Tuesday, May 08, 2012

The "structural" excuse for ignoring unemployment

One of conservatives' favorite arguments against any government action aimed at boosting employment and stimulating the depressed economy is that the unemployment rate is largely due to "structural" unemployment, a mismatch between available jobs and the skills of the unemployed, which government action allegedly can't effect very much.

Not surprisingly, this is a favorite argument of David "Bobo" Brooks. He was at it again just this past Friday, Shields, Brooks on Bin Laden Politics, Chen Guangcheng, Jobs Report PBS Newshour 05/04/2012:

And so the bad news is that the percentage of Americans employed is at a 30-year low.

But the second thing to be said is that this suggests that it's not just the cyclical stuff. There really are structural problems, a lot of people , for demographic and other reasons, leaving the work force, a lot of unskilled jobs. I talked to somebody in the trucker business this week. Can't find truckers to work. And that's true across a lot of manufacturing.

Can't find people, even $50,000-a-year jobs. Take the skilled blue-collar jobs, there just aren't people with those skills. We have got those structural problems. We have got overhanging uncertainty impinging a lot of aggressive investment. And we have uncertainty about health care. We have got a rotten tax code.

And so to me what frustrates me, we were having big debates over what spending would help short term, but over the last four years, knowing we are in for a long problem, why hasn't there been and why in this campaign isn't there huge debates over tax reform, over entitlement reform, over middle-class stagnation?

In this debate, we have seen it go into student loans and other worthy stuff, but pretty small-bore compared to this size economic problem. ...

But, to be fair, if this were a non-financial crisis recovery and we were in a normal curve, we would be producing 400,000, and growth would be 4 or 5 percent. It would feel much different if this were a non-financial recovery.

But the point is, the productivity of the American economy is doing pretty well. Companies are doing a good job of producing stuff. They are just not using people to do it. And so that is -- that is the structural problem. And so who has an answer for that? Well, I wish I knew. I don't know. But that is a tough one. [my emphasis]
Must be true, because Bobo "talked to somebody in the trucker business" about it. Bobo was just throwing the favorite Republican slogans of the moment on the wall in hopes one or more of them would stick.

His New York Times columnist colleague has been refuting this particular "structural problem" nonsense for a while. Not that Bobo will pay attention as long as that is the Republican party line. But Krugman was still explaining it today, Structural Flashbacks 085/08/2012:

1. That’s what Very Serious People said in the 1930s too. Then the approach of war finally delivered the stimulus we needed, and all those structural difficulties turned out to be imaginary.

2. Ireland was praised for its wonderful flexibility; it was a shining example of the art of the possible, declared George Osborne. Then, when things went wrong, it was told that it must fix /its deep structural rigidities.
And he discusses it further in The Structural Signature 05/08/2012:

So why are these people so sure that it’s structural? I know that it sounds wise and Serious to say that it is, but there is this matter of actual evidence; that evidence is strongly inconsistent with a structural story, and quite consistent with a demand story. That doesn’t settle the case entirely, but in a better world it would go a long way toward resolving the argument.

Too bad we don’t live in that better world.
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