If We’re In a Recovery, Where are the Jobs?

Last Wednesday featured an interesting and thought-provoking article on the state of the job market on the Foreign Policy web site.  The title, “10 Percent Unemployment Forever?” kind of says it all.

Scan virtually any financial news website, and you’ll see it’s now a consensus that a sustained economic recovery has not only arrived — it’s picking up speed.

But there’s good reason to believe that the labor market won’t be keeping pace. Rather than an aberration, high unemployment may be an enduring feature of the United States’ economy.

We are, sadly, in a very deep pit when it comes to the labor market. The recent private-sector estimate from ADP Employer Services announced the creation of 297,000 new jobs for December, but this is the first instance of a real dent in the jobless rate since the beginning of the recession.

This has been a problem for some time.  The past several recessions have taken much longer to recover lost jobs than those prior to 1991.  There are various reasons for this, which I won’t go into, but in this case it is particularly troubling because Corporate America is getting better and better at realizing large profits without hiring more workers here at home.  Part of this is due to shipping jobs overseas, and also due to cultivating overseas markets for what those overseas workers produce.

Besides, those jobs that we do create here in the US don’t pay as well as the jobs they replace, and wages remain stagnant.  This is why I think that we will need to find other ways of creating work and paying jobs that don’t involve large companies.  Local jobs created as part of local economies are a reasonable answer to part of the unemployment problem.  More on that another time.

PS-The unemployment rate–the real unemployment rate is much higher than the official 9.8% or whatever they’re calling it.  More on that another time.