Are we entering an era with higher structural unemployment?

Until about three years into the term of our next Conservative president.

quote:

---

With the decline of several historical U.S. indusrties (at least from a manpower standpoint), will we see elevated unemployment for an extended period of time (like 10-15 years)?

---

I have been wondering the same exact thing for a few years now, and I'm pretty sure you are right. It will lead to an increase in income inequality, resulting in an even more progressive tax structure (the politics of congress or the president won't fricking matter you political tards).

quote:

---

I have been wondering the same exact thing for a few years now, and I'm pretty sure you are right. It will lead to an increase in income inequality, resulting in an even more progressive tax structure

---

We certainly won't be getting back to 5-6% unemployment anytime soon. But it will happen with the aging of our population even with them staying in the workforce longer.

We'll probably eventually see employment shortages in some professions. But the increased tax burden of a large chunk of the population older and drawing what's left of SS and medicare will drive up taxes on those left working.

quote:

---

Our national deficit won't help things either if we decide to pay it back (which I don't really think we will, in full at least). Countries like China aren't as powerful as perceived imo.

---

Obviously we won't pay it all back. In fact it would be unneccesary. Government debt to it's own end is not a problem if it's kept in check. BUT we can't let it get to a level where it can obviously never be paid back or it will seriously jeprodize our currency.

Our threat comes from within and not from China.

I'm of the same opinion as you on most of that stuff. People have been talking about this for the better part of 2009. Quick search through the GReader pulls up this article from December: LINK ][LINK]

Mauldin:

quote:

---

"I don't think many people grasp just how much job creation we need to climb out of the hole we're in. You can't just look at the eight million jobs that America has lost since the recession began, because the nation needs to keep adding jobs - more than 100,000 a month - to keep up with a growing population. And that means that we need really big job gains, month after month, if we want to see America return to anything that feels like full employment. How big? My back of the envelope calculation says that we need to add around 18 million jobs over the next five years, or 300,000 a month. This puts last week's employment report, which showed job losses of "only" 11,000 in November, in perspective. It was basically a terrible report, which was reported as good news only because we've been down so long that it looks like up to the financial press."

That just goes to show you that I am an optimist. His back-of-the-napkin number is 20% larger. He is probably right, as he has a Nobel Prize and I don't, and I didn't actually use a napkin. I did the math in my head on camera while we were getting ready to go fishing.

---

quote:

---

And just to demonstrate that I am not being too pessimistic, you can go to a study the Bureau of Labor Statistics put out yesterday. They estimate that the economy will create 15.3 million more jobs in the next ten years, which is an average of about 1.5 million a year, or 125,000 a month. That is not a robust number, and suggests that the continued high unemployment projected in the graph above may not be far off target, as the employment assumptions are not that dissimilar. If you have no social life, you can read it yourself at LINK

---

That editorial piece describes my position perfectly.

quote:

---

Not exactly. He's asking if more people will be permanently unemployed. I'm saying that all those people that got laid off will eventually find jobs, they just won't be making as much money because their most marketable skill sets are no longer as valuable.

---

This makes sense. I just think there will be more of a balance between unemployment rates rising and wages dropping than you do. (You seem to put more weight on wage changes than I would).

quote:

---

You can't just look at the eight million jobs that America has lost since the recession began, because the nation needs to keep adding jobs - more than 100,000 a month - to keep up with a growing population.

---

kfizz, I don't have any hard data on what I'm about to write except for some sporadic analysis articles that I have read from time to time, but I'm not sure population growth is the key to needing 100,000 jobs/month.

When the baby boomers start retiring en masse, I think we will see a huge deficit of qualified labor, in spite of population growth. The baby boomer "bulge" has impacted every area of our economy at different stages of their lives, from needing a massive number of additional schools when they were kids, to now needing a massive number of additional professionals in the medical field. (Just look at the employment classified ads on Sunday. Ads for medical jobs almost equal all the other advertised jobs combined.)

When boomers really hit the retirement part of their life cycle, I think employers will be begging for job applicants. I remember reading one article a couple of years ago that said when boomers reach their retirement peak, it will create upwards of one million job openings...a MONTH.

Considering that the job loss in this Great Recession has been 8 million jobs, the retirement of the boomers will cancel that out in less than a year.

Being as that is a quote from Krugman, I feel pretty confident he is considering demographic changes in that estimation. He may be a political hack, but I can't imagine that any economist worth a damn, much less a Nobel winning one, would ignore demographic changes in making that estimation. Either way, it's still an academic way to view the situation, IMO. Something will probably happen in the next 5 years that will significantly alter that straight-line estimation, and either way, it doesn't change the fact that near term (lets say pre 2013 for the sake of the argument), employment in the US is going to be structurally high by historical standards.

quote:

---

I'm not sure if we'll have higher structural unemployment, but there are a lot of people with very specialized skill sets that will find it hard to be similarly overpaid. (finance/lending/housing/construction/NASA engineers) Those people will work again, they just may never be as overvalued to the economy as they once were.

---

Remember when html "web developers" were fetching 3-figure per hour rates?