Jobless recovery

A jobless recovery or jobless growth is an economic phenomenon in which a macroeconomy experiences growth while maintaining or decreasing its level of employment. The term was coined by the economist Nick Perna in the early 1990s.^[1]^[2]

Causes

Economists are still divided about the causes and cures of a jobless recovery: some argue that increased productivity through automation has allowed economic growth without reducing unemployment.^[3] Other economists state that blaming automation is an example of the luddite fallacy^[4] and that jobless recoveries stem from structural changes in the labor market, leading to unemployment as workers change jobs or industries.^[5]

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 or oligopoly power.^[6] 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, applied at the level of industries, rather than individual firms).

Population growth vs. employment growth

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.^[7]^[8]

Surprisingly, the U.S. Bureau of Labor Statistics (BLS) does not offer data-sets isolated to the working-age population (ages 16 to 65).^[9] Including retirement age individuals in most BLS data-sets may tend to obfuscate the analysis of employment creation in relation to population growth.^[10] 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,^[11] is a strict definition of those officially unemployed (U-3),^[12] and those who are officially employed (1 hour or more).^[13]

Once again, the baby-boom generation has become a generator of change, this time in its retirement. Moreover, the jobless recovery of the 2001 recession, coupled with the severe economic impact of the 2007–2009 recession, caused disruptions in the labor market. In the first 12 years of the 21st century, the growth of the population has slowed and labor force participation rates generally have declined. As a result, labor force growth also has slowed. The Bureau of Labor Statistics (BLS) projects that the next 10 years will bring about an aging labor force that is growing slowly, a declining overall labor force participation rate, and more diversity in the racial and ethnic composition of the labor force.

Bureau of Labor Statistics, Monthly Labor Review, December 2013.^[10]

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 retirements are removed from the data as a factor for consideration. The table includes the Bureau of Labor Statistics, Current Population Survey, for the Civilian noninstitutional population and corresponding Employment Levels, dating from 1948 and includes October 2013, the age groups are 16 years & over, and 65 years & over.^[9] 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.

