Disclaimer: I got this one wrong! Really wrong! My bad.
DeLong does not claim that our economy is experiencing structural unemployment. In fact, he argues the opposite, a lot. I made this a while back, and just messed up. I know better. Sorry.
DeLong argues that there’s no way that unemployment can be structural, because unemployment exploded after the financial collapse. It’s because of a lack of demand for goods and services and not an inadequate supply of good workers that has caused our unemployment situation.
But I’m going to keep up my mistake, for transparency.
I read a great blog post today: Identifying Cyclical vs. Structural Unemployment: A Guide for Slate Writers
Basically, if the economy was healthy but a part of the economy was suffering from decreasing demand and high unemployment, the economy would restructure to sectors where there are higher demands in goods and services, and jobs would relocate too. This is cyclical unemployment. However what we are seeing is Structural Unemployment, where the economy isn’t healthy and no sector has shown a shift to take in the unemployed in down sectors. Because well, almost every sector of our economy is down, and no sector is increasing even to adult population growth.
Well, over the past three years…
- employment in logging and mining has risen by 11 thousand
- employment in construction has fallen by 2.1 million
- employment in manufacturing has shrunk by 2.4 million
- employment in wholesale trade has fallen by 437 thousand
- employment in retail trade has fallen by 912 thousand
- employment in transportation and warehousing is down by 333 thousand
- employment in publishing, except internet is down by 147 thousand
- employment in motion picture and sound recording is down by 34 thousand
- employment in broadcasting, except internet is down by 41 thousand
- employment in telecommunications is down by 54 thousand
- employment in financial activities is down by 921 thousand
- employment in professional and business services is down by 1.3 million
- employment in educational services is up by 197 thousand
- employment in health care is up by 789 thousand
- employment in leisure and hospitality is down by 467 thousand
- employment in other serivces is down by 32 thousand
- employment by the federal government is down by 330 thousand
- employment by state and local governments is down by 127 thousand.
All this in the decline from 137.83 million people employed in July 2007 to 129.95 million people employed in July 2010–a 7.88 million decline in employment during a period in which the adult population has grown by 6 million.
I see employment growth in (a) internet, (b) health care, and (c) logging and mining. I see employment declines everywhere else.
The economy isn’t mismatched, it seems to be structurally unable to support traditionally full employment rates, where an unemployment rate is between 4-5%.
Happy Thursday everybody!