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Jobless recovery

March 15, 2024

A jobless recovery or jobless growth is an economic phenomenon in which a macroeconomy experiences growth while maintaining or decreasing its level of employment. The term was coined by the economist Nick Perna in the early 1990s.[1][2]

Causes edit

Economists are still divided about the causes and cures of a jobless recovery: some argue that increased productivity through automation has allowed economic growth without reducing unemployment.[3] Other economists state that blaming automation is an example of the luddite fallacy[4] and that jobless recoveries stem from structural changes in the labor market, leading to unemployment as workers change jobs or industries.[5]

Industrial consolidation edit

Some have argued that the recent lack of job creation in the United States is due to increased industrial consolidation and growth of monopoly or oligopoly power.[6] The argument is twofold: firstly, small businesses create most American jobs, and secondly, small businesses have more difficulty starting and growing in the face of entrenched existing businesses (compare infant industry argument, applied at the level of industries, rather than individual firms).

Population growth vs. employment growth edit

 

In addition to employment growth, population growth must also be considered concerning the perception of jobless recoveries. Immigrants and new entrants to the workforce will often accept lower wages, causing persistent unemployment among those who were previously employed.[7][8]

Surprisingly, the U.S. Bureau of Labor Statistics (BLS) does not offer data-sets isolated to the working-age population (ages 16 to 65).[9] Including retirement age individuals in most BLS data-sets may tend to obfuscate the analysis of employment creation in relation to population growth.[10] Additionally, incorrect assumptions about the term, Labor force, might also occur when reading BLS publications, millions of employable persons are not included within the official definition. The Labor force, as defined by the BLS,[11] is a strict definition of those officially unemployed (U-3),[12] and those who are officially employed (1 hour or more).[13]

Once again, the baby-boom generation has become a generator of change, this time in its retirement. Moreover, the jobless recovery of the 2001 recession, coupled with the severe economic impact of the 2007–2009 recession, caused disruptions in the labor market. In the first 12 years of the 21st century, the growth of the population has slowed and labor force participation rates generally have declined. As a result, labor force growth also has slowed. The Bureau of Labor Statistics (BLS) projects that the next 10 years will bring about an aging labor force that is growing slowly, a declining overall labor force participation rate, and more diversity in the racial and ethnic composition of the labor force.

Bureau of Labor Statistics, Monthly Labor Review, December 2013.[10]

The following table and included chart depicts year-to-year employment growth in comparison to population growth for those persons under 65 years of age. As such, baby boomer retirements are removed from the data as a factor for consideration. The table includes the Bureau of Labor Statistics, Current Population Survey, for the Civilian noninstitutional population and corresponding Employment Levels, dating from 1948 and includes October 2013, the age groups are 16 years & over, and 65 years & over.[9] The working-age population is then determined by subtracting those age 65 and over from the Civilian noninstitutional population and Employment Levels respectively. Isolated into the traditional working-age subset, growth in both employment levels and population levels are totaled by decade, an employment percentage rate is also displayed for comparison by decade.

When examined, by decade, the first decade of the 2000s, the United States suffered a 5% jobless rate when compared to the added working age population.

