The Myth Of Structural Unemployment
Paul Krugman ably tackles the issue:
[W]hat should we be seeing if [structural unemployment existed]? The answer is, there should be significant labor shortages somewhere in America — major industries that are trying to expand but are having trouble hiring, major classes of workers who find their skills in great demand, major parts of the country with low unemployment even as the rest of the nation suffers. None of these things exist.
Let me add a common sense observation - in September 2008, the unemployment rate, after a steady rise, was 6.1%. In August 2009, just a year later, the unemployment rate was 9.8%. To believe that this rise was a result of structural unemployment is to accept that the American economy became completely dislocated in terms of its labor market in just 12 months. The precipitous drop in demand and the financial meltdown were not the cause in the rise in unemployment but merely the result of structural unemployment. This would be an event without precedent in economic history. It simply is false.
Speaking for me only
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