Steve examines the ending of the recent recession and how jobs are lagging in recovery. He summarizes Federal Reserve Bank article in Deinonychus antirrhopus: February 2004 Archives” href=”http://www.steveverdon.com/archives/2004_02.html#001123″>Structural Change and the Jobless Recovery. One of the main points of the article is that recessions now have been better managed than in the past. This in turn leads to structural changes now accounting for a larger percentage of unemployment reasons. Fewer jobs are lost, but the ones that are lost are “gone for good”.
Quoting from the original article:
Temporary versus Permanent Layoffs
In a temporary layoff, an employer “suspends†an employee’s job, generally because of slack demand. Both the employer and the employee expect their relationship to resume when economic conditions improve. The employer may even help the employee apply for unemployment insurance benefits so that he or she is more likely to wait out the layoff instead of taking another job. When layoffs are temporary, subsequent recalls can take place quickly, fueling fast payroll growth.By contrast, a permanent layoff severs the relationship between the employer and the employee. The employer eliminates the job for any of a variety of reasons, including a permanent fall in demand, technological change, reorganization of production, and local or international outsourcing. Even an employer that ultimately decides to fill the job again will need to search for a new employee. Meanwhile, the laid-off worker must find a new job and the employer that hires him or her must create a new position and conduct a search to fill it. Thus, when layoffs are permanent, job recovery is slower.
An example could be medical transcriptionists: Transcriptionist in US is laid off during a downturn. When a transcriptionist is re-hired, it could well be with an outsourced firm (that may or may not be offshore). Eventally the need for medical transcriptionists goes away as doctors rely less and less on paper-based systems.
Read the summary and then the original article.
BTW, if you are looking for a job, you would do well to examine a chart showing job-loss and gain during the recent recession.
Some of the interesting numbers behind the chart.
Eighteen industries grew significantly in the 1990s. Of them, seven are now showing signs of structural changes. They are: special trade contractors, air transportation, transportation services, communications, “securities and commodities brokers”, “amusement and recreation services”, and “museums, botanical gardens, and zoos”.