This comes from PBS of all places. It is little more than a propaganda piece for the international financial elite. Note two things--full employment is defined all the way up to 6 per cent, the rate Alan Greenspan said would keep the employees from asking for more benefits and wages, and the obvious solutions, ending outsourcing, offshoring and illegal immigration are not even hinted at. Go ahead, click on the link below, and post your comments.----rng
OK, we have let the some of the eggheads have their say. What do you think, do they have a grasp on the situation or not? It sounds to me like they are promoting a short-term solution to a long-term and profound economic problem. -----lee
Monday, November 22, 2010
Do you think the U.S. will ever return to full employment? Please post your comments.
SUSIE GHARIB: Call it the new labor market reality or perhaps extreme unemployment. Whatever the name, the numbers are staggering. The nation`s unemployment rate has remained above 9.5 percent for 16 months now, the longest stretch since the government started tracking it back in 1948. And as Suzanne Pratt reports, it could be years before Americans see full employment.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was FDR who put the concept of full employment on the table in 1944. That`s when he said having a job was a basic human right. Full employment is often defined as a condition in which everyone who wants work can get it, a veritable labor market nirvana. But full employment does not mean the unemployment rate is zero. That`s because there will always be some level of joblessness as people move from one position to another. So, economists say full employment means an unemployment rate probably closer to 4, 5 or even 6 percent. Whatever it is, right now the U.S. is a long way from it. And some experts question whether we`ll see it again. Economist Joe Davis says we will -- eventually.
JOE DAVIS, CHIEF ECONOMIST, VANGUARD: There are more Americans unemployed as of this morning than there are employed in the entire state of California. So, it`s the entire state of California effectively looking for work. So, by that metric, it will just take some time until you get back to more reasonable pre-recessionary job levels.
PRATT: But, business cycle expert Lakshman Achuthan says the problem is more complicated than replacing the eight million jobs lost in the recession. He says the economy is suffering from structural unemployment, meaning some workers may never get their old jobs back.
LAKSMAN ACHUTHAN, BUSINESS CYCLE EXPERT, ECRI: What you have there is big mismatch of the skills that they have to offer. Maybe in construction or in finance or other areas, that might have been related for example to the bubble industry, the bubble, the housing bubble.
PRATT: Evidence of that mismatch can be seen in current job market data. Of the unemployed, 46 percent have been without a job for six months or longer. And even worse, 31 percent have been jobless for a year more. Natacha Braxton is one of the faces of long-term unemployment. She has been out of work for more than two years and looks every day for a job in financial services.
NATACHA BAXTON: I get a call back maybe once a month or so and a second interview. But, then I get a response like they hired someone from within, or whatever the situation is. It`s just been really ridiculous, crazy.
PRATT: Braxton has been using the Jersey City-based employment agency Express to help her find a job. The agency`s owner, Deidre Viney, says extreme unemployment is new for her firm, too.
DEIDRE VINEY, OWNER, EXPRESS EMPLOYMENT SERVICES: From our standpoint, it`s tough sometimes to place them too because now you`ve got a huge gap in your employment. When I`m sending out their resumes to my clients, they say so what has she been doing for two years? You know what I mean? Are her skills fresh?
PRATT: Achuthan believes it will take an extended period of robust economic growth before we`ll see significant hiring of the long-term unemployed. That`s because firms only invest in retraining when there`s no one left to hire.
ACHUTHAN: We need a long expansion to reduce that. But, we`re not going to get that -- unlikely to get a long expansion. We should prepare for unemployment to be cycling up and down at relatively high levels, much higher than any of us are used to.
PRATT: Others, like NYU Professor Paul Wachtel are more optimistic, saying current high unemployment is not permanent.
PAUL WACHTEL, ECON. PROF., NYU STERN SCHOOL OF BUSINESS: I think over the course of two or three years, the unemployment rate will meander down if not to below 5 percent, to the 5, 6 percent range, which probably is in some sense palatable and reasonable.
PRATT: Both Davis and Wachtel also spoke about the resiliency of the U.S. private sector. They say Americans have a track record of reinventing ourselves and creating new industries.
WACHTEL: Historically it`s periods such as these that actually are the most fertile ground for future job growth and future productivity gains.
DAVIS: The experience of this recession doesn`t tell me in any way that that underlying characteristic of the American economy and American population has changed. So, I think things will sort themselves out.
PRATT: While things are getting sorted out, millions of Americans remain unemployed. Tomorrow we`ll take a look at the long-term effects of a high unemployment rate. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
GHARIB: How has unemployment hit your family? We`d like to hear your stories. Join the conversation on our blog. You can find it on NBR on pbs.org.
Do you think the U.S. will ever return to full employment? Please post your comments
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