Sunday, October 25, 2009
Job-loss recovery:Experts see rebounding economy shedding jobs
Forget a jobless recovery. The economy may be entering a recovery with job losses.
Third-quarter estimates this week are expected to show that the economy grew for the first time since the quarter ending in June 2008. Despite the estimated 3 percent expansion and a stock market that has been on a tear since March, hundreds of thousands of people are still being laid off each month.
Eight million jobs have been lost nationwide since the recession began two years ago, and by some measures workers face the worst job market since the Depression. The average laid-off worker has been without a job for 6 1/2 months, a post-World War II record. Many of those workers will never recover financially.
Economists are puzzled as to why job growth has slowed, citing everything from higher health care costs, to higher productivity, to Chinese currency manipulation.
"It's a complete mystery to me," said Brad DeLong, a liberal economist at Berkeley, as he drove home from purchasing a made-in-China flat screen television in his Kia Optima. "I'll have to get online to research this, but first I have to contact Verizon's Bangalore-based call center to restore my DSL service."
Okay, that last paragraph is satire.
I think you are missing the point. The point is not that spending on American-made products is falling--spending on American-made goods and services is rising at a rate of 3.5% per year right now and has been since May.
The point is that *even though spending on American products is rising,* employment if falling.
brad: I do appreciate your comment and will think this through further.
Wasn't the last "recovery" during Bush's term a jobless recovery? How many more jobless recoveries can we take?
To an extent, business is simply taking advantage of market conditions. With unemployment at double-digit levels, business can go to workers and demand they work 60 hours a week for less pay. Workers are given an untenable choice between acceding to such demands or joining the millions looking for work.
So the recovery will remain jobless until the workforce is so overwhelmed that it is no longer physically able to increase output. Only then will business begin adding jobs.
how many jobs would be created if you took healthcare obligation off employers?
With unemployment at double-digit levels, business can go to workers and demand they work 60 hours a week for less pay.