Jobless Growth
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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 Growth may refer to: Biology *Auxology, the study of all aspects of human physical growth *Bacterial growth *Cell growth *Growth hormone, a peptide hormone that stimulates growth *Human development (biology) *Plant growth *Secondary growth, growt ...
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 Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is the proportion of people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work du ...
. Other economists state that blaming automation is an example of the
luddite fallacy The term technological unemployment is used to describe the loss of jobs caused by technological change. It is a key type of structural unemployment. Technological change typically includes the introduction of labour-saving "mechanical-muscle" ...
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 ...
or
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 The infant industry argument is an economic rationale for trade protectionism. The core of the argument is that nascent industries often do not have the economies of scale that their older competitors from other countries may have, and thus need ...
, 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 (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 Baby boomers, often shortened to boomers, are the demographic cohort preceded by the Silent Generation and followed by Generation X. The generation is often defined as people born from 1946 to 1964 during the mid-20th century baby boom that ...
retirements are removed from the data as a factor for consideration. The table includes the Bureau of Labor Statistics,
Current Population Survey The Current Population Survey (CPS) is a monthly survey of about 60,000 U.S. households conducted by the United States Census Bureau for the Bureau of Labor Statistics (BLS). The BLS uses the data to publish reports early each month called the Em ...
, for the
Civilian noninstitutional population In the United States, the civilian noninstitutional population refers to people 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (penal system, penal, mental facilities, homes for ...
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.


See also

*
Deindustrialization Deindustrialization is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially of heavy industry or manufacturing industry. There are different interpr ...
*
Employment-to-population ratio Employment-to-population ratio, also called the employment rate, is a statistical ratio that measures the proportion of a country's working age population (statistics are often given for ages 15 to 64) that is employed. This includes people that ...
*
Global labor arbitrage Global labor arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international trade, jobs move to nations where labor and the cost of doing business (such as environmental regulations) are in ...
*
Involuntary unemployment Involuntary unemployment occurs when a person is unemployed despite being willing to work at the prevailing wage. It is distinguished from voluntary unemployment, where a person chooses not to work because their reservation wage is higher than the ...
*
Lost Decades The Lost Decades are a lengthy period of economic stagnation in Japan precipitated by the asset price bubble's collapse beginning in 1990. The singular term originally referred to the 1990s, but the 2000s (Lost 20 Years, ) and the 2010s (Lost ...
*
Offshoring Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state gover ...
*
Structural unemployment Structural unemployment is a form of involuntary unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap). Structural unemployment is ...


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