Another Jobless Recovery?

A very good question:

Jobless Recovery: The Economist’s Free Exchange blog takes a look at the concept of the jobless recovery. “it’s worth wondering why only recently extended joblessness after a downturn has become the norm. Perhaps the pace of structural change has increased, or maybe change in demand and supply for low-skilled workers has reached a critical inflection point. If growth in demand for low-skilled workers has slowed considerably while supply growth has increased, then workers may stay in unemployment for longer and longer periods. This will lead to skill erosion, making workers harder to hire, and downward pressure on wages, reducing the benefits of joining the labor force in the first place. Each time through the business cycle, the labor market at the bottom end of the skill spectrum will worsen. Not a pretty picture. But with output variables moderating while employment variables continue to sink, there is every indication that recovery from this recession, when it arrives, will do little for many of the unemployed for years to come. Time to start thinking about why this is the case, and what can be done about it.”

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11 Responses to “Another Jobless Recovery?”


  1. 1 Lauren Swartz July 8, 2009 at 8:04 AM

    The economic difficulties of having a large pool of unskilled workers could likely be mitigated by offering educational tracks at the middle and high-school grade levels that focus on developing low-achieving students work and technical skills. If students that aren’t having success in their academic studies, and thus don’t have prospects for a college education, were offered alternate paths for success through a differently focused school curriculum, they could enter the workforce with a skill to use in an actual profession. Manufacturing jobs, hospitality jobs and many others don’t require college degrees but do take a certain level of trainable skill- if our public schools identified the students most likely to become part of the pool of unskilled workers and could provide them with proper training while their education was still compulsary, we could potentially alleviate some of the strain discussed above.

  2. 2 Nathan Martin July 8, 2009 at 8:25 AM

    While I agree with Lauren’s idea about training the less academic students in the ways of booking hotel rooms and the in’s and out’s of an assembly line, I have a hard time believing that the government could pull this off. First it would involve identifying the less competent, which in our ultra-sensative society would be impossible without offending somebody. Another problem is that this is assuming that the problem is with intellect and not work ethic, which is a big assumption. My experience with young workers is not that they are not bright enough to complete the job, it’s if they will even show up every day, or if they have enough pride in thier work to have integrity and do the right thing when nobody is looking.

    I do agree with your idea though, and maybe if I wasn’t so cynical and frustrated, I could be optimistic about it.

  3. 3 Dave Stevenson July 8, 2009 at 12:43 PM

    This will be a bit off topic, and won’t solve the problem today, but a thought for our future based on Lauren’s response above.

    Maybe as a society, we need to stop generating such a large pool of “unskilled” workers in our school systems to start with. By constantly lowering our standards, we allow high school students to graduate with much less of an education than 15-20 years ago. I am in my thirties, with 16, 12 and 3 year old daughters. I have seen my 16 year olds high-school work and graduation requirements, and they are absurd. It’s stuff that my generation and my parent’s generation could have passed in the 6th grade without breathing hard.
    Why do we constantly allow our schools to lose funding, lower their standards, and push kids through the system? “No child left behind” – you have to be kidding. No wonder the world is passing us up.

  4. 4 Joseph Garcia July 8, 2009 at 8:38 PM

    Yes, in high school, it doesn’t take much effort to get your diploma. It seemed to me that the schools focused more on the honor students, rather than the average ones. While beneficial, realistically speaking there will be more average students becoming a part of the labor force. The problem is that the rest of the students absolutely hate schoolwork because they don’t see the value in it. The teachers play a role in sparking student interest, and these students hate most of them. Maybe if school didn’t seem like a waste of time to the them, we’d be doing better.

  5. 5 Jennifer Wienecke-Friedman July 9, 2009 at 7:17 AM

    We all can see that we need education to grow if not to maintain our economic health but we have policymakers in Sacramento who are slashing our kindergarten to community college funding. Our school alone is missing over $2.5 million from it’s budget next year and we have already made significant staffing cutbacks. Until we make our politicians make healthy policy changes, we will be subject to their mistakes.
    Anticipation of hard times does not mean needing to cut employees, it means needing to keep employees and diversify outputs. If our business models are failing we need to change them.
    With people out of work longer and longer, how can we keep the unemployed from becoming discouraged? Create industries that excite people to work for and buy from. I have noticed that more people are gardening and keeping chickens for eggs as the economy has worsened. To create new industry we must find what people are looking for then we will have a customer base to market ourselves to.
    Like our grandparents and their parents did in the Great Deppression of the 1930’s following the excess of the Roaring 20’s, we will learn to live more frugally and be satisfied with less, because the balance to the insatiability of the greed is the forced chastity of poverty.