**U.S. Growth: Employment level growth Vs. population level growth by decade**
	Civilian noninstitutional population			Working-age population	Employment levels			Working-age employment
Year	Age: 16 years & over	Age: 65 yrs. & over	Age: 16 to 65 yrs.	Growth – decade	Age: 16 years & over	Age: 65 yrs. & over	Age: 16 to 65	Growth – decade	Percent emp.
1948	103,468,000	10,881,000	92,587,000		58,554,000	2,906,000	55,648,000
1949	104,524,000	11,191,000	93,333,000	—	57,712,000	2,926,000	54,786,000	—	—
1950	104,872,000	11,534,000	93,338,000		59,352,000	2,845,000	56,507,000
1951	104,810,000	11,918,000	92,892,000		60,252,000	2,858,000	57,394,000
1952	105,812,000	12,334,000	93,478,000		60,748,000	3,000,000	57,748,000
1953	107,623,000	13,257,000	94,366,000		59,796,000	2,882,000	56,914,000
1954	108,892,000	13,520,000	95,372,000		59,990,000	2,963,000	57,027,000
1955	110,296,000	13,925,000	96,371,000		63,268,000	3,213,000	60,055,000
1956	111,526,000	14,215,000	97,311,000		63,619,000	3,213,000	60,406,000
1957	113,013,000	14,516,000	98,497,000		63,598,000	3,089,000	60,509,000
1958	114,429,000	14,821,000	99,608,000		63,266,000	2,855,000	60,411,000
1959	116,040,000	15,148,000	100,892,000	7,559,000	64,927,000	3,024,000	61,903,000	7,117,000	94.15%
1960	118,001,000	15,508,000	102,493,000		65,287,000	3,176,000	62,111,000
1961	119,214,000	15,861,000	103,353,000		65,531,000	2,885,000	62,646,000
1962	121,236,000	16,880,000	104,356,000		66,585,000	2,821,000	63,764,000
1963	123,360,000	17,014,000	106,346,000		67,791,000	2,765,000	65,026,000
1964	125,468,000	17,296,000	108,172,000		69,543,000	2,913,000	66,630,000
1965	127,294,000	17,580,000	109,714,000		71,819,000	2,926,000	68,893,000
1966	128,730,000	17,860,000	110,870,000		73,600,000	2,892,000	70,708,000
1967	130,936,000	18,194,000	112,742,000		75,337,000	3,030,000	72,307,000
1968	133,120,000	18,500,000	114,620,000		76,699,000	3,086,000	73,613,000
1969	135,489,000	18,825,000	116,664,000	15,772,000	78,789,000	3,069,000	75,720,000	13,817,000	87.60%
1970	138,529,000	19,202,000	119,327,000		78,651,000	3,032,000	75,619,000
1971	141,666,000	19,605,000	122,061,000		80,527,000	3,005,000	77,522,000
1972	145,446,000	20,229,000	125,217,000		83,424,000	2,909,000	80,515,000
1973	148,479,000	20,536,000	127,943,000		86,390,000	2,787,000	83,603,000
1974	151,494,000	21,214,000	130,280,000		86,169,000	2,794,000	83,375,000
1975	154,589,000	21,803,000	132,786,000		86,689,000	2,680,000	84,009,000
1976	157,438,000	22,309,000	135,129,000		89,850,000	2,791,000	87,059,000
1977	160,377,000	22,874,000	137,503,000		94,183,000	2,903,000	91,280,000
1978	163,272,000	23,450,000	139,822,000		97,669,000	3,006,000	94,663,000
1979	166,300,000	24,067,000	142,233,000	25,569,000	100,013,000	3,002,000	97,011,000	21,291,000	83.27%
1980	168,883,000	24,597,000	144,286,000		99,579,000	2,907,000	96,672,000
1981	171,166,000	25,109,000	146,057,000		99,562,000	2,928,000	96,634,000
1982	173,199,000	25,619,000	147,580,000		98,849,000	2,878,000	95,971,000
1983	175,121,000	26,160,000	148,961,000		102,803,000	2,878,000	99,925,000
1984	177,306,000	26,712,000	150,594,000		106,049,000	2,797,000	103,252,000
1985	179,112,000	27,266,000	151,846,000		108,063,000	2,841,000	105,222,000
1986	181,547,000	27,791,000	153,756,000		110,588,000	2,909,000	107,679,000
1987	183,620,000	28,362,000	155,258,000		113,679,000	3,126,000	110,553,000
1988	185,402,000	28,875,000	156,527,000		115,978,000	3,264,000	112,714,000
1989	187,165,000	29,462,000	157,703,000	15,470,000	117,698,000	3,352,000	114,346,000	17,335,000	112.06%
1990	190,017,000	29,453,000	160,564,000		118,110,000	3,256,000	114,854,000
1991	191,798,000	29,893,000	161,905,000		117,395,000	3,193,000	114,202,000
1992	193,784,000	30,396,000	163,388,000		118,990,000	3,341,000	115,649,000
1993	195,794,000	30,784,000	165,010,000		121,578,000	3,394,000	118,184,000
1994	197,765,000	31,181,000	166,584,000		124,729,000	3,641,000	121,088,000
1995	199,508,000	31,629,000	167,879,000		125,136,000	3,676,000	121,460,000
1996	201,636,000	31,902,000	169,734,000		127,903,000	3,807,000	124,096,000
1997	204,098,000	32,071,000	172,027,000		130,785,000	3,933,000	126,852,000
1998	206,270,000	32,275,000	173,995,000		132,732,000	3,855,000	128,877,000
1999	208,832,000	32,538,000	176,294,000	18,591,000	134,696,000	3,984,000	130,712,000	16,366,000	88.03%
2000	213,736,000	33,590,000	180,146,000		137,846,000	4,244,000	133,602,000
2001	216,315,000	33,823,000	182,492,000		136,269,000	4,300,000	131,969,000
2002	218,741,000	34,004,000	184,737,000		136,599,000	4,248,000	132,351,000
2003	222,509,000	34,432,000	188,077,000		138,556,000	4,711,000	133,845,000
2004	224,640,000	34,796,000	189,844,000		140,278,000	4,902,000	135,376,000
2005	227,425,000	35,208,000	192,217,000		142,918,000	5,263,000	137,655,000
2006	230,108,000	35,841,000	194,267,000		146,081,000	5,617,000	140,464,000
2007	233,156,000	36,603,000	196,553,000		146,334,000	5,787,000	140,547,000
2008	235,035,000	37,522,000	197,513,000		143,350,000	6,084,000	137,266,000
2009	236,924,000	38,362,000	198,562,000	22,268,000	137,953,000	6,193,000	131,760,000	1,048,000	4.71%
2010	238,889,000	39,045,000	199,844,000		139,159,000	6,376,000	132,783,000
2011	240,584,000	40,364,000	200,220,000		140,681,000	6,893,000	133,788,000
2012	244,350,000	42,695,000	201,655,000		143,060,000	7,412,000	135,648,000
2013	246,745,000	44,155,000	202,590,000		144,423,000	7,748,000	136,675,000
2014	249,027,000	45,685,000	203,342,000		147,190,000	8,140,000	139,050,000
2015	251,936,000	47,269,000	204,667,000		149,703,000	8,552,000	141,151,000
2016	254,742,000	48,837,000	205,905,000	7,343,000	151,798,000	8,820,000	142,978,000	11,218,000	152.77%
Pre and Post 2000 Comparisons (working age)
				Pop. Growth				Employment Growth
1900s	1950 to 1999			82,961,000				75,926,000	91.52%
2000s	2000 to 2016			29,611,000				12,266,000	41.42%
Bold denotes datum used to produce "Working-Age: Growth Decade" calculation Decade example = End of year 1949 to end of year 1959 Source: Bureau of Labor Statistics, Current Population Survey^[9]
Series Id: LNU00000000 Not Seasonally Adjusted Series title: (Unadj.) population Level Labor force status: Civilian noninstitutional population age: 16 years and over
Series Id: LNU02000000 Not Seasonally Adjusted Series title: (Unadj.) employment Level Labor force status: Employed Age: 16 years and over
Series Id:LNU00000097 Not Seasonally Adjusted Series title: (Unadj.) population Level - 65 yrs. & over Labor force status: Civilian noninstitutional population age: 65 years and over
Series Id: LNU02000097 Not Seasonally Adjusted Series title: (Unadj.) employment Level - 65 yrs. & over Labor force status: Employed Age: 65 years and over

