Is high unemployment the new normal?

[dkf]

http://seekingalpha.com/#article/278964-is-high-unemployment-the-new-normal/

Even though the economy has partially recovered, and corporate profits and margins are back to pre-recession highs, job growth has not been able to keep up. In addition, advances in technology and globalization have eliminated the need for employment in both high and low skilled professions. Due to mechanical automation, the advancement of information technology, outsourcing, baby boomers not retiring, and government regulations keeping the cost of employment high, higher unemployment will be the new normal.

Automation and technological advances lower the costs of goods while increasing the standard of living of a population. However, automation creates unemployment. The rate of automation has increased rapidly since the dawn of the internet and employers simply need fewer workers to do the same amount of work. In unskilled fields, examples include self check-out machines in retail, programming macros replacing data entry, robotic harvesters replacing farm workers and gardeners, and many more.

Higher skilled labor is at risk to automation as well. Cloud computing has eliminated the need for many IT jobs that relied on companies previously needing to host their own servers. Basic legal work has commoditized by companies such as Legal Zoom which reduces the demand for lawyers to more complex contracts and criminal courts. Algorithmic trading and discount brokerages have reduced or eliminated the needs of stockbrokers and market makers. Accounting, back office support work, education, and professions that involve transaction coordination are also at risk of automation through software or outsourcing.

Outsourcing has also eliminated the need to keep an in-house workforce for entrepreneurs and large companies. The personal assistant can be replaced by outsourcing to companies such as yourmaninindia.com or getfriday.com, which can run errands for you or solve basic accounting or IT problems. Manufacturing has already been outsourced, but in the long run will be automated altogether with robotics technology.

[AngryAmish]

1. It is

Honesty, I don't know what we are going to do with the left hand side of the bell curve.

[blindpig]

2. Yes.

the 'reserve army of the unemployed' will serve to depress wages nicely.

[valerief]

3. Welcome to the new Gilded Age. nt

[Tippy]

4. Not .....near new normal....I see things improving but slowly...

And have to thank OWS for making people realize we still have choices.

[adigal]

5. I think so...I don't see any solutions, except maybe for farming

More people are going to need to become farmers to keep up with our food needs. But many kids don't want to do that.

[FarCenter]

6. Yes, and with a high rate of turnover in the workforce

Seasonally adjusted intial jobless unemployment claims are running about 400 K / week. However, the long term unemployed is constant to slowly decreasing at around 14 million. Which means that about 400 K / week are finding jobs.

A large part of this is due to rapid changes in business process, partly in manufacturing automation, but even more so in various segments of the service industries.

Another part is due to geographic shifts in activity. Nevada has very high unemployment, while strippers are making $3000/night in the oil drilling areas of North Dakota.

[hfojvt]

7. when I was a college student

they used to teach that the "full employment unemployment rate" was about 5.5%.
see wiki for a definition of that term - http://en.wikipedia.org/wiki/Full_employment

I thought the idea was kinda ridiculous, even more so, considering the US had 3% unemployment rates in the 1950s. I was going to school in the 1980s though when the unemployment rate was peaking at 10% in 1982 and it took a couple of years for the rate to get back to where it was when Reagan's ERTA was passed. But low and behold, in the mid 1990s, the unemployment rate went well below 5.5% and stayed there for a number of years.

But I don't think there is anything inevitable or necessarily permanent about our current unemployment rate. It should be significantly lower now, if only Republicans, with a fair amount of public support, were not so adamant about cutting government spending - and hence government employment and the economic stimulus that comes from that. In a rational world, or one where our governments were representing the bottom 80% instead of the top 20%, we would have lower unemployment than we do now.

However, the government situation seems unlikely to turn around (or change (snicker)) any time soon.

[Javaman]

8. As long as jobs are continually off shored, as long as repukes refuse block any stimulus

as long as politicians pander to the wealthy corporations, yes, it is the new normal.

However, if we the people finally say, "ENOUGH!", which it appears we are, then the new normal will be changed, but until those guilty are held accountable, the new normal will stay the normal for a while.

Will it happen sooner or later? given the stonewall like response from everyone on the right and the weak support in congress on the left, it will be later.

start a garden, grow something on a window ledge, or try and get a community plot going, you will be thankful for it.

now it is the time to put in onions, garlic and lettuce.

[NNN0LHI]

9. This is why a 32-hour workweek for the same pay as 40 hours is essential

If the country switched to this we would immediately need 20% more workers.

There would be a worker shortage right now.

Don

[The2ndWheel]

12. The same pay for less time doing the job, plus more people on the payroll

at the same time that technological advancement is decreasing the need for people to do various jobs.

How does that work? It seems like one of those three things would need to be taken out of the equation for the idea to be successful.

[NNN0LHI]

13. Same way it worked when we switched from a 6-day 48-hour workweek to a 5-day 40-hour workweek

I know this idea sounds radical to a lot of people but believe me, it sounded radical to a lot of people back then too.

Don

[The2ndWheel]

14. Why limit ourselves to a decrease to 32?

Cut even more hours if the pay is the same.

What's the downside though? We have to give to get. We can't just have everything, that's 1% type thinking. What are we giving up for the change?

[Romulox]

10. "Should I buy a Prius?" nt

[TwilightGardener]

11. Productivity and profits are back up, with less employees. Hard to see that as a

positive sign. We need increased demand, because companies obviously aren't going to hire until they absolutely have to. Where is increased demand going to come from?

[applegrove]

15. Downsizing takes place as deregulation does. The mid sized corporations get wiped out or gobbled up.