'Real Swedish
jobless rate 15%'
By David Ibison in Stockholm
Financial Times
June 15 2006
[The article above may have to be reevaluated if this article is to be believed!
Apparently the Swedish unemployment rate is not as low as the official
statistics show: "McKinsey reached its conclusions by including those who
want to work and those who could do so, meaning people on government programmes
as well as those on prolonged sick leave."]
Rising disability rates test policymakers
By Ralph Atkins in Paris
The Financial Times
June 14 2006
[It is sometimes thought that the unemployed are simply lazy people who are
hooked on unemployment benefits and that governments could easily reduce
unemployment by cutting those benefits and forcing the unemployed into work.
This policy may work if jobs are really available. Otherwise, the jobless, when
pushed, become desperate and begin pretending that they are sick or disabled.
This article discusses a rise in disability and sickness levels in Europe when
governments adopted tough policies to reduce unemployment.]
Retraining Laid-Off Workers, but for What?
By LOUIS UCHITELLE
The New York Times,
March 26, 2006
[Retraining of the unemployed may well in Denmark--see next article--but the US
may be a different story.]
Soft Landing: For the Danish, A Job Loss Can Be Learning Experience
By MARCUS
WALKER
The Wall Street Journal
March 21, 2006
[Denmark has achieved very low
unemployment rates by an unorthodox mix of policies. Danish businesses can
freely hire and fire workers. Knowing that they can easily get rid of unsuitable
workers, businesses are willing to give every applicant a chance. This keeps
unemployment low. Denmark also has relatively low unemployment benefits to give
unemployed workers an incentive to keep looking for jobs. This too keeps
unemployment low. Moreover, Denmark spends a lot of money on the retraining of
laid-off workers. This drives the unemployment rate even lower. But retraining
costs money. So, taxes are high in Denmark.]
Where to Be Jobless in Europe
By MARK LANDLER
The New York Times,
October 9, 2005
[You wont believe how generous unemployment insurance is in Europe until you
read this.]
The New Profile of the Long-Term Unemployed
By LOUIS UCHITELLE
The New York Times,
May 24, 2005
[It's not enough to just count the unemployed, we need to look at
how many have been unemployed for a long time. The longer one spends in unemployment, the
harder it is to get out of unemployment. When the economy goes through rapid
structural change--with old industries being rapidly replaced by new
industries--and when many workers are older workers who cannot easily be
retrained for new types of work, long-term unemployment starts rising. Moreover,
businesses are often unwilling to hire older laid-off workers even if they are
able to do the work.]
Workers or shirkers
The Economist
Jan 27th 2005
[Why, at a time of very low
unemployment, is America's labor-force participation rate rising,
especially for young and middle-aged workers? Maybe these two things are linked:
maybe workers are quitting the labor force out of frustration at not being able
to find jobs and because they are no longer looking for jobs they are not being
counted as unemployed. So, we mustn't look only at the unemployment rate. We
need to look at the participation rate also. A fall in the unemployment rate is
really good news if the labor-force participation rate is not falling at the
same time. On the other hand, if both rates are falling, you can't be sure that
the news is good.]
Germany Under a Microscope: Its Labor-Market
Experiment Will Offer Lessons for Rest of Europe
By G. THOMAS SIMS
THE WALL STREET JOURNAL
December 31, 2004
[Germany tries to get tough on the chronically unemployed.]
Where Do the Jobs Come From?
By EDMUND L. ANDREWS
The New York Times,
September 21, 2004
[Do small businesses create more jobs than big businesses? Should the government
give tax breaks to small businesses in the hope of creating more jobs? It turns
out that the share of all US jobs that are in small businesses has remained
constant for a long time. Moreover, those jobs tend not to pay well or give good
benefits.]
THE DATA: A Job Picture Painted With Different
Brushes
The New York Times,
August 7, 2004
[Published on the same day as the next
article bemoaning the paucity of new jobs, this article shows that the jobs data
can be confusing and need to be looked at very carefully, especially when jobs
data become part of political controversy.]
In Blow to Bush, Only 32,000 Jobs Created in July
By DAVID LEONHARDT
The New York Times,
August 7, 2004
[Why so few new jobs? This article discusses almost all the main reasons: rapid
technological growth enabled businesses to get the same work done with fewer
workers; some companies moved their operations overseas where labor is cheaper;
rising energy costs made production less profitable, thereby reducing new
hiring; people had already spent the tax cuts they had received and, therefore,
were now spending less; and interest rates had risen, making it difficult for
people to borrow money for spending purposes.]
