The last three recessions have all had mediocre recoveries of both output and employment. In this noteworthy clip, UCLA's Ed Leamer explains that changes in the manufacturing sector have changed the pattern of layoffs, recalls and hiring during recessions and recoveries. His point is that fiscal and monetary policy will not solve this problem as technological change has meant it is all output gains (productivity) with no input gains (hours worked or wages earned). Any task that is mundane, codifiable, or quantifiable, will be replaced by faraway foreigners, robots, or microprocessors with the implication that we need a workforce suited to the reality of the 21st century - an educational system that doesn't produce the human-equivalent of robots but creative problem-solving analytical thinkers. He concludes, "for those who do not directly compete with microprocessors, the standard of living has improved; for those relatively-unskilled, they're terribly struggling, with very few prospects." It's a sad situation.
Direct links:
1) Why the last three recessions all look different (1:44 [6])
2) Employment growth for last eight recessions (4:12 [6])
3) Why have the last three recessions been so different? (6:13 [6])
4) The jobs cycle in manufacturing (8:52 [6])
5) Excess capacity in construction has created a lag (10:33 [6])
6) Manufacturing output versus manufacturing employment (11:14 [6])
7) What's the solution to the downturn? (12:20 [6])
LINKS TO DATA REFERENCED --
1. Real GDP Growth From Peak to Peak Charts:
FRED -- "Real Gross Domestic Product, 3 Decimal (http://research.stlouisfed.org/fred2/... [7]). Note: Calculated using (X1-X0)/(X0), where X0 -- recession peak quarter
2. Manufacturing Employment Chart:
FRED -- "All Employees: Manufacturing"(http://research.stlouisfed.org/fred2/... [8])