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 first documented use of the term was in the New York Times in 1935.
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. Other economists state that blaming automation is an example of the luddite fallacy and that jobless recoveries stem from structural changes in the labor market, leading to unemployment as workers change jobs or industries.
Recent employment trends in the USA
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Jobs are constantly being created and destroyed in a dynamic economy emphasizing competition like the USA currently has. As a statistical matter, the low number of net jobs created in the decade 2000–2009 is due to a low number of new jobs created, not due to an especially higher than usual number of jobs destroyed (net jobs is new jobs created minus old jobs destroyed). This was a trend observed even in 1987 and it has accelerated dramatically since, with many US communities dependent on textile manufacturing experiencing "severe hardships". But also during that time, a large number of service industry jobs have been created, such as in teaching, in prisons, in food services, in government, in hospitals, and in the computer industry, for an overall continued growth in employment. This reflects comparative advantage.
In the years 2008 and 2009, initial jobless claims in the USA moved up from the usual 350,000 initial jobless claims per week in previous years to 500,000 or more a week. This reflected a situation where there was only one new job created for about every six unemployed workers; in some industries the ratio was higher and in others it was lower. This is sometimes depicted as like the "stalling" of some jobs creation engine. This stalling metaphor reflects a political emphasis in a dynamic US economy on creating new jobs rather than preserving existing jobs. It can often be pointless to try to preserve some specific old jobs, as many specific jobs may gradually become obsolete from technological change, like replacing some bank tellers with ATMs.
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. 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
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.
Surprisingly, the U.S. Bureau of Labor Statistics (BLS) does not offer data-sets isolated to the working-age population (ages 16 to 65), including retirement age individuals in most BLS data-sets may tend to obfuscate the analysis of employment creation in relation to population growth. 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, is a strict definition of those officially unemployed (U-3), and those who are officially employed (1 hour or more).
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. 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 95% jobless rate when compared to the added working age population.
|Civilian noninstitutional population||Working-age Population||Employment Levels||Working-age Employment|
|Year||Age: 16 years & over||Age: 65 yrs. & over||Age: 16 to 65 yrs.||Growth - Decade||Age: 16 years & over||Age: 65 yrs. & over||Age: 16 to 65||Growth - Decade||Percent Emp.|
|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 
|Series Id: LNU00000000 Not Seasonally Adjusted Series title: (Unadj) Population Level
Labor force status: Civilian noninstitutional population Age: 16 years and over
|Series Id: LNU02000000 Not Seasonally Adjusted Series title: (Unadj) Employment Level
Labor force status: Employed Age: 16 years and over
|Series Id:LNU00000097 Not Seasonally Adjusted Series title: (Unadj) Population Level - 65 yrs. & over
Labor force status: Civilian noninstitutional population Age: 65 years and over
|Series Id: LNU02000097 Not Seasonally Adjusted Series title: (Unadj) Employment Level - 65 yrs. & over
Labor force status: Employed Age: 65 years and over
Notes and references
- U.S. Heads for Third Straight Jobless Recovery. Morning Edition, National Public Radio. 16 Oct 2009.
- "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 ..."
- 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?" 9 (8). Federal Reserve Bank of New York.
- The U.S. Textile and Apparel Industry: A Revolution in Progress
- About the U.S. Textile Industry: U.S. Employment Stats
- Chart of Initial Jobless Claims
- Jobless Claims Jump To 3-Month High, In Latest Troubling 2010 Economic Data
- America's Job Creation Engine Was Stalled
- 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". Cato Journal, Vol. 32, No. 1 (Winter 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."
- "Bureau of Labor Statistics". Current Population Survey. Bureau of Labor Statistics. Retrieved 9 November 2013.
- 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.