More Jobs, Worse Work
By Stephen S. Roach
The New York Times,
July 22, 2004
[A fall in the unemployment rate need not be something to celebrate if the newly
created jobs are worse--that is, less well paid--that the old jobs that
disappeared. We need to pay attention to both the quantity and the quality of
the new jobs that are created in a recovering economy.]
Lingering Job Insecurity of Silicon Valley
The New York Times,
March 7, 2004
[In 2004, the unemployment rate for
computer professionals--traditionally a low-unemployment group--went up to
unusually high levels. Why? Outsourcing of computer work to low-wage countries?
No. "The impact of outsourcing is overblown," according to Professor Erik
Brynjolfsson of MIT. "The far larger factor is substituting technology for
labor." In other words, innovative computer software was used to increase the
productivity of computer professionals, and when workers become more productive,
businesses need fewer of them, at least in the short run.]
RETRAINING FOR WHAT? If You're a Waiter, the
Future Is Rosy
By STEVEN GREENHOUSE
The New York Times,
March 7, 2004
[This article--though full of exaggerated fears--highlights the possibility that
globalization may make it hard for some laid off workers to find jobs by
retraining themselves for new careers.]
The reserve army
The Economist
Feb 12th 2004
[The unemployment rate is, in fact, a
poor measure of economic health. Even the simple matter of counting the employed
is not simple. But, when all is said and done, there remains a big gap between
the US and Europe: in the US, 70% of all working-age people are employed,
whereas, in Europe, only 60% are.]
Lending a Lasting Hand
By DAVID GLENN
Chronicle of Higher Education
January 16, 2004
[One way to help the unemployed without making them lazy is for the government
to give everybody a guaranteed basic income! There are other things the
government could do to directly reduce unemployment like creating government
jobs when private-sector jobs are scarce or giving businesses a subsidy for
hiring low-skilled employees who would otherwise not be hired.]
The Unemployment Myth
The New York Times,
November 30, 2003
[The US Social Security system provides
assistance to qualifying disabled workers. In the late 1980's and early 1990's
the US Congress made it easier for workers to get disability benefits.
Subsequently many workers who were laid off claimed and received disability
benefits for hard-to-verify ailments such as back pain and mental disorders,
indicating that there was a whole lotta faking goin' on. These workers were
classified as disabled, not unemployed. It follows, that one needs to be careful
when one interprets unemployment data.]
The Great Job Machine
The New York Times,
November 7, 2003
[The US labor market is marked by a lot
of continuous turmoil: lots of workers lose their jobs and lots of new jobs are
also created, all the time. This turmoil, which leads to what is called
structural unemployment, is the unavoidable side-effect of rapid technological
change; only an economy that does not innovate can be expected to have no job
losses whatsoever.]
Payroll Slump Has Economists Rethinking Ideas on Job Creation
By JON E. HILSENRATH
THE WALL STREET JOURNAL
September 8, 2003
[When an economy emerges from a
recession, production starts growing rapidly but without rapid growth in jobs;
job growth comes later. Rapid growth in productivity makes it possible for
production to grow rapidly without rapid growth in jobs.]
Productivity Gains: Never Bad, Even for American Workers
By DAVID WESSEL
THE WALL STREET JOURNAL
August 21, 2003
[When workers become more productive, fewer workers may be
needed in the short run and unemployment may rise. But in the long run,
increases in productivity are good for workers in every way: unemployment rates
are unaffected and wages rise in step with productivity.]
Jobs for economists: Unemployment forecast
Aug 7th 2003
The Economist
[Even people with PhDs in economics may have trouble finding jobs sometimes.]
Jobless Workers Switch Fields In a Scramble to Find Relief
By JON E. HILSENRATH
THE WALL STREET JOURNAL
June 24, 2003 12:44 a.m. EDT
["Stung by layoffs at nearby furniture,
apparel and appliance factories, workers are flooding Randolph Community College with
applications to enroll in nursing and teaching programs." This is an
instance of structural unemployment. When wages in an industry exceed the
equilibrium wage--at which the number of job-seekers (supply of labor) equals
the number of job vacancies (demand for labor)--there are more job-seekers than
job vacancies: hence the layoffs mentioned. In such a situation, workers may have to retrain themselves for
another line of work. And until they find new jobs, they are classified as
structurally unemployed.]
