A jobless recovery or jobless growth is an economic phenomenon in which a

macroeconomy Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (econ ...

experiences growth while maintaining or decreasing its level of

employment Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a cor ...

. The term was coined by the economist Nick Perna in the early 1990s.

Causes

Economists are still divided about the causes and cures of a jobless recovery: some argue that increased

productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proce ...

through

automation Automation describes a wide range of technologies that reduce human intervention in processes, mainly by predetermining decision criteria, subprocess relationships, and related actions, as well as embodying those predeterminations in machine ...

has allowed

economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...

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.

Industrial consolidation

Some have argued that the recent lack of job creation in the United States is due to increased industrial consolidation and growth of

monopoly A monopoly (from Greek language, Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic Competition (economics), competition to produce ...

oligopoly An oligopoly () is a market in which pricing control lies in the hands of a few sellers. As a result of their significant market power, firms in oligopolistic markets can influence prices through manipulating the supply function. Firms in ...

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

US Employment growth vs Population Growth by decade

In addition to employment growth, population growth must also be considered concerning the perception of jobless recoveries. Immigrants (both legal and illegal) added 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 The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. It is the principal fact-finding agency for the government of the United States, U.S. government in the broad field of labor economics, labor economics and ...

(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 5% jobless rate when compared to the added working age population.

Notes and references

External links

Exploding Productivity Growth: Context, Causes, and Implications
{{DEFAULTSORT:Jobless Recovery Impact of automation Universal basic income Economic growth Unemployment Unemployment in the United States

Causes

Industrial consolidation

Population growth vs. employment growth

See also

Notes and references

External links