America’s job market is barely treading water. The rate of unemployment might have dropped below 9 per cent, but jobless claims have risen in recent months. This Friday’s non-farm payroll figures are expected to show slower growth than in previous months, while the average time a worker stays unemployed is now 39 weeks – the longest on record.
Some commentators – such as Christina Romer, who formerly chaired President Barack Obama’s council of economic advisers, and economist Paul Krugman – maintain that the problem is one of demand. They note unemployment is high across many occupations, and argue for increased investment and aid to local and state governments. Others reply that the problem will fix itself as growth picks up. But a closer look suggests neither analysis is right. Yes, we face a cyclical recession, but there is a structural shift too, which has left many workers high and dry.
This process isn’t new, of course. As the US economy has evolved, its job make-up has shifted too. By the middle of the 19th century some 60 per cent of the US workforce had been absorbed into industrial jobs, but those were often low-wage, long-day, dirty and dangerous. It wasn’t until a mixture of the New Deal, labour unions and postwar prosperity that these blue-collar jobs were transformed from bad to good.