Blacks Lose Better Jobs Faster as Middle-Class Work Drops
By LOUIS UCHITELLE
The New York Times,
June 12, 2003
[When the US job market turns sour,
blacks tend to get hit harder than whites.]
How to Give Job Seekers a Tastier Carrot
By DAVID LEONHARDT
The New York Times,
June 8, 2003
[A smart way to provide unemployment insurance is to give the unemployed the
same amount of money no matter how long they stay unemployed.]
Unemployment Rate Rises to a 9-Year High
By DAVID LEONHARDT
The New York Times,
June 7, 2003
Jobless and Hopeless, Many Quit the Labor Force
By MONICA DAVEY with DAVID LEONHARDT
The New York Times,
April 27, 2003
[In bad times, the unemployed may give up looking for work and become
"discouraged workers". When this happens, a decline in the official unemployment
rate may not represent good news, as Prof. Robert Topel explains in the
article.]
Workers Who Feel Discarded
By BOB HERBERT
The New York Times,
April 7, 2003
[The pain of unemployment affects society in ways that go beyond economics.]
Jobless Rate Rose to 6% in November; 8-Year High
The New York Times,
December 7, 2002
[Tough times.]
Weak Growth Means Few Jobs, and Pain Is Felt Far
and Wide
The New York Times,
October 13, 2002
Out of a Job and No Longer Looking
The New York Times,
September 29, 2002
[This is yet another article that points
out that the official US unemployment rate makes things look rosier than what
they actually are. "Millions of people, particularly men, have dropped out of
the labor force," and are therefore not counted as unemployed, not because they
are retired but simply because they've had no luck finding a job. "Since 1990,
the number of people receiving disability pay has nearly doubled" as has the
number of people in jail. It seems likely that these people are in disability or
in jails simply because they couldn't find jobs. And, yet, they are not
officially counted as unemployed.]
For Germans, a Recession Is a Pretty Smooth Ride
By MARK LANDLER
The New York Times,
September 29, 2002
[Germany, like most European countries, provides very generous help for
unemployed people. As a result, there is very little discontent even when
unemployment rates reach 20% in some areas. Moreover, the generosity of the
German government acts as an "automatic stabilizer": people are able to spend
money even when they are unemployed and this keeps the economy chugging even
when unemployment is high.]
Long-Term Joblessness Rose by 50%Over the Last Year
The New York Times,
September 9, 2002
[It's not enough to just count the unemployed, we need to look at how long has
it been since they lost their jobs. The longer one spends in unemployment, the
harder it is to get out of unemployment.]
The jobs market: The young and the rested
The Economist
Aug 22, 2002
[One part of the
American workforce is hurting badly—teenagers. Teen unemployment has always been
relatively high in the US, but in 2002 it was unusually high. Why? Adults, who
were facing tough times in the job market, and immigrants were muscling in on
service jobs traditionally done by teens. Normally, this influx of workers would
lead to a decline in wages that would enable businesses to hire both teens and
adults. But minimum wage laws mean that wages cannot fall. So, businesses take
the adults and get rid of the teens!]
Italy's Extreme Labor Restrictions
The New York Times,
June 27, 2002
[Italy's labor laws make it extremely
difficult for businesses to fire a worker. This may sound nice, until you see
the (predictable) consequences: high worker absenteeism, low job creation, high
rates of young people living with their parents, etc. Moreover, once such cozy
labor laws are in place they are hard to repeal or even modify. Those who
currently have jobs-- the "insiders"--benefit at the expense of those who
don't--the "outsiders".]
Even as Recovery Builds, Less Educated Fare Worse
By ALAN B. KRUEGER
The New York Times,
March 7, 2002
[When a recession hits, the first
workers to be let go are the less educated: employers tend to "hoard" their
better-educated workers. When a recession ends the first workers among the
unemployed to be hired are the better-educated ones; only when the recovery
becomes especially strong and seemingly permanent do firms hire the
less-educated workers. In short, the less-educated are the first to be fired in
tough times and the last to be hired in good times.]
Many Ride Out the Recession in a Graduate School
Harbor
By YILU ZHAO
The New York Times,
January 24, 2002
[The education business is "countercyclical": it does well when the economy is
doing badly! This indicates one of the few good things that can be said about a
recession: were it not for the recession, workers would not have gone back to
school, their skills would not have increased, and the economy would not have
gotten more productive.]
