Is High Unemployment Permanent?
The nation is currently experiencing a higher than normal rate of unemployment. It seems to be continuing longer than expected. In the past, the economic downturns have produced higher than normal unemployment which lasted for a period of time and disappeared. This time it seems longer and worse than in the past.
That raises the question: Is this a temporary period of adjustment or a permanent change in the structure of labor in our economy?
The role of technology in unemployment
Based upon what I have been reading and thinking about this subject I am afraid that this may be a permanent change in the structure of labor in our economy. Computers have been with us for awhile now and we have experienced increased efficiencies.
Initially, computer efficiency didn’t translate into reduced demand for labor because the computers were doing additional work at faster speeds than before. Therefore the same labor was needed but the resulting product was better and produced more quickly.
However, over time, computers and robots have replaced people in offices and manufacturing plants. These are jobs that are being permanently eliminated. If you have been replaced by a computer or robot, there is no going to another company to get the same job because that company will have a computer or robot doing your job also.
Change may be required…
The only way to get another job is to change fields which may require developing new skills or learning new material.
Unfortunately, I am of the opinion that the old standard for an unemployment rate will have to be revised to a higher number as a result of these changes in our economy. This will create new problems which we as a society will have to face.
Bruce is a motivational speaker and conducts seminars and workshops
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**originally published 7/6/12