Notes and references

^ "INDUSTRY ADOPTS POLITICAL PLANKS FOR NEW DEAL WAR; OLD ORDER IS UPHELD". New York Times. 6 December 1935. Retrieved 10 November 2013. Pay Articles from December 1935 Part 7 - Site Map - The New York ...
^ Smith, Lisa (2010-08-17). "Jobless Recovery: The New Normal Since 1990 | Investopedia". Retrieved 2016-08-17.
^ Automatic Reaction, The Economist, 2010-09-09
^ Easterly, William (2001). The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, Massachusetts: MIT Press. pp. 53–54. ISBN 0-262-55042-3.
^ Erica L. Groshen; Simon Potter (Aug 2003). "Has Structural Change Contributed to a Jobless Recovery?". Federal Reserve Bank of New York.
^ Who Broke America’s Jobs Machine? Why creeping consolidation is crushing American livelihoods., by Barry C. Lynn and Phillip Longman, Washington Monthly
^ Camerota Ph.D., Stephen A. (October 2004). "A Jobless Recovery?: Immigrant Gains and Native Losses". Center for Immigration Studies. Retrieved 2 March 2014. Between March of 2000 and 2004, the number of unemployed adult natives increased by 2.3 million, while the number of employed adult immigrants increased by 2.3 million.
^ Peri, Giovanni. "Immigration, Labor Markets, and Productivity" (PDF). Cato Journal, Vol. 32, No. 1 (Winter 2012). Archived from the original (PDF) on 9 October 2012. Retrieved 2 March 2014. In this case firms pay immigrants less than their marginal productivity, increasing the firms' profits. Such cost-savings on immigrants act as an increase in productivity for firms.
^ ^a ^b ^c "Bureau of Labor Statistics". Current Population Survey. Bureau of Labor Statistics. Retrieved 9 November 2013.
^ ^a ^b Toossi, Mitra (1 December 2013). "Labor force projections to 2022: the labor force participation rate continues to fall" (PDF). Bureau of Labor Statistics. Retrieved 1 March 2014.
^ "Glossary". Labor Force. Bureau of Labor Statistics. Retrieved 2 March 2014. Labor force (Current Population Survey) The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary.
^ "Economic News Release". HOUSEHOLD DATA Table A-15. Alternative measures of labor underutilization. Bureau of Labor Statistics. Retrieved 2 March 2014.
^ "BLS Information". Frequently Asked Questions (FAQs). Bureau of Labor Statistics. Retrieved 2 March 2014.

