Beneath the Bubble
If you think the recession was the only cause behind high unemployment, think again. It turns out that the housing boom masked a long-term downtrend in manufacturing employment – a former primary employment destination for non-college men – and the housing bust simply unmasked that trend. Recent research demonstrates that 35% of the increase in non-employment (a term that also includes potential workers who have dropped out of the labor force) during the period of 2007 to 2011 is attributed to the long-term decline in manufacturing jobs, and 45% of the increase in non-employment from 2000 to 2011.
Put a different way, and doing some math, roughly 1 to 1.5 percentage points or so of the unemployment rate is explained by this long-term drop in manufacturing employment, with some workers leaving the workforce. (Uncertainty about the federal government's policies also explains a 1- to 2-percentage-point increase in unemployment.)...497 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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