  6. 6 Hailey July 9, 2009 at 9:19 AM

    NEW YORK (CNNMoney.com) — Lawmakers searching for a way to pay for health care reform are facing some rough waters.

    Very rough.

    Sen. Max Baucus, chairman of the Senate Finance Committee, has said repeatedly that health reform would be paid for with a combination of spending cuts and tax increases.

    Baucus and others have made some progress through savings in Medicare, Medicaid and other programs.

    On Wednesday, for instance, Vice President Biden said hospitals would reduce costs by $155 billion over 10 years. But nothing is final until that deal between the White House and business — and a similar one reached with drugmakers last month — is written into legislation.

    Follow the link to continue reading
    http://money.cnn.com/2009/07/09/news/economy/health_care_reform/index.htm?postversion=2009070909

    Personally the idea ofcontinuing to throw more of my hard earned dollars into taxes for others healthcare while I can hardly afford my own, is a hard pill to swallow. Understandably many unemployed workers right now need this money in order to remain healthy and return to the work force late when there are more available jobs, so on the flip side I feel these increases are necessary right now, but in the long run I’m not sure if this will remain a suitable solution to our entire nation’s healthcare problem.

  7. 7 Tanisha/ Econ 100 July 9, 2009 at 10:50 AM

    This is why the jobless should take advantage of this time and go to school. It is going to get harder and harder to get good paying jobs wheteher we are in recession or not. Unskilled workers would still be unskilled. And the skilled workers who have been layed off will be first pick. As for students learning skills for the job field while in high school, I do not beleive that is going to work. It’s a great idea, but until our politicians stop cutting services schools already have, along with teachers… then “special” classes for a student who wants to be ready for the work field will not be coming any time soon.

  8. 8 Jessie Maguire July 9, 2009 at 7:12 PM

    I agree with some of the views presented above regarding the idea that the K-12 education system caters to the honors students. These kids have a desire to learn and to be in school which makes the teachers and the rest of the staff more willing to aid them. Other students who are more “average” as some have put it do not have such a strong desire to be in school and thus teachers have a harder time inspiring them to work. It is also important to say that some of these students are not inspired because there is no push for them to learn at home. Parents are to blame as much as the educational system. How is someone supposed to want to learn to do something if no one is going to be there to help them and keep them going? Learning a skill takes time and encouragement since fewer and fewer people are willing to teach then fewer people can learn. It’s not fair to simply blame the educational system when there are many other factors involved in the production of unskilled laborers.

  9. 9 Wen-Li Chan July 9, 2009 at 9:55 PM

    It’d be great if the government can provide unemployment insurance and low-cost training at the same time. Unemployed people would have trouble finding jobs if their skill level stays the same. However, how many of them can afford to go to school and learn new skills? Even though most school provide financial aids, but just the thought of carring a hugh amount of debt even before you start to make money is very scary. The textbook mentioned that unemployment insurance makes people less motivated to find jobs and it is very true. I know people who woule rather stay unemployed. I know if one day I get laid off, I’ll enjoy the same benefit, but it’s hard to see people manipulate the system and waste my tax money. I’m sure if the unemployment insurance stops on the third or the forth month, it’d be a different story.

  10. 10 Evangelina Alvarez July 15, 2009 at 1:11 PM

    I agree with Tanisha about going back to school. Those that are low-skilled workers are going to realize that there are no benefits to sticking at a low end paying job if they can even get one. More and more we are hearing about moms going back to school now. I personally am in school and feel it is the best position in this economy. As the next two years pass and we get out of this economic downturn possibly, these newly skilled or better skilled workers as well as college students like myself will be more prepared to enter a better workforce with more to offer and hopefully more provided.

  11. 11 Sanamjit Bains July 29, 2009 at 10:12 PM

    People can have less incentive to get back in the labour market to get employed again when they are receiving benefits by being unemployed. But at the same time there are those who are going back to school and improving their skill to get better jobs that are in demand. For a better future of this economy these people should encourage and raise their children in such a way that getting a good education should be of importance to them.


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