See also edit

Notes and references edit

  1. ^ "INDUSTRY ADOPTS POLITICAL PLANKS FOR NEW DEAL WAR; OLD ORDER IS UPHELD". New York Times. 6 December 1935. Retrieved 10 November 2013. Pay Articles from December 1935 Part 7 - Site Map - The New York ...
  2. ^ Smith, Lisa (2010-08-17). "Jobless Recovery: The New Normal Since 1990 | Investopedia". Retrieved 2016-08-17.
  3. ^ Automatic Reaction, The Economist, 2010-09-09
  4. ^ Easterly, William (2001). The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, Massachusetts: MIT Press. pp. 53–54. ISBN 0-262-55042-3.
  5. ^ Erica L. Groshen; Simon Potter (Aug 2003). "Has Structural Change Contributed to a Jobless Recovery?". Federal Reserve Bank of New York.
  6. ^ Who Broke America’s Jobs Machine? Why creeping consolidation is crushing American livelihoods., by Barry C. Lynn and Phillip Longman, Washington Monthly
  7. ^ Camerota Ph.D., Stephen A. (October 2004). "A Jobless Recovery?: Immigrant Gains and Native Losses". Center for Immigration Studies. Retrieved 2 March 2014. Between March of 2000 and 2004, the number of unemployed adult natives increased by 2.3 million, while the number of employed adult immigrants increased by 2.3 million.
  8. ^ Peri, Giovanni. (PDF). Cato Journal, Vol. 32, No. 1 (Winter 2012). Archived from the original (PDF) on 9 October 2012. Retrieved 2 March 2014. In this case firms pay immigrants less than their marginal productivity, increasing the firms' profits. Such cost-savings on immigrants act as an increase in productivity for firms.
  9. ^ a b c "Bureau of Labor Statistics". Current Population Survey. Bureau of Labor Statistics. Retrieved 9 November 2013.
  10. ^ a b Toossi, Mitra (1 December 2013). "Labor force projections to 2022: the labor force participation rate continues to fall" (PDF). Bureau of Labor Statistics. Retrieved 1 March 2014.
  11. ^ "Glossary". Labor Force. Bureau of Labor Statistics. Retrieved 2 March 2014. Labor force (Current Population Survey) The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary.
  12. ^ "Economic News Release". HOUSEHOLD DATA Table A-15. Alternative measures of labor underutilization. Bureau of Labor Statistics. Retrieved 2 March 2014.
  13. ^ "BLS Information". Frequently Asked Questions (FAQs). Bureau of Labor Statistics. Retrieved 2 March 2014.