An Economic Recovery Will Tell in the Classroom
By RICHARD ROTHSTEIN
The New York Times,
December 12, 2001
[The pain of unemployment affects society in ways that go beyond economics.
Kids' grades suffer when their parents lose their jobs.]
Unemployment Insurance Needs Overhaul
By ALAN B. KRUEGER
The New York Times,
October 18, 2001
[This is a valuable discussion of the pros and cons of the US unemployment
insurance system and of the ways in which it could be improved.]
Out of Work, and Out of the Benefits Loop
By DAVID LEONHARDT
The New York Times,
October 17, 2001
[The US unemployment insurance system is
among the least generous in the developed world. Unemployed workers face
numerous restrictions and only about 39% of them qualify for unemployment
benefits. And those who qualify get, on average, $230 a week for 26 weeks.]
Europe's scrap-heap
Aug 16th 2001
The Economist
[Two puzzles about European unemployment: why, on average, is it so
uncomfortably high, and why have individual economies' rates diverged?]
Heart Disease Is Often More Deadly Paired With
Job Trouble, Study Says
Associated Press
THE WALL STREET JOURNAL
June 21, 2001
[Men who live in regions with high unemployment and low-paying jobs are more
likely to die from heart disease than those in other parts of the country.]
Japan Suicide Rate Surges in 1998
By The Associated Press
The New York Times
July 2, 1999
[The pain of unemployment affects society in ways that go beyond economics:
suicide rates can rise.]
Korean Money Woes Break Up Families
By The Associated Press
The New York Times
January 9, 1999
[The pain of unemployment affects society in ways that go beyond economics:
marriages fall apart, children are abandoned in orphanages.]
Legacy of the '90s Boom: More Jobs for Black Men
By SYLVIA NASAR
The New York Times
December 13, 1998
[The ups and downs of the economy affects different demographic groups in
different ways. The '90s jobs boom was unusual in that it actually helped black
men.]
Jump in November Sent Work Force to a Record High
By SYLVIA NASAR
The New York Times
December 5, 1998
[This article highlights the tremendous amount of "creative destruction" that
goes on in the US economy: lots of jobs lost, lots of new jobs created, all the
time.]
Jobless Rate Falls to 4.3 Percent, Lowest in Decades
By SYLVIA NASAR
The New York Times
May 9, 1998
[The good times!]
In Germany, the Economy Grows While Jobs Stagnate
By EDMUND L. ANDREWS
The New York Times
March 21, 1998
[Production is growing rapidly in
Germany, but not jobs. How is this possible? "High labor costs -- fringe
benefits, plentiful holidays, rigid work rules -- and high payroll taxes
discourage companies from adding permanent workers." The fringe benefits,
holidays, and protective work rules are great for those who already have jobs
(the "insiders") but bad for those who have no jobs (the "outsiders"). The
insiders rig the rules--through their unions that can threaten to go on strike
if their demands are not met--so that they can live it up at the expense of the
outsiders.]
The Fed Should Keep Its Head
By ROBERT EISNER
The New York Times
September 19, 1996
[The central bank of a country can use a
whole range of policies to provide a short-run boost to the economy. This
"monetary stimulus" leads to higher output and lower unemployment--two very,
very nice things. But if the unemployment rate is pushed down even below the
long-run average level--called the natural rate of unemployment or the
non-accelerating inflation rate of unemployment (NAIRU)--the monetary stimulus
might lead to unstoppable inflation, which is not a very nice thing. This fear
tends to make central banks cautious about using monetary stimulus. The author
argues, however, that the NAIRU is not immutable. If we are certain that the
NAIRU is 6%, we should not push unemployment below 6%. But how can we be
certain? Maybe the NAIRU has gone down to 5%, in which case it would be a good
idea to push unemployment down to, say, 5.4%. The point is that central banks
should not be too scared of the NAIRU; they should experiment a bit, keeping in
mind that the NAIRU can change.]
OBSERVER : What A Dunce
By RUSSELL BAKER
The New York Times
August 6, 1996
[A humorist's brilliant take-down of the
NAIRU hypothesis (see above). The central bank uses its policy tools to keep the
unemployment rate above the NAIRU in the belief that there would be rampant
inflation if the unemployment rate is too low. And yet, the government is using
other policies to punish people who are not working in order to compel them to
seek work. So, one branch of the government is pushing people to find jobs while
another branch of the same government is destroying jobs to keep unemployment
from falling!]
Maintained by Udayan Roy for use by students as supplementary material.