The Crisis: Long-term structural unemployment


I ran across a couple of articles today on unemployment; one from the New York Times and another from the Atlantic.  The focus of both articles was on the nature of the unemployment situation we have at hand, which is projected to persist for the long-term (next 10 years) and is structural in nature. That’s to say that many of the jobs won’t return simply because they’re no longer needed.

One can not underestimate the impact of technological advances and their contribution to structural unemployment.  I was speaking with someone a few days ago who used to sell tax research materials to CPA’s and tax attorneys.  This stuff used to come in books, then it begin coming in CD’s and now you simply download your subscription from the web.  Hence, there’s little need for a salesman to come by and secure your renewal.  There are a great many jobs like this that have been or will be eliminated with technology.

Technology is also driving down occupancy costs as the internet allows one to do work anywhere.  Larger corporations and some small businesses are allowing more and more people to telecommute full time.  There’s a double benefit here as telecommuters are far more productive so productivity rises while space costs are eliminated.  As this trend takes hold, there will be tons of commercial office space laying fallow.  That will create problems for commercial real estate and the banks on top of the issues they’re dealing with now.  Ironically, the displacement of workers by technology was going to occur anyway and the poor economic conditions are just an overlay.

The Atlantic article got somewhat interesting its focus on the impact chronic joblessness will have on white men.  The article implies that the high jobless rates that have plagued African-American communities may presage the onset of widespread social dysfunctions among whites.  Here’s an excerpt from the article:

If it persists much longer, this era of high joblessness will likely change the life course and character of a generation of young adults—and quite possibly those of the children behind them as well. It will leave an indelible imprint on many blue-collar white men—and on white culture. It could change the nature of modern marriage, and also cripple marriage as an institution in many communities….

As to the level of unemployment that’s non-technologically driven, neither article focuses on how we got here. That part is accounted for by crony capitalism and corruption at the highest levels of government and commerce.  Basically, our economic and political systems are broken and under the sway of  those who have the money to buy influence.  It’s clear that some folks are feeling this.  Here are a few comments on the Times article that I find telling.  The anger over this is palpable:

Miss Clare

Boston, MA

February 20th, 2010

9:54 pm

The unemployment situation just gets more and more volatile. No jobs, unemployment benefits ending, foreclosures, IRS getting n-n-n-n-asty on top of it all, by iron-fisting those who are already beat down financially. A hungry man is an angry man and I believe we’ll see more homeowners “bulldozing” their own homes, more people going “postal,” or flying planes into government buildings, and generally doing insane things because they HAVE NOTHING TO LOSE, including their sanity. Our government bails out big banks insurance companies, and auto makers, runs to the aid of Haiti and leaves it’s OWN starving, cold and homeless. The PEOPLE should have been bailed out, not the big bank parasites and false witnesses who made this mess in the first place. Now, the IRS is siccing their dogs on us. Talk about kicking a man while he’s down. No wonder people are losing it mentally. The propagandists keep saying the economy is getting better. Really? Am I missing something? Oh, you mean only for those big bankers. IT’S GETTING WORSE and it’s getting dangerous!




February 20th, 2010

9:54 pm

The Republicans rail against socialism and that is exactly the kind of state that they have created. Their corporate cronies off shored good paying jobs for the sake of obscene profits decimating entire US communities and eroding their tax base so that schools and infrastructure suffered causing a further decline, a death spiral. They lowered taxes on the wealthiest 10% of the population, pursued two unfunded wars costing over a trillion dollars and let Wall Street go unregulated until not only had they wiped out savings but necessitated corporate welfare for those too big to fail. Now we face the prospect of a long term “nanny state” thanks to those brilliant free market guys and their cronies. The price of the burgeoning US slave class is endless unemployment compensation. Sounds like certain countries in Europe doesn’t it and they have the gall to call Obama a Marxist socialist


Denis Neville

Olathe, KS

February 20th, 2010

10:30 pm

The new poor…what has happened to their jobs, their pensions, their security and the America they believed in?
What has happened, according to Sheldon Wolin, is the increasing cohabitation of state and corporate power.
“So power and greed ran riot, contaminated and pillaged everything, and held nothing sacred or worthy of respect until the Romans plunged themselves to their own destruction.” – Sallust, War with Jugurtha
As Bill Moyers said, “Those who write the checks keep buying the results they want at the expense of the public. As a reputedly self-governing democracy, we desperately need to address the problems that we have created for ourselves, but money makes impossible the reforms that might save us. Nothing in this country seems to be working to anyone’s satisfaction except the wealth machine that rewards those who game the system. Unless we break their grip on our political institution, their power to buy the agenda they want no matter the cost to everyone else, we’re finished as a functioning democracy.”
Like the Titanic, but with even fewer lifeboats.



Ho Chi Minh City

February 20th, 2010

9:25 pm

“Economists fear that the nascent recovery will leave more people behind than in past recessions, …”
One of the disappointing things about this is that only just now are “economists” speaking out. The current unemployment situation was predictable, with 80-90% certainty, at least a year ago, to anybody who’d gone beyond Econ 101. However, the only prominent economist who spoke about it then was Elizabeth Romer.
Summers, Volcker, Krugman, and all the spineless bought-and-paid-for econ profs in America studiously ignored it. If, a year ago, this great herd of sheep had shown a little independence, its opinion might have made a difference. Instead, they wait until now to express their fear, when half of the third-graders in America are already well-aware of the problem.
The economics profession has failed the country.




