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United States Employment Recovery is Still Slow By Lanbo Jiang

  in Business | Published 2012-02-19 07:09:15 | 185 Reads | Unrated


December 2007 to June 2009, US

Full Content

December 2007 to June 2009, U.S. employment dropped sharply, the unemployment rate from May 2007 to 4.4%, 10.2% in 2009 soared to a peak. And since the economic bottom has been picked up and unemployment reduced the employment rate is very low. November unemployment rate rose slightly from 9.6% 9.8%, and average employment growth over the past three months has been slow, the unemployment rate is almost motionless. Even more disturbing is that the proportion of people unemployed for six months or more than 40% has remained at a high level, far higher than the level of 15% before the recession.<
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Slow recovery of employment disturbing, because usually after a severe recession, the rapid recovery of the employment. For example, the rapid decline of the U.S. economy in 1981, resulting in December 1982 the unemployment rate as high as 10.8%, but then the unemployment rate continued to decline, in November 1984 was only 7.4%. Year and a half ago, the National Bureau of Economic Research (NBER) assert the Great Depression has ended, but the unemployment rate fell by only 0.5% and well below the rate of employment growth during the recession the cumulative decline in employment.

The plight of jobless recovery, is not the only reason for concern, as some European countries are much better than the United States. British banks in deep trouble, the economic downturn has also been hit. Britain and the U.S. economy in many ways similar. During the recession, although the decline in GDP, the UK is much greater than the United States, but the unemployment rate has not risen as rapidly as the United States, is still less than 8%. Germany's unemployment rate is currently around 7%, and during the recovery period, the unemployment rate decreased rapidly.

If a mechanical way to discuss the current unemployment rate in the United States, need to see the indicators, including output growth, productivity gains and capital appreciation. If there GDP growth, employment and capital growth less productivity improvements with it. Over the past two years, the U.S. GDP growth rate of only 2%, performance was flat, but pretty good productivity improvements, the third quarter of 2010 reached 2.3%. This makes room for employment growth is very limited.

Some analysts grasp the input / output and productivity of pure quantitative relationship that the continuous improvement of productivity, so even with the large end of the recession, employment, recovery is still very slow. But trying to blame weak employment recovery increased productivity is wrong, because as long as output growth quickly enough, even in the case of rapid productivity growth, employment also increased rapidly.

If you work a fixed number of economies, then the increase in productivity is likely to eliminate some jobs - the computer appears to eliminate a lot of clerical work - and even fewer job opportunities left. Some industry-specific technological progress, and sometimes eliminate some jobs, but they tend to create more new jobs, as a lot of work is now dependent on computers and the Internet.

The main reason for slow employment growth in the United States, not increased productivity, but many companies do not want a massive increase in employees, because they do not know one or two years, demand, profit and cost what happens. Although the bank is sitting on more than one trillion U.S. dollars in excess reserves, but they are reluctant to lend to new companies with loan demand and small companies, are unwilling to lend to consumers because the banks do not know that they will not repay on time .

Severe economic recession, causing borrowers and lenders are faced with uncertainty. However, out of concern for government departments, the extent of this uncertainty has been exaggerated. Many businesses have been concerned about: the new health care bill would increase the cost of labor employment; the Government will increase taxes and strengthen the commercial operations, high-income and investment control; financial reform bill will increase over the activities of banking and other business costs; government scale; massive deficits over the past few years, forcing future tax increases, leading to shrinkage of the private sector, economic efficiency.

Many people believe that the U.S. economic ills refractory. But the U.S. economic recovery requires bitter medicine, including reform of spending and taxes. Recently, the United States, "fiscal responsibility and reform of the National Committee" released a report, supported by most people. The views and my recommendations in the report is somewhat similar. Unless the United States to take serious action to promote long-term economic growth, or the next decade may be difficult.



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