Workers at the Bottom Are the Last to Gain
Only after an expansion is well underway does everyone benefit.
Catching up.
Photographer: Brian Harkin/Getty Images North AmericaLIFO is an acronym used in accounting and finance that stands for “last in, first out,” meaning the last goods or securities bought and added to inventory will be recorded as the first sold. But the term could also apply to disadvantaged workers in the U.S. labor market. In recessions, workers with low education levels and those from disadvantaged minority backgrounds are often the first to be fired when a recession begins, and the last to be hired in an expansion.
Just look at differences in unemployment rates by education. The gap between high school dropouts and people with a bachelor’s degree and higher tends to widen during and just after recessions, remain high for the first few years of an expansion, and then narrow: