The Jobless Recovery

Washington Post ^ | 1/27/04

[Tumbleweed_Connection]

...This is not the first jobless recovery. In 1991-92 the economy grew steadily, but job growth was almost nil. The reason for such recoveries, as a study by the New York Fed argues, is that the structure of the economy is changing faster than previously. In the 1970s and '80s, unemployment was roughly 50 percent "cyclical": Recessions drove firms to lay off workers and recoveries drove them to hire workers back into the same jobs. Now, by contrast, the "structural" component of unemployment accounts for most job losses: Technological and organizational shifts are driving firms to close jobs down permanently, and laid-off workers are having to look for entirely new work. That takes time. Firms have to create jobs they never had before, which takes longer than re-creating old ones. As a result, the new structural nature of unemployment means that job creation lags in the early stages of a recovery.

Mr. Bush should not be blamed for this, though his irresponsible fiscal policy harms business confidence and therefore job creation. But the bigger question is whether jobless recoveries are a bad thing. They are, after all, the flip side of good news. There is less cyclical unemployment these days, so recessions are milder; fewer jobs are being created now because fewer jobs were destroyed during the downturn. Moreover, a jobless recovery means, by definition, that each worker is producing more. Higher productivity, in turn, is the best promise possible of higher wages and employment in the future. Just look at the past decade: The jobless recovery of 1991-92 ushered in the longest economic expansion of the postwar period, which drove unemployment down to previously unheard-of levels, and fueled improvements in poverty, crime and other social indicators...

[OldFriend]

It's NOT a jobless recovery!

[Pest]

I always thought that it's much easier to lay off people in an economic downturn, then replace them with automated systems.

Here in Michigan, I think the auto companies are doing this big time. Can you imagine the union uproar if people were laid off because they were being replaced by machines? Now they can use the excuse of bad economy to lay people off, then replace them with robots. The unions are out of the picture.

[.cnI redruM]

Unemployment at the nadir of the recession 6.4%
Unemployment now 5.7%
That's a net gain 0.7%
That would factually refute the gravamen of the entire article.

[DMCA]

Where are these jobs being created?

[1rudeboy]

Yup, those "thousands" of jobs sent overseas have driven our unemployment rate to . . . wait a minute, no, it's our standard of living that's falling, no wait, that's not happening either!

[1rudeboy]

Nursing, teaching, etc.

[Burn24]

gravamen???

[.cnI redruM]

gravaman - the evidence that the author's point rest on.

[.cnI redruM]

Clearly these jobs are being created in the US. Otherwise, the unemployment rate would still be 6.4%, rather than falling to 5.7%.

[DMCA]

Then why did the government job creation numbers show an increase of only 1,000 jobs in Dec and why do the unemployment numbers show increasing numbers of people no longer looking for work? And why are their reports out that show that the new jobs that are being created are mainly in the service industry and service jobs pay less and have less benefits than other jobs?

[.cnI redruM]

Oh, you're picking one data point, rather than the entire curve. A statistical analysis based on a sample where N = 1. Brilliant. Thank you for your contribution.

Please cite the specific unemployment # that demonstrate increasing incidences of the frustrated worker syndrome.

[Burn24]

Excellent new word! Thank you.

[GailA]

I've found few employers high in Dec, unless it is real necessary. But usually start hiring again after the first of the year.

[DMCA]

http://www.bls.gov/fax/3010.pdf

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A2949-2004Jan9&notFound=true

The unemployment rate fell to 5.7 percent in December, a 14-month low, from 5.9 percent in November. But that reflected the decisions of 309,000 people to either stop working or stop looking for jobs, which means they are no longer counted as part of the labor force.

http://www.epinet.org/content.cfm/webfeatures_snapshots

States with particularly worrisome job markets—where there have been substantial declines in the number of jobs and where the difference in wages between job-gaining and job-losing industries is particularly high—include:

* New Hampshire, which still has fewer jobs than when the recession ended, and where the wages in industries gaining jobs are 35% lower than wages in industries losing jobs.
* Delaware, which, likewise, has lost jobs since the recession ended and where job- gaining industries have wages 43% below those in job-losing industries.
* Colorado, which has lost almost 2% of its jobs since the end of the recession and where job-gaining industry wages are 35% below the wages in job-losing industries.
*
West Virginia, which has lost 1.7% of its jobs since the end of the recession and where wages in job-gaining industries are 33% below wages in job-losing industries.

The shift in jobs from higher-paying industries to lower-paying industries has affected nearly every state. This dynamic has the potential to significantly slow the growth of living standards for working families.

[.cnI redruM]

>>>>>>>But that reflected the decisions of 309,000 people to either stop working or stop looking for jobs, which means they are no longer counted as part of the labor force.

OK, let's cut to the chase.

1) Out of those 309,000, how many do you believe will starve to death. Why arn't they still out hunting? If I wasn't eating on a regular basis or was having to explain to the wife and kids why they were two weeks away from living in the cab of a Chevy Pick-Up truck, I'd stay motivated.

2) What specific policy recommendation would you like to see GWB suggest to Congress to rectify this problem? In other words, rather than bemoaning the lack of employment in certain sectors, what should be done to clean this up? Remember, crying about spilled milk until it turns rancid just stinks up the room.

[henderson field]

Three million manufacturing jobs were lost. Please let me know when these come back.

[DMCA]

1: Never said they would. They will go on food-stamps/welfare and drive the taxes up for those that are still working.

2a: Stop insuring the overseas operations/plants of US companies with US tax-dollars.

2b:All money spend by the Federal government, unless a valid reason is found not too, must be spent with US companies employing US workers. After all these companies depend on the US legal/military system to keep going so they should repay that by creating jobs here.

[OldFriend]

Daughter works in tech in Denver. Her company is hiring hiring hiring. And I assure you no one is commuting overseas to do the work either.

NJ/NY area is also hiring tech.

According to the Governor of Iowa, they too are moving from farming to high tech.

These are well paying jobs. If you want to pretend otherwise and it makes you feel better......go right ahead.