A Big, Giant, and Mostly Ignored Reason for Jobless Recoveries


Note: above graph from 2013 and is, thus, outdated.
FireShot Screen Capture #009 - 'FRED Graph - FRED - St_ Louis Fed' - research_stlouisfed_org_fred2_graph__g=4x6f

https://research.stlouisfed.org/fred2/graph/?g=4x6f

The decline of manufacturing! During the 1950s, a great deal of the job losses that occurred in recessions, as well as job gains that occurred following them, were either in the manufacturing sector or closely correlated with changes in manufacturing jobs, which tended to be created and re-created very quickly. In 2008, the non-manufacturing sectors were hit by far to the the hardest degree they ever were since the Great Depression, while the manufacturing sector was hit pretty normally.

Since the recession of 1990, there has also been an end to manufacturing recoveries leading the recovery in the rest of the job market. Manufacturing jobs lost due to temporary shocks to aggregate demand or supply are much easier to re-create than other types of jobs lost during recessions. However, since 1990, due to deindustrialization, they haven’t been being re-created; instead permanently vanishing from the pages of time (or moving to China).

The other part of the jobless recoveries, of course, has been a noncyclical decline in male (and, after 2000, female) labor force participation, as well as the demographic transition.

Author: pithom

An atheist with an interest in the history of the ancient Near East. Author of the Against Jebel al-Lawz Wordpress blog.

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