Re: the jobless future

["Devine, James" <jdevine@xxxxxxx>]

Title: RE: [PEN-L] the jobless future

This article reiterates one of the lessons of Okun's "Law," i.e., that real GDP has to grow faster than labor productivity if you want unemployment rates to fall. With recent surges of productivity growth, this "Law" has had a bigger impact.

It would be useful to distinguish between a "bourgeois recession" (where real GDP falls) and a "bourgeois recovery" (where real GDP rises) on the one hand, and a workers' recession and recovery on the other. In a workers recession -- one of which we are clearly in -- the number of jobs available grows more slowly than the trend of the labor force. In a workers' recovery, jobs grow faster than the labor force.

It's true we face a "jobless future," but I doubt that this future is forever.  Eventually, there will be a workers' recovery. But it's likely that all the wage gains and the lowering of the poverty rate of the late 1990s will have been more than totally reversed.

------------------------
Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine

> -----Original Message-----
> From: Eugene Coyle [mailto:eugenecoyle@xxxxxxx]
> Sent: Thursday, May 29, 2003 9:13 AM
> To: PEN-L@xxxxxxxxxxxxxxxx
> Subject: [PEN-L] the jobless future
>
>
>
> PAGE ONE
>
> This Recovery Feels Like Recession:
> Economy Expands, Payrolls Shrink
>
> By JON E. HILSENRATH
> Staff Reporter of THE WALL STREET JOURNAL
>
> Economist Robert Hall has been puzzling over a thorny question for
> nearly a year: What do you call an economy that has started expanding
> again but keeps destroying jobs?
>
> Mr. Hall heads a committee at the National Bureau of Economic
> Research,
> an academic group in Cambridge, Mass., that declares when U.S.
> recessions begin and end. In May of last year, Mr. Hall and his
> colleagues believed the latest recession might be over. Consumers were
> spending more and economic output was rising. All that the committee
> members needed to see was a few months of uninterrupted job growth to
> announce the end of the recession. "It seemed like the timing was
> imminent," he says.
>