something that is just about their benefit. It's part of restoring labor standards so that as employers seek to make better profits by worsening job quality. What we really want is an economy where employers are competing to make better products that people want more efficiently, but not spending a lot of time thinking about how to find ways to pay their workers less or to give people more economic insecurity. Go to a question over here. Well, since you're there, it's fine. Debbie Chalfee with AARP, another group that didn't get a fact sheet. But I forgive you. We'll talk about that. Yeah, given the aging of the workforce, I was wondering if all of you could maybe comment on one or two of the findings that struck you as you were doing this year's book about older workers, either good or bad. Thank you. One thing that really jumped out was the importance of Social Security and Medicare for older workers. I mean, at least touched on it. But it's just astounding how much of a share of their income and growing that that made up over this period. And so underscores why we need to make sure that those things are not cut back dramatically. Do you want to? Yeah, anything else? Also, in the poverty chapter, I talk about the extent that Social Security has, the role that Social Security has played in reducing elderly poverty. We saw in the numbers that came out last week, again, as the group that has the lowest rates of poverty, and I think we can attribute that mostly to Social Security. Dante, we've got a couple of questions here, so we can just keep it here for these two folks. Carol, I'm Poplin. You haven't said anything about automation and the information revolution. I mean, I'm told that it takes a small fraction of the people it used to take to turn out a car. Now, that's making them more productive and they're not getting the results of their increased productivity, but it also means fewer jobs, fewer... Well, fewer jobs of the kind that there used to be. Alright, so comment on technology's role in all of this. Yeah, so, I mean, technology implemented in the workplaces increases productivity, and in fact, it means over time, and it happens differently in different sectors, right? So manufacturing productivity is greater than the service sector. And what that means is that the relative prices of manufactured goods tend to fall relative to services. You have more productivity, and we don't have a system, nor should we, where the wage growth in a particular sector matches its productivity. Otherwise, someone who's a barber would be making 15th century wages, right? Because it takes so long to cut ahead that it doesn't get that much more quickly. So the fact is that the technology is not... That technology allowing us to produce more with less is not something, in my view, that has hurt the broad working class. It is the fact that overall, on average, we haven't had the wages grow with it. So with the trend you're talking about, that's true. That means over time, the prices of cars are going to be lowered relative to other things, which helps expand the market for cars. But it might not expand it enough to be able to maintain employment in the auto industry, which means over time, you're going to have a shrinking share of employment in auto. And there's nothing wrong with that. The problem in our society, in our economy, is that there's been such a gap between manufacturing wages and services. In other nations, there's not such inequalities across sectors. So it means that if you don't get the manufacturing job, you're most likely going to have a worse job. And the second thing is, in our economy, the very basic things that a family needs and a worker needs are tied to your employer. Still, somewhat, whether you get healthcare, whether you get a good pension, whether you get vacations, whether you get sick leave, family leave, all those different things are tied to your particular employer. In other nations where that is universal, you know, which industry you work in doesn't matter that much, because this is a right of citizenship. You're a producer, you get those benefits. Categories of jobs that have disappeared. Like, I'm an attorney, there are no typists, there are no secretaries. All those jobs, even some lawyer's jobs now, are going overseas. So jobs are disappearing. There are jobs disappearing, but in my view, some of that is part of a phenomenon which generates jobs other places, because things become cheaper to produce in those places where you have labor-saving technologies. The whole issue of offshoring and imports is a different topic. If you put that on slide 21, I think this is a good thing, a good time. It's just a long trend of productivity there. Is that the one? This, I think, is useful to keep in the back of your head when you hear about increasing productivity, because it always increases. The economy is always evolving. We're always seeing technological change. It's just a constant in the economy. It's not obvious that in recent years that we've been off that trend very dramatically. When you hear this narrative about technology, to keep that in your mind of is it different than this long-term we just always have an evolving economy? That productivity growth is the potential for living standards growth. Keeping that trend in the back of our minds when we hear this stuff is probably a good idea. Sir? Jerry Dantzis. This has been wonderful. Actually, things are terrible, but exposing it is wonderful. Is it possible to quantify some of the absolute damage that is happening to people? Because I got the impression, say, if you look at the middle, that the wages have basically stayed the same. But I know that housing and rental costs have gone way up. And that college tuition, say, at state colleges has gone way up. So does that mean that if you took a middle person, middle family today compared to, I don't know, 30 years ago that they're living in less quality housing or that previously they could afford to send several children to the state university, but now they care? All the data trends we present are inflation adjusted, which means that we take into account what BLS says is the price changes in what people purchase. So there can be lots of arguments about what's included, what's not, whether it's quality adjusted and the accurate and all that stuff. So a lot of the things you mentioned are included in that. But I think it is daunting what's happened to housing prices, what's happened to access to college, et cetera. And I think those are really important things. I just want to be clear. I want to maintain that the living standards of a middle class family is less now than 30 years ago, because I think that's a fruitless debate, whether it's up, down, a little, up a little, et cetera. Given that productivity grew 80%, the question is why did it not and that every family and their families on average are working more hours, the question is why did they not do a lot better? So I just want to differentiate on that score. Okay, we have a question over here. Kelly. Kelly Ross with the AFL-CIO. On one of your early slides you had long-term projections by the Congressional Budget Office of Employment. And I thought it was interesting that the unemployment rate settled at a higher level