Secondary Sources: New York City Jobs, Soda Bans and America’s Fertility Rate
By Neil Shah
A roundup of economic news from around the Web.
–New York City Jobs: Jason Bram and James Orr look at new York City’s puzzling job-market gains. Employment in the big Apple has rebounded strongly, reaching 3.86 million, the largest number of jobs ever recorded. yet the city’s unemployment rate is actually rising and stands at 10%–higher than the 5% seen before the economic crisis. Diving into the data, there’s a yawning gap between city job growth (based on surveys of businesses) and numbers of employed residents (based on surveys of people)—a gap that’s becoming more pronounced and raises serious questions about how strong the City’s recovery really is. Bram and Orr, both at the new York Fed, explore three possible explanations that could be juicing the first measure of employment (which tells good news) while leaving the second measure cold, namely, 1) new jobs could be going to people commuting into the city; 2) the economic crisis could’ve pushed the self-employed into jobs at businesses and 3) people might be holding multiple jobs. While these three factors are indeed handled differently by the two employment measures, the authors don’t find them satsifying answers to the conundrum. “The stagnation of resident employment remains largely a puzzle,” they say.
–Soda Bans: James Surowiecki takes up Mayor Michael Bloomberg’s controversial policy of banning large sodas. While the new Yorker columnist agrees Bloomberg’s latest public-health policy smacks of a “nanny-state mentality,” he provides three solid arguments for why the change is for the better. (It’s not just new York tinkering with soda policy: 30 states, including Texas and Iowa, levy a sales tax on purchases of sweetened drinks to curb obesity and raise money.) Surowiecki says consumers tend to stick with “default” options, so if you make a smaller soda the default option, we’ll bite. And be healthier. second, a consumer’s idea of what’s sufficient depends significantly on external cues, not just his or her belly. You eat more when you are given more. Period. And restaurants have definitely been giving more. third, our feelings about our choices – not to mention our sense of what’s socially acceptable and satisfying – changes based on context. If everyone is drinking 32-ounce sodas, and I want to be healthy, I might go for 16 ounces. But if everyone is drinking 16, I might eschew soda altogether. the real debate, for economists at least, is how to construct effective “nudges,” in other words, whether to go with outright bans like Bloomberg’s or the kind of higher taxes we use for, say, alcohol.
–U.S. Fertility: In a surprising bit of demographic news, the Economist discusses how America’s fertility rate quietly fell below 2.0 in 2011 and is now running at 1.9, below France’s and England’s. for years, America has been notable for being one of the few rich Western countries with a total fertility rate above the “replacement rate,” meaning the level at which we’re replacing people who pass away and keeping population stable. Turns out we’re more like Japan and Scandinavia than we thought, which has repercussions for America’s health and fiscal policies, since all this means fewer young people around to pay for the retirements and health problems of the elderly. the culprit? The weak economy, for starters, which means less migrants finding work and staying in the US, and having children. Also, lower incomes have young people putting off marriage and kids.