External links edit

    March 15, 2024
    jobless, recovery, jobless, recovery, jobless, growth, economic, phenomenon, which, macroeconomy, experiences, growth, while, maintaining, decreasing, level, employment, term, coined, economist, nick, perna, early, 1990s, contents, causes, industrial, consolid. A jobless recovery or jobless growth is an economic phenomenon in which a macroeconomy experiences growth while maintaining or decreasing its level of employment The term was coined by the economist Nick Perna in the early 1990s 1 2 Contents 1 Causes 1 1 Industrial consolidation 2 Population growth vs employment growth 3 See also 4 Notes and references 5 External linksCauses editEconomists are still divided about the causes and cures of a jobless recovery some argue that increased productivity through automation has allowed economic growth without reducing unemployment 3 Other economists state that blaming automation is an example of the luddite fallacy 4 and that jobless recoveries stem from structural changes in the labor market leading to unemployment as workers change jobs or industries 5 Industrial consolidation edit Some have argued that the recent lack of job creation in the United States is due to increased industrial consolidation and growth of monopoly or oligopoly power 6 The argument is twofold firstly small businesses create most American jobs and secondly small businesses have more difficulty starting and growing in the face of entrenched existing businesses compare infant industry argument applied at the level of industries rather than individual firms Population growth vs employment growth edit nbsp In addition to employment growth population growth must also be considered concerning the perception of jobless recoveries Immigrants and new entrants to the workforce will often accept lower wages causing persistent unemployment among those who were previously employed 7 8 Surprisingly the U S Bureau of Labor Statistics BLS does not offer data sets isolated to the working age population ages 16 to 65 9 Including retirement age individuals in most BLS data sets may tend to obfuscate the analysis of employment creation in relation to population growth 10 Additionally incorrect assumptions about the term Labor force might also occur when reading BLS publications millions of employable persons are not included within the official definition The Labor force as defined by the BLS 11 is a strict definition of those officially unemployed U 3 12 and those who are officially employed 1 hour or more 13 Once again the baby boom generation has become a generator of change this time in its retirement Moreover the jobless recovery of the 2001 recession coupled with the severe economic impact of the 2007 2009 recession caused disruptions in the labor market In the first 12 years of the 21st century the growth of the population has slowed and labor force participation rates generally have declined As a result labor force growth also has slowed The Bureau of Labor Statistics BLS projects that the next 10 years will bring about an aging labor force that is growing slowly a declining overall labor force participation rate and more diversity in the racial and ethnic composition of the labor force Bureau of Labor Statistics Monthly Labor Review December 2013 10 The following table and included chart depicts year to year employment growth in comparison to population growth for those persons under 65 years of age As such baby boomer retirements are removed from the data as a factor for consideration The table includes the Bureau of Labor Statistics Current Population Survey for the Civilian noninstitutional population and corresponding Employment Levels dating from 1948 and includes October 2013 the age groups are 16 years amp over and 65 years amp over 9 The working age population is then determined by subtracting those age 65 and over from the Civilian noninstitutional population and Employment Levels respectively Isolated into the traditional working age subset growth in both employment levels and population levels are totaled by decade an employment percentage rate is also displayed for comparison by decade When examined by decade the first decade of the 2000s the United States suffered a 5 jobless rate when compared to the added working age population U S Growth Employment level growth Vs population level growth by decade Civilian noninstitutional population