January 24th, 2011
01:18 PM GMT
Out of work? Looking to find a new job? If you worked in construction, manufacturing or administrative services you may not want to even bother updating your resume. There is a good chance the job you lost during this last recession is never coming back. At least that is what some economists say.
Huge structural forces like globalization and technology mean companies can function without you. Sure, manufacturers still need to get products to market, but they are increasingly choosing to build and assemble them in Asia or India where people work for a fraction of the cost of an American.
Big blue-chip companies still need to do payroll and taxes, but they can now have a computer program do it … rather than a human being.
It is a brave new world out there where companies can be more profitable with less workers and employees need to retrain or get left behind …
Or is it?
Mike Konczal of the Roosevelt Institute says not so fast. “We are not less productive, less smart, less capable as a people ... as a nation. What happened is that we had a shock. We made a bad mistake thinking housing was worth more than it was. Bad mistakes happen all the time ... what matters is how do we get out of a recession, how do we rebuild the economy.”
Konczal falls into the camp of economists who believe cyclical factors are still driving the labor market. Yes, technology and globalization are having an impact. But those forces don’t explain why unemployment is almost double across every sector of the economy, even among young, highly skilled workers.
In order to fix the jobs problem Konczal believes U.S. lawmakers need to fix the U.S. housing mess. He makes a compelling argument. Traditionally America has a very fluid, mobile labor force. People regularly move their family thousands of miles to get a new or better job. In the 90s, that mobility was touted as a reason why the unemployment rate remained so low. It makes sense that with so many people unable to sell their homes that would work in reverse.
Does this debate over structural or cyclical unemployment really matter in the end? Yes. Understanding why unemployment is high will help policy-makers craft the appropriate response.
Should governments spend money trying to retrain displaced workers? Or should they fix the economy, force banks to modify mortgages and get demand moving again?
What do you think? Is it harder to find work? Do you believe your industry will bounce back after time, or are you making a complete career switch?
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