Oxford Analytica looks into the possibility of a “jobless recovery” in a new report. “With some — albeit highly disputed — signs of recovery in the global economy, there is growing debate on what form this might take.”
“Both recent experience and economic theory would suggest that a return to growth, at least in the short term, might not be accompanied by an increase in employment.”
In 2001, after the burst of the dot-com bubble, recovery was fairly rapid. However, though mature economies already had seen a return to growth by 2002, employment did not recover in the same way. Rather, it continued to lag behind.
Economic theory offers a possible explanation as to why the effect of downturns on labour demand can be extremely long-lived or, in other words, why recovery, in effect, can be ‘jobless’:
- When there is a downturn in economic activity, employment rates fall (ie jobs are lost) and companies stop investing in new technology.
- However, since the innovation cycle is much longer than most downturns in the business cycle the rate of innovation in the economy is not overly affected, new discoveries continue to be made.
- This means that, when demand starts to recover, surviving companies have the option to buy into the latest technology.
- Those that do so soonest are likely to be the most competitive and hence best able to increase productivity.
- For a time, companies can increase production by investing in new technologies, and thus delay re-hiring people.
The question is whether this pattern is set to recur when the world begins to emerge from the current recession.
The article conviently sidesteps the real problems we are facing.
No mention of the pending hyperinflation in 18 months due to the Obama out of control spending programs.
No mention of the Democrats’s plan for a 2nd “stimulus” package.
No mention of the huge hit caused by the socialization of our medical system.
No mention of the multi-trillion dollar debt future generations will be facing.
No mention of the cap + trade fiasco which will cripple USA industries with no similar restrictions on companies in other countries.
Hope and Change is now Fear and Change.
Krugman said the same thing in an interview with ABC news.
Jobless recovery = doublespeak
Krugman also pushed for the housing bubble.
I give post #1 a “B+”.
And the answer is no, there is not a recovery going on. Efficiency always increases, but that is like trying to solve a “sales” problem by cutting costs.
You can cut costs all you want, but if nothing is manufactured here we are still sending money outside the country at a record pace via imports.
Someday you have to pay the bill.
It’s bad out there. I have been laid off for 6 months and have found it hard to even get interviews, let alone find solid work.
Ahh for the good old days when Bush was in charge. How’s Hopey McChange working out for you?
#5: You mean the Bush guy on whose watch all of this started? Plus Iraq and…
#5, #6: You guys still stuck in the false left/right paradigm?
😛
Uncle Dave seems conflicted.
He tries his darndest to protect the Messiah with posts that obscure the problems created with this gimme, gimme, gimme administration and then implies the ignorant back-water hick GWB created the problem of the ultra tech-savvy young replacing the older tech phobic workers.
..and that is by design.
they will try to get everyone kicked to unemployment so they can lure you to a government job at 20% or more lower pay, because no matter the pay, you should be prowd to work for your country.
The big bonus uncle sam is going to add to this
round of hires is that you cannot protest or and engage in any kind of anti-government activity because you know, protesting against uncle sam is now considered “soft terrorism”,
-or should is say, Extremism.
yup, soon, working for uncle sam will
be very cool again. -at least for uncle sam anyway.
-s
#1 here, here.
don’t forget to mention the huge conflict of interest going in almost half the hires to the cabinet. esp the economic advisers.
#7 -aahh yup.
#1, benson,
The article conviently sidesteps the real problems we are facing.
There may be other problems out there and you even point to some. What you, and the others who constantly say “No, reduce taxes” miss, is this problem originated on someone else’s Presidency. The manufacturing jobs that should be there were all packed up and sent overseas. We are now stuck with the mess.
The problem YOU are sidestepping is how do we fix the problem created by the last Administration.
#11–Fusion==”the Problem” is the mess we are in and how to get out of it. Economic challenges are difficult enough, impossible once you had a heavy dash of politics, even valid politics. Why not throw some religion in there too and say we deserve it for electing a Muslim? (smile!)
I just do wonder how much of this was done with eyes wide open because enough of the right sort benefit in the general carnage. I have a hunch its much higher than any of us would at first believe and certainly merits much more consideration than the zero consideration it has gotten so far (ie–what, one prosecution so far?)
When you follow the money on this, the very people in charge of the problem created the fraud and reap the rewards. We are founded on capitalism with lip service to morality.
Heh, heh.
#11
The problem is how do we fix what all admins have screwed up since 1880?
The United States of America is in the same decline that Spain & Britain has succumbed to.
The course will not alter until we scrap the present form of government and draft a new constitution.
Until everyone agrees to that there will only be decline. We cannot fix anything with the current broken tools at hand.
Cursor_
This thread is about the solution: jobs, jobs, jobs. We need a real job stimulation program/honest industrial policy. It won’t happen. Too many getting rich off the rape of America.
Facing stiff foreign competition and energy needs the last 30 years would have caused a flattening of our growth curve all on its own even if we had acted in our own self interest. Throwing in the towel, gutting the golden goose from underneath and within as we did simply turned a challenge into a debacle.
I see NOTHING being discussed to turn our slide around. Learn to eat dirt cookies as they do in Haiti.
well folks, the only way we get a long-lasting recovery is with good-paying, long-lasting jobs. you know it, i know it. without the jobs, even the big companies are smarting and will continue to do so (without the bailouts we should have had several very large banks go under already). as well, i see talk where one of the reasons we have “jobless recoveries” is because of better and better technology. I like the better technology, but you do have to wonder: with ho societies are made up right now, can we afford to get much more efficient economically without total social engineering even more vast than the worst conspiracy theories say?
Alfie–what percentage of small start up businesses are impacted by carbon cap and trades?
