Some economic trivia: why high unemployment?. . .

“… since 1929, employment grew more than enough to keep up with raising population” (Econ 2020 Macroeconomics p85). 

 

Years 1929 to 2010:

~ population growth from 122 to 309 = 187 million = 153%

~ employment growth from 47 to 140 = 93 million = 198%
 

If true, WHY do we have current high unemployment?

Increased of women in labor force from 34% to 60% (p104) . . . or 26% increase

Decline of men in labor force from 86% to 73% (p104) . . . or 13% decrease

. . . so adding increase of women and decrease of men = net increase of 13% labor force
 

Sources of Unemployment (p106)

~ book cites 4 types of unemployment and estimates 4-6% unemployment is normal

~ (1 of 4) Cyclical unemployment = corporate layoffs due to recessions and depression
 

It seems although employment grew more than the population, I am guessing the labor force grew even more.  Along with above reasons for unemployment my speculations include:

Increased number of jobs exported overseas (employees in China and India earn less than 1/10 pay of US)?

Increased number of immigrants or new citizens? (2008 sees most new U.S. citizens in more than 100 years)

~ 1960s and '70s up to 200,000

~ 1980s up to 300,000

~ 1990s Congress voted to legalize 2.7 million

~ 2007 up to 886,000

~~ Increased number of unauthorized immigrants?

~~ from 8.5 million in 2000 to 11.8 million 2007

Finally “Employment during the decade increased by only about 4 million, not nearly enough to absorb the 13 million people joining the labor force. As a result, the number of unemployed swelled from 6 million in 2000 to 15 million in 2010, and the unemployment rate climbed from only 4% to 10%. This was the worst decade of employment growth since the Great Depression” (p104).

Considering the book’s “normal range” of 4-6%, this statement on page 104 seems to contradict the book’s statement on page 85.  I asked the economics instructor to explain.

Among friends: it seems we are exporting jobs overseas so corporations can earn ten times the revenue or at least reduce their employee cost by that amount; layoff their neighbors and stuff their pockets with more profit. Also, we are importing unauthorized immigrants by the millions who are consequently taking American jobs. Are American corporations and congress are in cahoots? We are in a very tough baseball pickle or rundown. 

 

Thank you,
Michael Rybin~۩~
Architecture is a wonderful life ™
Copyright © 2013 Michael Rybin All Rights Reserved.