No evidence of “structural unemployment” in the US (2 graphs)
from David Ruccio
Rand Ghayad and William Dickens (pdf) have discovered a shift in the so-called Beveridge Curve (Figure 1) associated with the growth in long-term unemployment (Figure 2).*
Their study is significant in that they find no evidence of “structural unemployment,” the idea repeated ad nauseam by anti-stimulus economists that there’s a mismatch between job openings and workers’ skills—and therefore the problem of unemployment will be solved when workers decide to acquire the correct set of skills. Instead, they find pattern of increasing vacancies with little or no change in unemployment in the recovery from the most recent recession across all categories (e.g., industry, age, education, and blue- and white-collar groups) except one: short-term unemployment. Thus, “all of the increase in vacancies relative to unemployment has taken place among the long-term unemployed.”
In other words, what Ghayad and Dickens have discovered is a growth in what we might call the Reserve Army of the Long-Term Unemployed. It’s a large group of workers who have been unemployed for 27 weeks or more and who are being sacrificed on the altar of relying on private decisions to create jobs.
Well, private employers have not been creating an adequate number of jobs. Not by a long shot. The result is a large group of formerly employed workers who have no prospect of finding a job anytime in the foreseeable future—and who, at the same time, serve as a reminder to all the other workers who do have jobs that “there but for the grace of Capital go I.”
*The Beveridge curve—the empirical relationship between unemployment and job vacancies—is thought to be an indicator of the efficiency of the functioning of the labor market. The idea is that, when job vacancies rise, unemployment falls, following a curved path that typically remains stable over long periods of time.