Jobs That Aren’t Coming Back

[frigidmagi]

NYTimes

[quote]I had an article today about structural unemployment — the idea that some people are out of work not only because demand is relatively weak, but because their skill sets don’t match what employers want (for example, they are highly specialized auto workers, but the only local job opening is for an oncologist). The typical causes of structural unemployment are the three T’s: trade, technology and changing tastes (e.g., consumers want more iPods and fewer C.D. players).

We care about structural unemployment because it means many of the jobs lost during the Great Recession may not come back in the recovery. And that has important implications for public policy, and how the government can or should be helping the jobless.

Cyclical forces and structural forces are hard to disentangle, especially since structural forces, like a long-term decline in American manufacturing, generally accelerate when demand is especially weak and businesses feel especially pressured to cut costs and find more efficient ways of getting things done. A weak economy can also give employers an excuse to trim less productive workers whom they would have let go eventually.

We’ve seen this phenomenon in previous recessions, and this paper by Erica Groshen and Simon Potter does a nice job of laying out a few reasons why structural unemployment may help explain the “jobless recoveriesâ€