I was writing in response to what Gene Coyle mentioned: the anemic rate of growth.
I was merely suggesting that if the fall in unemployment has been so modest -- in
terms of rate of change rather than the absolute value -- over such a long
expansion, than a sharp downward turn could create massive unemployment.
In one sense, Doug, I agree with you. I am very surprised that the expansion has
gone on as long as it has. It cries out for an explanation -- and the list has
been addressing that question recently.
I think that it is even more important to understand what is unfolding than what
has happened.
With regards to unemployment, I have mentioned several times over the years, that I
think in terms of an "effective" rate of unemployment, in which I subjectively -- I
would have no idea how to actually measure it -- correct for the quality of jobs.
That is, if a well-paid steel worker has to begin to flip burgers, unemployment is
unchanged, but ....
Doug Henwood wrote:
> Michael Perelman wrote:
>
> >Someone recently posted an article from the Wall Street Journal, I believe, to
> >the effect that if unemployment has declined so little over such a long
> >expansion, it would be sure to skyrocket with an economic slowdown.
>
> I think the argument was about productivity, not unemployment. But
> still - what are you talking about? The U.S. unemployment rate is the
> lowest since January 1970, and the employment/pop ratio just a bit
> off being the highest in history. Here are the two figures, for the
> most recent month and at the employment trough (which came after the
> bizcycle trough):
>
> U EPR
> 6/92 7.7% 61.4%
> 8/00 4.1% 64.3%
>
> The Conference Board's measures of "jobs plentiful/jobs hard to find"
> are close to being their tightest ever. The overall poverty rate has
> taken a sharp drop, and the black poverty rate is the lowest ever.
> Yeah, I can make a list of all the things that are wrong - from
> incarceration madness to an obscene wealth distribution - but this is
> just a bit too gloomy even for me.
>
> Doug
--
Michael Perelman
Economics Department
California State University
[EMAIL PROTECTED]
Chico, CA 95929
530-898-5321
fax 530-898-5901
