The End?

Everyone is waiting for the recession to end. Waiting for things to get back to what is now generally considered "normal". I dont think that is going to happen.

They're closing down the textile mill across the railroad tracksForeman says
these jobs are going boys and they ain't coming back to your hometown.
My Hometown - Bruce Springsteen

Before you start waving your fist at your computer screen lets look at history

Prior to the 1990s, jobs rebounded pretty quickly once a recession ended. From July 1981 to November 1982 payrolls fell by nearly three million But by the start of 1983, the economy was creating jobs again, and by the end of 1983, the U.S. job count had not only reached its previous level it exceeded its old peak.

Enter the information age

Since the early 1990s though, jobs have been slower to recover from recession. For instance after the 2001 downturn ended, job losses continued for nearly two years. It wasn't until 2005 that the job count returned to its pre recession high.

Most economist credit this to productivity enhancing technology as well competition from low wage countries that made more of these job losses permanent.

The long and short of it is, to rebound we cant just try to fill the old jobs. Those jobs or a great portion of them are gone. What has to happen is we have to create new jobs and wait for workers to acquire the skills needed to do them.

Lets look at job losses during this recesion using dept of labor statitics:

1. Manufacturing - One in three jobs, have been lost in the manufacturing sector since 1997. The upsurge in construction jobs accompanying the housing boom provided these workers in manufacturing with an opportunity to work and earn a decent living.

2. Construction - the construction sector has accounted for more than a fifth of the jobs lost since the recession began

I think its safe to say the housing boom days are over for a long time. Those jobs, or a great deal of them are gone for good. Those workers displaced until they aquire a new marketable skill.

3. Office and administrative - Fallen 10.1% since the recession began

The recession provided companies with an opportunity to cut jobs no longer as critical as they once were. That may be particularly true of jobs such as secretaries and back room clerks that advances in information technology have made less necessary.

4. The rest - with the advent of Google and digital photography, mp3 recordings, and the like we will see still more service type jobs disapear. The photo lab, record store and even video rental store will soon become a thing of the past.

Technology Takes a Toll

In generations before, new technology also ushered in new uses that benifited society as a whole. When chairs became mass manufactured for instance it did put the local wood smith out of work, however it also produced a product that people could all afford and created a higher demand and thus more jobs. More people buying cheap chairs, more people building cheep chairs.

Todays technology however produces no such benifit. software is software. There is a finit number of folks it takes to create a program and once that program is made regardless of how may people purchase it no firther jobs will be created.

What is the answear?

I honostly dont know. But I have a feeling we better figure out something, and fast. Unemployment is still in the double digits. The gap between the "haves" and the "have nots" is widening again and the "have a littles" are getting squeezed out.

I do know this though, something needs to be done and soon. Welfare and spending OPM (Other peoples money) is no solution.