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Fewer Jobs than Ten Years Ago

The Wall Street Journal’s Real Time Economics blog has a post on A Lost Decade for Jobs:

The U.S. now produces fewer private sector jobs than it did a decade ago. This been the case since August, and it’s getting worse. In October, private sector companies employed 108.401 million U.S. workers, a million fewer than in October 1999, when they employed 109.487 million. Not since the Labor Department began tracking payroll employment in 1939 has there been such a stretch with no net job gains.

 

The WSJ post, as one might expect, doesn’t express any concern about of the type of structural unemployment I’ve been talking about here. It does briefly note that productivity has increased, and even the Journal seems a little less than enthusiastic about the conventional wisdom that increasing labor productivity will always lead to greater prosperity:

The other answer is that the U.S. has enjoyed a big burst of productivity growth during this stretch — which means firms are producing more with fewer workers. In the long-run this is supposed to be a good development because it leads to profit and income gains. But the short-term costs are looking increasingly more debilitating.

‘As I’ve pointed out previously, labor-saving technologies are going to continue to advance while we are all waiting for the job market to recover. High employment will, of course, result in weak consumer confidence, and that may result in job automation being one of the few truly attractive new technology investment sectors. Hence my concern that we may be looking at beginning of significant structural unemployment—with no real end in sight.  The danger is that we might be looking at a labor market which is fundamentally losing its ability to spring back.

Categories: Uncategorized
  1. December 2, 2009 at 4:22 pm

    It’s interesting that a very similar thing occurred in the 30s. I pointed in a post a while back

    http://www.asymptosis.com/banks-who-needs-em.html

    to Alexander Field’s 2003 paper, “The Most Technologically Progressive Decade of the Century”, which shows that the 1930s saw growth in “multifactor productivity” (largely technology-driven) surpassing anything before or since. This goes a long way to explaining why employment and employees were slow to feel the benefits of the recovery. Productivity was skyrocketing, so less workers were needed for each unit of output.

    http://lsb.scu.edu/economics/faculty/afield/AER%20September%202003e.pdf

    If the specter of a secular, structural decline in employment is real, recessions seem like the time when that specter would show its teeth.

    The rise of “jobless recoveries” in the last two decades–largely unexplained by economists, as far as I’ve seen–could be a signal that the trend is gaining momentum.

  2. Alex
    December 7, 2009 at 11:42 pm

    Hi, I like what you are doing very much. MAny people do not even understand the comming reality. But what is interesting is all that was already predicted by Marx. For whom socioeconomic formations based on means of productions. I think you will enjoy reading him, he was a real genius.

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