Is high unemployment the 'new normal' even in a recovery?

Sunday, June 12, 2011, 10:00 AM

WASHINGTON -- A "new normal" is emerging for the U.S. jobs market, and a growing number of economists warn that it's likely to mean that unemployment will remain persistently high, at 7 percent or more, for years to come.

The 9.1 percent unemployment rate reported in May remains high by post-World War II standards long after the economy resumed growth following the worst recession in 70 years. It's prompting economists to rethink basic assumptions about the U.S. labor market.

At issue is what's called the "full employment" rate. It's generally thought to be the rate at which everybody willing and able to work can find a job. It's a theoretical "ideal" rate; "full" employment can't be zero because there'll always be people transitioning between jobs, others with disabilities and those who aren't interested in working or who have given up finding work who'll be excluded from the workforce.

For much of the 1980s, the unemployment rate hovered between 6 percent and 7.5 percent. During the mid-1990s, the rate fell steadily to around what economists came to consider the rate of full employment -- 5 percent. Anything above that would signal inefficiencies in the economy.

More: http://www.cleveland.com/business/index.ssf/2011/06/is_high_unemployment_the_new_n.html

If you take out the wealthiest 15 of Americans, the economy is a complete catastrophe.

There's work to be done, and taxes to collect from the Obscenely Wealthy to pay for it.

at least 10 years. I heard this comment on at least TV Channels
this past week. Fox, Bloomber, C.Rose Show.

This has been brought about by Globalization (Poorly managed
or rather no management of Trade Policy. A Decision was made
years back to make our Country a Service Economy. They discovered
too late in the game that this economy cannot be sustained on
Banking and Finance, Tourism and Retail. Outsourcing and
relocating jobs to other countries for cheaper labor with
no oversight meant we gutted our country of a Mfg Base
and higher wage jobs. Sure we have some jobs --Computer
Tech but the Asian Tigers have proven themselves to be more
than competitive, so has many many other countries. So
much for the empty promise --that America would keep HI TECH
let Mfg. go to other countries.

Guess what the GOP are pushing 3 more Trade Deals. Will
Obama sign these???

Get ready for a long haul of nothing but High Unemployment.
No one is willing to make the changes necessary to turn this
around sooner.

yes, he will do as he is told by those who hold the real power.

done to turn this around. Soup lines and tent cities are here now, you just dont hear about it on the corp-media.

if your avatar was Metzenbaum, but I right clicked on it and it is Sanders. Either one is a compliment.

the DC.

they are (were in Metzenbaum's case) people who did not back down. They have (had) spine.

Be decreasing the number of workers covered the reported unemployment rates are nowhere near reality. As the growing legions of the poor increase dramatically we simply don't talk about it and thus the problem doesn't exist.

Technology has made companies much more productive than they used to be, so they don't need as much labor. They don't need new workers right now. We should reduce the work week, and keep the same weekly/monthly pay, and then companies will have to hire to make up for lost labor. Companies can afford this right now.

Decreasing the retirement age is another way to do the same thing, but no one in either party is going to say, let's start SS payments earlier in this fiscal climate.

In order to grow the economy energy is required. China's economy, for instance, consumes massive amounts of imported energy, which they can afford because of their massive exports of goods. The US is in no position to increase our domestic energy supplies, and we haven't the ability to import much either, or at least to ramp up our imports. Without more energy, or even a plan for more energy, there is no real plan for economic growth.

I imagine, by hook or crook, we can dabble along as we are at a respectable 1-2% growth. Looking at the long term energy situation, from a future perspective that may be an outstanding number.

All of which is more or less ok - the country is not experiencing systemic collapse, in spite of the volume of individual difficulties. As long as enough people are doing ok, then a social safety net can exist. Where problems really come up is when you combine a fast-growing population with a slow-growing economy. Essentially, because the number of people keeps going up faster than the economy, every month we are another 75,000 or so jobs in the hole.

Or in another way, every day that goes by there are more people trying to share an amount of goods that stays roughly the same, or more people trying to find a seat at a table that is not getting any bigger.

Reagan administration defined "full employment" as 2% unemployment. They said that 0% unemployment was impossible, since some people are always between jobs, but that 2% was achievable. (Indeed, Japan had 2% unemployment for years until the collapse of its bubble economy, and Norway has come close even in recent years.)

Enter the Reagan administration, and all of a sudden, "full employment" had been redefined as 5% unemployment--a de facto admission that their policies couldn't achieve REAL full employment.

"There are too many people at work!!!. Hyperinflation is immanent!!!!"