Working age population Employment levels Working age employmentYear Age 16 years amp over Age 65 yrs amp over Age 16 to 65 yrs Growth decade Age 16 years amp over Age 65 yrs amp over Age 16 to 65 Growth decade Percent emp 1948 103 468 000 10 881 000 92 587 000 58 554 000 2 906 000 55 648 0001949 104 524 000 11 191 000 93 333 000 57 712 000 2 926 000 54 786 000 1950 104 872 000 11 534 000 93 338 000 59 352 000 2 845 000 56 507 0001951 104 810 000 11 918 000 92 892 000 60 252 000 2 858 000 57 394 0001952 105 812 000 12 334 000 93 478 000 60 748 000 3 000 000 57 748 0001953 107 623 000 13 257 000 94 366 000 59 796 000 2 882 000 56 914 0001954 108 892 000 13 520 000 95 372 000 59 990 000 2 963 000 57 027 0001955 110 296 000 13 925 000 96 371 000 63 268 000 3 213 000 60 055 0001956 111 526 000 14 215 000 97 311 000 63 619 000 3 213 000 60 406 0001957 113 013 000 14 516 000 98 497 000 63 598 000 3 089 000 60 509 0001958 114 429 000 14 821 000 99 608 000 63 266 000 2 855 000 60 411 0001959 116 040 000 15 148 000 100 892 000 7 559 000 64 927 000 3 024 000 61 903 000 7 117 000 94 15 1960 118 001 000 15 508 000 102 493 000 65 287 000 3 176 000 62 111 0001961 119 214 000 15 861 000 103 353 000 65 531 000 2 885 000 62 646 0001962 121 236 000 16 880 000 104 356 000 66 585 000 2 821 000 63 764 0001963 123 360 000 17 014 000 106 346 000 67 791 000 2 765 000 65 026 0001964 125 468 000 17 296 000 108 172 000 69 543 000 2 913 000 66 630 0001965 127 294 000 17 580 000 109 714 000 71 819 000 2 926 000 68 893 0001966 128 730 000 17 860 000 110 870 000 73 600 000 2 892 000 70 708 0001967 130 936 000 18 194 000 112 742 000 75 337 000 3 030 000 72 307 0001968 133 120 000 18 500 000 114 620 000 76 699 000 3 086 000 73 613 0001969 135 489 000 18 825 000 116 664 000 15 772 000 78 789 000 3 069 000 75 720 000 13 817 000 87 60 1970 138 529 000 19 202 000 119 327 000 78 651 000 3 032 000 75 619 0001971 141 666 000 19 605 000 122 061 000 80 527 000 3 005 000 77 522 0001972 145 446 000 20 229 000 125 217 000 83 424 000 2 909 000 80 515 0001973 148 479 000 20 536 000 127 943 000 86 390 000 2 787 000 83 603 0001974 151 494 000 21 214 000 130 280 000 86 169 000 2 794 000 83 375 0001975 154 589 000 21 803 000 132 786 000 86 689 000 2 680 000 84 009 0001976 157 438 000 22 309 000 135 129 000 89 850 000 2 791 000 87 059 0001977 160 377 000 22 874 000 137 503 000 94 183 000 2 903 000 91 280 0001978 163 272 000 23 450 000 139 822 000 97 669 000 3 006 000 94 663 0001979 166 300 000 24 067 000 142 233 000 25 569 000 100 013 000 3 002 000 97 011 000 21 291 000 83 27 1980 168 883 000 24 597 000 144 286 000 99 579 000 2 907 000 96 672 0001981 171 166 000 25 109 000 146 057 000 99 562 000 2 928 000 96 634 0001982 173 199 000 25 619 000 147 580 000 98 849 000 2 878 000 95 971 0001983 175 121 000 26 160 000 148 961 000 102 803 000 2 878 000 99 925 0001984 177 306 000 26 712 000 150 594 000 106 049 000 2 797 000 103 252 0001985 179 112 000 27 266 000 151 846 000 108 063 000 2 841 000 105 222 0001986 181 547 000 27 791 000 153 756 000 110 588 000 2 909 000 107 679 0001987 183 620 000 28 362 000 155 258 000 113 679 000 3 126 000 110 553 0001988 185 402 000 28 875 000 156 527 000 115 978 000 3 264 000 112 714 0001989 187 165 000 29 462 000 157 703 000 15 470 000 117 698 000 3 352 000 114 346 000 17 335 000 112 06 1990 190 017 000 29 453 000 160 564 000 118 110 000 3 256 000 114 854 0001991 191 798 000 29 893 000 161 905 000 117 395 000 3 193 000 114 202 0001992 193 784 000 30 396 000 163 388 000 118 990 000 3 341 000 115 649 0001993 195 794 000 30 784 000 165 010 000 121 578 000 3 394 000 118 184 0001994 197 765 000 31 181 000 166 584 000 124 729 000 3 641 000 121 088 0001995 199 508 000 31 629 000 167 879 000 125 136 000 3 676 000 121 460 0001996 201 636 000 31 902 000 169 734 000 127 903 000 3 807 000 124 096 0001997 204 098 000 32 071 000 172 027 000 130 785 000 3 933 000 126 852 0001998 206 270 000 32 275 000 173 995 000 132 732 000 3 855 000 128 877 0001999 208 832 000 32 538 000 176 294 000 18 591 000 134 696 000 3 984 000 130 712 000 16 366 000 88 03 2000 213 736 000 33 590 000 180 146 000 137 846 000 4 244 000 133 602 0002001 216 315 000 33 823 000 182 492 000 136 269 000 4 300 000 131 969 0002002 218 741 000 34 004 000 184 737 000 136 599 000 4 248 000 132 351 0002003 222 509 000 34 432 000 188 077 000 138 556 000 4 711 000 133 845 0002004 224 640 000 34 796 000 189 844 000 140 278 000 4 902 