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

macroeconomy Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and ...

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 grow ...

while maintaining or decreasing its level of

employment Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any o ...

. 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 proces ...

through

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

has allowed

economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate o ...

without reducing

unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...

. Other economists state that blaming automation is an example of the

luddite fallacy Technological unemployment is 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" machines or more efficien ...

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 el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...

oligopoly An oligopoly (from Greek ὀλίγος, ''oligos'' "few" and πωλεῖν, ''polein'' "to sell") is a market structure in which a market or industry is dominated by a small number of large sellers or producers. Oligopolies often result f ...

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

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 and new entrants 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 U.S. government in the broad field of labor economics and statistics and serves as a principal agency of ...

(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 Western demographic cohort following the Silent Generation and preceding Generation X. The generation is often defined as people born from 1946 to 1964, during the mid-20th century baby boom. ...

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, mental facilities, homes for the aged), a ...

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