with each projection. And I wonder if you could comment on what's going on there. I think what's going on there is that they are changing their estimate of what the natural rate of unemployment is. And I wonder if you agree with that and if that is the case, it never settles back at a rate that it was before the Great Recession. So we're never going to get back to that rate because part of the problem is the need to change our policy on full employment if we can do that. If the economics profession has changed the estimate of what the natural rate of unemployment is. Good question Kelly. Well I think there's two things going on. One is that they've been continuously wrong is what that says. That they have been optimistic as to what's going to happen continuously. They're going to push out when they think we're going to get back to what they are considering full employment. The second thing is that they have raised what they consider full employment and that's in our view they're mistaken as to what we can expect as full employment. They may be saying I don't know five and a half six percent. We know that it's been four or four and a half percent. They may be increasing that. The other thing that you can notice in those projections which is part of all these macro models is that it always comes back to whatever they consider full employment they make it seem as if the economy is like automatically going to revert to that. That it gets back to that equilibrium. I would challenge that. The mechanisms in play are not necessarily going to restore unemployment even at that bad level. The model always automatically just goes down after a few years. It just reverts at some level back to full employment and that is wrong. I don't actually believe there's any reason why that I expect that to happen and I certainly think that a future policy battle is going to be defining what is the unemployment rate that's achievable and the unemployment rate with what share of the labor force working because also embedded in these numbers is the CBO assuming that a lot of people who left the labor force never come back and we think that that's wrong. Also another thing is I don't really know exactly why this is pushing up but I think they have some hysteresis thing going on that persistent high unemployment leads to higher unemployment which there's an open question here. I think the bottom line here is the vast majority of the persistent high unemployment we have right now even by these estimates is demand. Their structural rate is still far far below where we are now. As far as what we think of doing right now it doesn't matter that it's crept up a little bit though it will matter in five years. It will matter in five years. When there's periods of persistent high unemployment there's always economists coming out saying this is the new normal like that's what we hear after periods in this country and around the world that's what you hear by economists after periods of persistent high unemployment what we have today is a demand problem. We're going to do two more questions. Dante this gentleman and then Zanetta this gentleman in the front thank you. Jack I'm very tired federal service. One thing you haven't mentioned is disintegrating the American family which has had a huge impact the median family income of two parent families has been doing not so badly but there's more and more single parent family and also the interaction the higher the income the more stable the family the lower divorce rate. Denise you alluded to some of this and I think in your part of the conversation this morning or it could be conflating others but just the impact of hours and changing dynamics into the labor force so you want to first crack? I think this falls into the poverty chapter and there's actually a section precisely because this question comes up so there's a section on what has led to increasing poverty and what we find primarily it's growing in community quality because it's not just like family formation it is not changing dynamics of racial composition in this country poverty has gone down because of changing composition of education and poverty has gone down because of growing economy but poverty has gone up primarily because of income inequality and it's true when you only have one earner and a family they're going to earn less that's a fact you have two potential earners they're going to earn more and families have more potential to have higher wages and higher incomes but when we think about what is moving the poverty rate at least in recent years it has not been a change in family formation Last question in the afternoon This has been a lot of debate over the role of housing in the recovery and it's always occurred to me that it's the housing industry that seems to have the most interest in this and not so much the typical household I was wondering if you have any thoughts as to how much attention policy attention should be played to trying to help the housing industry as part of an effort to encourage economic recovery The person who knows the most about this is not here but I have Do you want to go ahead? Go for it So one of the things is I don't think it's the big lever that we should pull Correct me if anyone thinks that we should anyway correct me if I'm wrong It's not the big lever The key thing right now is that we have a demand problem that if we if you for example got all houses who are underwater if you just erase their debt you have a sort of balanced budget multiplier problem that debt is someone else's asset so it's not actually going to be and you have to have some pretty extreme differences in propensity to consume out of that money for it to have much stimulative effect on the economy So given that right now the massive problem that we have is a lack of demand I don't think that wouldn't be in my top list of things to solve that problem I'd be a little more encouraging about I mean I don't I mean I don't consider you are a housing expert Greg I am not but it is seen to me that we if you take the position that the things that as a drag on the economy is the so-called deleveraging that is that people are more in debt they want to be in there for their consuming less and that that's a drag on consumption growth and that comes from the fall of housing wealth as well as stock wealth that that would be a useful thing it's one element of policy agreeing that we could do something to have the housing crisis be less of an albatross around the economy and it would help us lift off that much better and one can even get angry you know why is it that we build out Wall Street but we have left out the many people that Wall Street sometimes tricked into untenable mortgages and they're left to drown And behavior really certainly people who believe that their home values are solidified and even in fact realizing behavior a lot differently than people who believe that the floor is still not yet out from under them so that also has a deep economic impact with that unfortunately we have to stop thank you all for coming if you have any other questions I want to engage and chat with the authors they're here and they're at the back of the room so you can corner them feel free to do so otherwise we'll look forward to seeing you later