000 135 376 0002005 227 425 000 35 208 000 192 217 000 142 918 000 5 263 000 137 655 0002006 230 108 000 35 841 000 194 267 000 146 081 000 5 617 000 140 464 0002007 233 156 000 36 603 000 196 553 000 146 334 000 5 787 000 140 547 0002008 235 035 000 37 522 000 197 513 000 143 350 000 6 084 000 137 266 0002009 236 924 000 38 362 000 198 562 000 22 268 000 137 953 000 6 193 000 131 760 000 1 048 000 4 71 2010 238 889 000 39 045 000 199 844 000 139 159 000 6 376 000 132 783 0002011 240 584 000 40 364 000 200 220 000 140 681 000 6 893 000 133 788 0002012 244 350 000 42 695 000 201 655 000 143 060 000 7 412 000 135 648 0002013 246 745 000 44 155 000 202 590 000 144 423 000 7 748 000 136 675 0002014 249 027 000 45 685 000 203 342 000 147 190 000 8 140 000 139 050 0002015 251 936 000 47 269 000 204 667 000 149 703 000 8 552 000 141 151 0002016 254 742 000 48 837 000 205 905 000 7 343 000 151 798 000 8 820 000 142 978 000 11 218 000 152 77 Pre and Post 2000 Comparisons working age Pop Growth Employment Growth1900s 1950 to 1999 82 961 000 75 926 000 91 52 2000s 2000 to 2016 29 611 000 12 266 000 41 42 Bold denotes datum used to produce Working Age Growth Decade calculation Decade example End of year 1949 to end of year 1959 Source Bureau of Labor Statistics Current Population Survey 9 Series Id LNU00000000 Not Seasonally Adjusted Series title Unadj population Level Labor force status Civilian noninstitutional population age 16 years and overSeries Id LNU02000000 Not Seasonally Adjusted Series title Unadj employment Level Labor force status Employed Age 16 years and overSeries Id LNU00000097 Not Seasonally Adjusted Series title Unadj population Level 65 yrs amp over Labor force status Civilian noninstitutional population age 65 years and overSeries Id LNU02000097 Not Seasonally Adjusted Series title Unadj employment Level 65 yrs amp over Labor force status Employed Age 65 years and overSee also editDeindustrialization Involuntary unemployment Lost Decade Japan Structural unemploymentNotes and references edit INDUSTRY ADOPTS POLITICAL PLANKS FOR NEW DEAL WAR OLD ORDER IS UPHELD New York Times 6 December 1935 Retrieved 10 November 2013 Pay Articles from December 1935 Part 7 Site Map The New York Smith Lisa 2010 08 17 Jobless Recovery The New Normal Since 1990 Investopedia Retrieved 2016 08 17 Automatic Reaction The Economist 2010 09 09 Easterly William 2001 The Elusive Quest for Growth Economists Adventures and Misadventures in the Tropics Cambridge Massachusetts MIT Press pp 53 54 ISBN 0 262 55042 3 Erica L Groshen Simon Potter Aug 2003 Has Structural Change Contributed to a Jobless Recovery Federal Reserve Bank of New York Who Broke America s Jobs Machine Why creeping consolidation is crushing American livelihoods by Barry C Lynn and Phillip Longman Washington Monthly Camerota Ph D Stephen A October 2004 A Jobless Recovery Immigrant Gains and Native Losses Center for Immigration Studies Retrieved 2 March 2014 Between March of 2000 and 2004 the number of unemployed adult natives increased by 2 3 million while the number of employed adult immigrants increased by 2 3 million Peri Giovanni Immigration Labor Markets and Productivity PDF Cato Journal Vol 32 No 1 Winter 2012 Archived from the original PDF on 9 October 2012 Retrieved 2 March 2014 In this case firms pay immigrants less than their marginal productivity increasing the firms profits Such cost savings on immigrants act as an increase in productivity for firms a b c Bureau of Labor Statistics Current Population Survey Bureau of Labor Statistics Retrieved 9 November 2013 a b Toossi Mitra 1 December 2013 Labor force projections to 2022 the labor force participation rate continues to fall PDF Bureau of Labor Statistics Retrieved 1 March 2014 Glossary Labor Force Bureau of Labor Statistics Retrieved 2 March 2014 Labor force Current Population Survey The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary Economic News Release HOUSEHOLD DATA Table A 15 Alternative measures of labor underutilization Bureau of Labor Statistics Retrieved 2 March 2014 BLS Information Frequently Asked Questions FAQs Bureau of Labor Statistics Retrieved 2 March 2014 External links editExploding Productivity Growth Context Causes and Implications Retrieved from https en wikipedia org w index php title Jobless recovery amp oldid 1196036197, wikipedia, wiki, book, books, library,

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