Thread: STATE OF THE UNION: ECONOMY Phantom 15 Million Jobs

STATE OF THE UNION: ECONOMY

The Phantom 15 Million

Taming unemployment starts with solving the mystery of the jobs that were supposed to have been created in the past 10 years but weren’t.

By Jim Tankersley
Friday, January 21, 2011 | 6:15 a.m.

America’s jobs crisis began a decade ago. Long before the housing bubble burst and Wall Street melted down, something in our national job-creation machine went horribly wrong.

The years between the brief 2001 recession and the 2008 financial collapse gave us solid growth in our gross national product, soaring corporate profits, and a low unemployment rate—but job creation lagged stubbornly behind, more so than in any economic expansion since World War II.

The Great Recession wiped out what amounts to every U.S. job created in the 21st century. But even if the recession had never happened, if the economy had simply treaded water, the United States would have entered 2010 with 15 million fewer jobs than economists say it should have.

Somehow, rapid advancements in technology and the opening of new international markets paid dividends for American companies but not for American workers. An economy that long thrived on its dynamism, shedding jobs in outdated and less competitive industries and adding them in innovative new fields, fell stagnant in the swirls of the most globalized decade of commerce in human history.

Even now, no one really knows why.

This we do know: The U.S. economy created fewer and fewer jobs as the 2000s wore on. Turnover in the job market slowed as workers clung to the positions they held. Job destruction spiked in each of the decade’s two recessions. In contrast to the pattern of past recessions, when many employers recalled laid-off workers after growth picked up again, this time very few of those jobs came back.

These are the first clues—incomplete, disconcerting, and largely overlooked—to a critical mystery bedeviling a nation struggling to crawl out of near-double-digit unemployment. We know what should have transpired over the past 10 years: the completion of a circle of losses and gains from globalization. Emerging technology helped firms send jobs abroad or replace workers with machines; it should have also spawned domestic investment in innovative industries, companies, and jobs. That investment never happened—not nearly enough of it, in any case.

If we can’t figure out why, we may be doomed to a future that feels like a long jobless recovery, no matter how fast our economy grows. “It’s the trillion-dollar question,â€

It stops mattering how cheap the shirts are at Walmart once your income goes to zero. And even those of us with fresh graduate degrees and recent "hot" certifications are no better off. The jobs are being created, all right, just not in the US.

[quote="AirborneSapper7"]STATE OF THE UNION: ECONOMY

The Phantom 15 Million

"Here is how the evolving global economy is supposed to work: Mature economies with high living standards, such as the United States, ship some of their lower-skill jobs to developing countries where wages are lower. The costs of the outsourced goods and services go down, and the buying power of the developing countries goes up. American firms reap higher profits, which they invest in developing higher-value products that can’t be made elsewhere and sell them to increasingly flush consumers at home and abroad. Laid-off American workers find jobs in the innovative industries that result.

"That story has almost entirely come true for corporate America, whose record profits spurred strong GDP growth throughout the 2000s, but not for workers. “A lot of people have been displaced due to technology and outsourcing,â€