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The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (December 2010) |
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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 the 1930s.[1]
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.[2] Other economists state that blaming automation is an example of the luddite fallacy[3] and that jobless recoveries stem from structural changes in the labor market, leading to unemployment as workers change jobs or industries.[4]
Recent employment trends in the USA [edit]
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)[citation needed]. 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".[5][6] 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.[7][8] 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.[9] 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.
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.[10] 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).
See also [edit]
References [edit]
