Is Unemployment Cyclical Or Structural?

by Guest Thu May 19, 2011 8:56 am

In other words, the wave of joblessness in America is mostly due to cyclical factors, not inherent structural weaknesses, the paper finds.

The causes of persistently high unemployment since the financial crisis are still a matter of debate. Paul Krugman wrote last September that "structural unemployment is a fake problem, which mainly serves as an excuse for not pursuing real solutions."

Since the financial crisis, a rising unemployment rate has transformed into an all-out unemployment crisis, reaching 10.1 percent in late 2009 from 4.4 percent just two and a half years earlier. By April 2011, it had dropped only somewhat, to 9.0 percent.

The report contends the Great Recession closely mirrors the recession of 1973-1975, another period when shocks to various industrial sectors also played a large role in the rising unemployment.

http://www.huffingtonpost.com/2011/05/16/us-unemployment-crisis-structural-cyclical_n_861745.html

by suri Thu May 19, 2011 12:06 pm

My own life history tells me this is nothing like unemp experienced in the past 40 years! The great nation is breaking it promise to it's citizens when year after year nothing is addressed for millions of unemp, let alone the new grads coming into this mess! sorry

by lendmeflight2 Thu May 19, 2011 2:18 pm

Well, it's both. Unemployment IS cyclical but you cannot manipulate and destroy an economy, eliminate millions and millions of jobs and then say "bad luck for you, the unemployment rate is a cyclical problem, nothing we can do".

The free market allowed people to take HUUUUUGE risks knowing that they would be subsidized if they lost everything. They killed millions of jobs and now the program to help those people is running out of steam and funding.

The saddest thing is that no one has learned anything. As I was walking through my neighborhood yesterday I saw an empty house for sale. The house has been empty for months and now it has a For sale - Newly renovated" sign outside. The house flipping economy that greatly lead to the mortgage crisis is already back.

by americatheneedy Thu May 19, 2011 8:10 pm

Neither it's permanent. LOL

by Guest Thu May 19, 2011 8:48 pm

Couldn't agree more lendme. As the world advances so do industries, things change to stay competitive, other things become obsolete so that's cyclical. But when we allow greed to take over common sense and millions not only lose money but many millions lose jobs because of it, that's just greed in my opinion. There are many ways we could put this country back on top and create millions of jobs for the unemployed, but we have greed stopping it. It takes money, stimulus, whatever you want to call it, to fund projects that will hire. Every state in this country needs their utilities updated, bridges repaired, roads widened, lanes added, new tracks for better train connections state to state and cross country. We all need larger, updated airports set to today's standards, not pulled together using old equipment, out of date security standards, let's not even go to the baggage claim area. Across the country, the federal government subsidizes through Section 8, affordable housing. These houses should be mandated to meet certain requirements, such as energy efficient, well insulated, decent windows, updated lighting that is more cost effective, everything, right down to appliances or they would lose their subsidies. The Federal Gov't also subsidizes LiHeap the heating program. How many people could be employed making apt buildings and home meet that code, and how much money could be saved by doing it But instead, the building owners get money for going Section 8, they get tax incentives and they get the government backed funds to make up the difference in rents. If we wanted to, there are many ways to create jobs and get back on track, but everytime someone tries to introduce it, it's shot down.

by Guest Thu May 19, 2011 8:51 pm

I think it's both. That's why I favor the Spain Mondragon Cooperative Corporation type theory - 100,000 strong now, so they say. The workers choose what sort of products, and research to spend the corporations revenue on. It's the workers themselves who sustain their jobs/careers by taking care to make products and provide services that are real and needed. Not some bubble that is created for the greedy corporate executives or their greedy board of directors.