You make as much sense here as the rest of your post. The only one assuming zero sum was yourself, or that may have been a self assessment. Hard to tell.
Unless the consumer base recovers, there will be no recovery.
Jobless – yes.
Recovery – no.
Our economy, such as it is, is 70% based on consumption. Jobless people don’t consume much and what they do consume doesn’t require innovation. That’s for tech toys and such which they certainly WON’T be buying.
The party we had during the past eight years was based on false wealth and borrowed money. We won’t be returning to that standard of living for quite some time, if ever, since those who lent us the money to party won’t be so stupid next time.
I love the idiots who respond it’s all Bush’s fault all Bush’s fault. As if they’re stupid enough to think there’s a policy difference between The Idiot and the Golden Child. Heads up sports fans, there’s ONE party in Washington, and they don’t work for you. Obama supports the Oligarchy just like Bush, he’s just a better liar.
Alfie, you’re funny.
You really think the guy starting up a business of selling rice cakes in the street is going to work less because CEO stock option packages are restricted to what his board of directors is willing to publicly post as a call against future profits?
Haw!!! Yes, thats not what you said. Not what you said by word, but certainly what you said and what you mean.
SOME regulations hurt SOME businesses while those same regulations help other businesses. Other regulations help most businesses and those that are hurt are not wanted.
Alfie, how can you witness the regulatory debacle of the last 6-10-14 years and still argue for “unfettered regulation?”
Can nothing convince you that society needs something more nuanced than a bumper sticker slogan to get our bus out of the ditch?
#23–Alfie==do you know what “the race to the bottom is?” You demonstrate it in spades.
Do you want unlicensed gypsy cabs running uninsured unsafe vehicles all over town? I know, its free enterprise.
I do agree that on things like curb painters that offer little risk to the public besides casing neighborhoods for vacant houses, there should be a registration process only with little interference.
If there were zealots for regulations to balance the zealots for free enterprise, maybe such a light hand could be developed. Works in other third world countries, why not here?
“Lose the regulation, and small business will explode…after a recovery, then you can clamp down on the abuses.”
This is actually not a disinteresting theory. Perhaps there *are* regulations, like Bobbo’s anti-gypsy-cab insurance regulations, that are only available for more enlightened times.
It won’t be a jobless recovery. That implies just no new jobs and a return to the prior level of wealth. It will be a new painful existence with less jobs.
# 1 pretty much nailed it.
The obvious miss is that many countries aren’t in a recession. China, India, Brazil, Indonesia, and a few other locations still have growth.
The countries that are in the most trouble would include the EU and the US all of whom have massive dept loads and high taxes.
You can take this to the bank, a stable government with low taxes creates an environment in which businesses can prosper.
Crap like cap an trade adds massively to the cost of doing business inside any country that does it and is an absolutely wonderful reason to move production to some location without cap and trade to reduce the costs of doing business.
That a country with cap and trade does reduce local pollution a tad is most likely true but they do export jobs and income to get less local pollution. The impact, if any, on world pollution is dubious.
Some countries are going to want jobs and a higher standard of living and the fact that the EU and the US are willing to export jobs to these locations is all the reason they should need to adjust their legal systems to attract those jobs.
If I were a multinational I’d be looking at Ghana, South Africa and some of the more stable central and South American nations. Of course India and Brazil are still very good locations.
Re: Alfred1, “…check out the old flicks about the 20’s…notice all the small street vending…”
… notice the total economic meltdown of 1929 … ah, those were the days!
Alfred (surprisingly) brings up an interesting point – about over regulation stopping small businesses.
The regulation that is being talked about has nothing to do with small businesses. And no small business owner is going to shut up shop because if their business gets huge, they may not have as many tax dodges, or heaven forbid executive pay might be limited… I mean really.
That said I think the point is interesting because lots of effort and money is expended on stupid projects. And in reverse lots of good ideas and projects are avoided. Why? Because people are scared of litigation. Which boils down to regulation.
In my own neighborhood a new law means that a handful of neighbors will have to find ~1 million dollars to rebuild a dam, because in 100 year flood (one that happens on average once every 100 years), there is potential for someone to get hurt. It’s crazy.
# 33 JimR said, “… notice the total economic meltdown of 1929 …”
Yep, it didn’t take long for Fed income tax to take its toll…
Wealth trickles down slowly, poverty roars quickly down like a torrent.
Alfred1, have you ever heard of balance? you talk of statist and free market as if they are the only alternatives. How about common sense and balance? How do you guide 350 million people to work as a team so that they behave like a country and not like 350 million that couldn’t give a damn about anyone else as long as they get theirs?
Re: Patrick #35, “Yep, it didn’t take long for Fed income tax to take its toll…”
That’s not the reason.
Nobel economist Milton Friedman:
“Mr. Friedman’s monumental “A Monetary History of the United States,” written with Anna Schwartz, makes the now standard interpretation of what made the “great contraction” so severe. It was not the downturn in the business cycle, trade protectionism or the 1929 stock market crash that plunged the country into deep depression. It was the collapse of the banking system during three waves of panics over the 1930-33 period. Some 9,000 banks closed during those years, wiping out one third of the nation’s money supply.
The failure of the Bank of the United States on Dec. 11, 1930, the largest bank to collapse in U.S. history, was the result of the unwillingness of the Federal Reserve and the private Clearing House banks to save it. “
Hmmm… sounds like a reason to take a different tact this time around.
Link for #39: Washington post
#37, Alfred1, oh come on… now your saying that common sense and balance between statist and free market is communism? Hah.
What you are arguing for is anarchy which will miraculously resolve itself into efficiency. I’m not one to depend on miracles.