February 21st, 2010

9:15 am

At 62 I became too expensive for the small, private school I worked for, and they fired me as a consequence of a severe budget shortfall – one that I predicted and worked to prevent. A year and a half later, I remain unemployed and unemployable – and based on a couple of interviews with schools and the comments of headhunters. Not how I envisioned my “retirement,” but I am afloat – unlike the bottom third who are in dire straits. Growing up in the midwest, I worked in the auto and glass plants that afforded good jobs for anyone who was willing to work hard. Those jobs are gone, sent overseas by corporate leaders who were urged on by Wall Street. Bush and his cronies were dreadful, smug acolytes of American businesses, and Obama is powerless in the face of such a dreadful mess. The bitter truth is that the jobs that once sustained our economy are NOT coming back, and as a result there will be considerable unemployment for years. The “knowledge economy” is a base canard – some can do that work, but most do not have the aptitude or the desire. America was a great industrial power because it made things, not because it managed things. The vile Wall Street plutocrats have no understanding or sympathy and are insulated from the pain and suffering that fill too many American households. This is our Great Depression, and the suffering has only begun. Henry Ford understood a key element of capitalism – well-paid workers are good customers. Unemployment checks won’t do much to “stimulate” the economy. We had our opportunity, and we blew it. Perhaps the Wall Street elite will become so upset with life in such a depressing nation, they’ll move somewhere else and destroy that economy.



Wilmington, DE

February 20th, 2010

9:17 pm

Whatever happened to Obama’s wisdom when he put healthcare ahead of fixing the unemployment catastrophe?
Linking healthcare to unemployment was Obama;s masterstroke but what matters the most presently–based on the two stories in this article–is to prioritize employment over healthcare.
One year wasted and neither healthcare nor unemployment is fixed. President Obama need not have been prophetic or intellectual to sense this but clearly he put his ideological focus (healthcare) into overdrive and here we are without either issue being fixe




February 20th, 2010

9:17 pm

Middle managers that lost there jobs in Manhattan and all over New York are now Begging!! for work from Indian companies in India. I have seen it with my owns eyes and heard it with my own ears. Desperate Executives that were marketers making 100 thousand plus a year are now at this moment praying that some project manager in INDIA! will have mercy and give them some work. HOW CAN AMERICANS ALLOW THIS TO HAPPEN!? MR. Patterson with all do respect you are clueless about the state of unfairness of unemployed New York Executives that at one time filled the restaurants, paid the big rents and paid the big taxes. They are now BEGGING Indian project managers for work. Wake up and smell the coffee New York because it’s an INDIAN BREW and its bitter sweet. Sweet for India and bitter for New York and the rest of America. Liberals better start reading the Tea Leaves. Because our jobs market is hemorrhaging because of this lunacy that has no economic logic to it what so ever. America seek out and BOYCOTT companies that are using India for their Accounting, Marketing and dozens of other projects that would have employed New York Middle Managers and Executives. When you ask these politicians about jobs they say “we can not directly create jobs” this may be true but what they can directly do is STOP JOBS FROM GOING OVERSEAS!!!!




February 20th, 2010

9:57 pm

The problem is complex, stemming from a combination of the outsourcing of American jobs for decades, with the hollow promise of them being replaced with better jobs in a “new economy”; coupled with the corruption of our public officials by the mega-wealthy that is as plain as day to all of us. This latter problem means that the MIC, Big Pharma, the banksters, etc., are all well taken care of, while middle class Americans are hung out to dry. As wages have stagnated and good jobs with decent benefits have disappeared to slave-wage countries, it is not even any sort of head-scratcher as to why we are now in such desperate straits.
While the special interests — particularly the MIC, frittering away trillions of $ under the guise of protecting us from phantom cave-swelling terrorists — suck the life out of our economy, we have been brought to the proverbial crossroads. Obviously, the only sane thing to do is whittle the military down to about 20% of its current size and abandon the notion of “full-spectrum dominance”. We need to end regulatory capture by nationalizing the banks. We need to tax the rich until they’re crying in their champagne glasses. And we need to start fixing this country’s rotting infrastructure and reorient our economy to a sustainable one.
We put a man on the moon in 1969. We can do this, friends. All it takes is the people rising up and demanding it.

2 Responses to “The Crisis: Long-term structural unemployment”
  1. Jeff Moore says:

    In 68 MLK was still basing his speeches on Biblical ideas, but he was testing those leaders around him in a new way for a new battle, one that we still haven’t begun to fight. He said: “This country needs a radical redistribution of wealth and power”.
    Though his instincts were moral, his mind had begun to accept something he knew all along: Until regular people control the economy, the economy will whip saw regular people, and racism, scapegoating, unemployment, and war will always be at the top of the elite toolbox.

    • Greg L says:

      Though his instincts were moral, his mind had begun to accept something he knew all along: Until regular people control the economy, the economy will whip saw regular people, and racism, scapegoating, unemployment, and war will always be at the top of the elite toolbox

      Interesting point Jeff. Sometimes I think the problem is that the regular people purchased hook, line and sinker the ideas that were inimical to their own well being. I’m thinking here of the mindless consumerism that people engaged in that only benefited those with the “stuff” to sell. Of course, easy credit was made available to enable a lot of this which created a sort of slavery. This behavior was definitely shaped, but it required that people participate in accepting the ideas being sold.

      I think regular people controlling the economy begins with each of us making some decisions about how we control our personal economy while tuning out the noise that’s put out there to divert us. As it is, much of the behavior that the people have collectively engaged in has led to the great concentration of wealth and influence we’ve seen. I’d argue that we need a radical re-oreintation in how we’re thinking. Frequently, that takes leadership, but that’s sadly in short supply.

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