External links

Exploding Productivity Growth: Context, Causes, and Implications

[New_York_Times-1] "INDUSTRY ADOPTS POLITICAL PLANKS FOR NEW DEAL WAR; OLD ORDER IS UPHELD". New York Times. 6 December 1935. Retrieved 10 November 2013. Pay Articles from December 1935 Part 7 - Site Map - The New York ...

[2] Smith, Lisa (2010-08-17). "Jobless Recovery: The New Normal Since 1990 | Investopedia". Retrieved 2016-08-17.

[3] Automatic Reaction, The Economist, 2010-09-09

[easterly-4] Easterly, William (2001). The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, Massachusetts: MIT Press. pp. 53–54. ISBN 0-262-55042-3.

[5] Erica L. Groshen; Simon Potter (Aug 2003). "Has Structural Change Contributed to a Jobless Recovery?". Federal Reserve Bank of New York.

[6] Who Broke America’s Jobs Machine? Why creeping consolidation is crushing American livelihoods., by Barry C. Lynn and Phillip Longman, Washington Monthly

[7] Camerota Ph.D., Stephen A. (October 2004). "A Jobless Recovery?: Immigrant Gains and Native Losses". Center for Immigration Studies. Retrieved 2 March 2014. Between March of 2000 and 2004, the number of unemployed adult natives increased by 2.3 million, while the number of employed adult immigrants increased by 2.3 million.

[8] Peri, Giovanni. "Immigration, Labor Markets, and Productivity" (PDF). Cato Journal, Vol. 32, No. 1 (Winter 2012). Archived from the original (PDF) on 9 October 2012. Retrieved 2 March 2014. In this case firms pay immigrants less than their marginal productivity, increasing the firms' profits. Such cost-savings on immigrants act as an increase in productivity for firms.

[BLS_POP_vs_EMP-9] "Bureau of Labor Statistics". Current Population Survey. Bureau of Labor Statistics. Retrieved 9 November 2013.

[Boomers_BLS-10] Toossi, Mitra (1 December 2013). "Labor force projections to 2022: the labor force participation rate continues to fall" (PDF). Bureau of Labor Statistics. Retrieved 1 March 2014.

[BLS_Labor_Force-11] "Glossary". Labor Force. Bureau of Labor Statistics. Retrieved 2 March 2014. Labor force (Current Population Survey) The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary.

[BLS_Underutilization-12] "Economic News Release". HOUSEHOLD DATA Table A-15. Alternative measures of labor underutilization. Bureau of Labor Statistics. Retrieved 2 March 2014.

[13] "BLS Information". Frequently Asked Questions (FAQs). Bureau of Labor Statistics. Retrieved 2 March 2014.

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Jobless recovery

Causes

Industrial consolidation

Population growth vs. employment growth

See also

Notes and references

External links

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