According to the headlines, 10 percent of Americans are unemployed. The truth is that closer to 17 percent of the population cannot find full-time work; this number includes workers who have become discouraged and have given up looking for work as well as those who have settled for part-time jobs because they cannot find the full-time employment that they need.
The situation is not going to change anytime soon. As Princeton economist Paul Krugman recently warned: “We are facing mass unemployment — unemployment that will blight the lives of millions of Americans for years to come.”
“Even if industrial production picks up, unemployment will continue to lag,” observed Goldman Sachs’ Abby Cohen, speaking at Barron’s Roundtable about a week ago. “The problem is far more than cyclical.” (You may remember Cohen as a bull during much of the ‘Nineties boom. By temperament, she is hardly a doomster, but when she looks at today’s economy, she is very concerned.)
Cohen is saying jobs are not going to suddenly appear with the next business cycle. Current levels of unemployment reflect deep structural problems that go back at least two decades.