The Jobs Delusion
Mark Thoma points out that job growth is not just around the corner.
Perhaps we are on the cusp of accelerating employment growth, but next month will mark two years since the end of the recession. Thus, there’s been plenty of time for this acceleration to have happened already, yet job growth remains sluggish. For this reason I don’t think we can assume that accelerating job growth is just around the corner, and at present rates of job creation we are looking at five years or more until we reach full employment. That is far too long for those who need jobs today.
When unemployment is persistently high, permanent drop-outs from the labor force increase, more people settle for jobs below their capability, get stuck there, and end up permanently underemployed, and lifetime income is, on average, lower. These effects are particularly large for teens, but older workers can also find it difficult to find new employment after losing a job. Many settle for jobs far below their ability, or find a way to hang on until they are eligible for retirement benefits by living with family, doing odd jobs here and there, going on disability, or doing whatever it takes to survive until retirement benefits kick in.