Saturday, December 18, 2010

Structural Unemployment?

The blog Beat The Press writes that Reuters is off base in discussing “structural unemployment” because the criteria demonstrating that phenomenon are missing.

“For example, there should be high rates of job openings, which would suggest that there are sectors of the economy or regions of the country in which employers are having difficulty finding workers,” Beat The Press says. “If the economy's main problem is structural unemployment then there also should be sectors where wages are rising rapidly as firms are forced to compete for an inadequate supply of skilled workers,” and, “If the main problem is structural unemployment then we should also expect to see sectors where workers are putting in large numbers of hours.”

We can play all of the word games we want to, arguing about the meanings of “structural,” but as long as there are five or more applicants for every job opening, I would say that the unemployment issue is solid enough to be considered structural. How do you define unemployment as "cyclical" when there are no jobs and no prospect of those jobs returning?

How many television sets which are manufactured overseas need to be sold in this country create one job in the United States, and what is the actual value of the job which it creates?

Bailing out the auto companies was one of the only really good economic moves we have made. So the bad managers were unfairly rewarded – who the hell cares? Manufacturing jobs were saved and created, the production of this nation gained. That move was purposed toward the real national product and not toward some fictional financial “product” existing only on paper and contributing only to the stock market.

We should be making similar bailouts for television makers, computer makers, coffee pot makers, paper clip makers, ball point pen makers…
We should be financing, forget "tax credits," financing companies who will be re-creating a nation which makes what it uses rather than importing it. Then, and only then will unemployment cease to be a chronic and painful issue, which is my definition of “structural.”

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