Yes I do, and I suggest a way of thinking about why it might be so: Cycles of employment increases and decreases take place around a trend line. If the trend is up, as it was until 2000, the slope of the decline will be shallow and the slope of the recovery steep. If the trend is down, as it has been since 2000, the opposite happens–declines are steep and recoveries have vary shallow slopes. If you can’t visualize this, draw a sine wave of several cycles on a piece of paper and then tip the axis first up and then down.
Until 2000, the employment-population ratio of females was rising and rising faster than the decline of males and combined had reached an all-time high. Since 2000, both have been declining. Of course, empop can’t approach 100% and soon we’ll have boomers retiring, which will reduce the practical maximum. Also, we’ve had the offshoring of jobs problem. There may be additional reasons why the trend is downward, but the point is that the trend of slower recoveries is what we should expect to see as empop trends downward.
Another thing to consider as the legacy of Reaganomics is that the new jobs are at much lower wage scales than the lot jobs. Even a full recovery, as measured by employment, we will still have a large aggregate demand shortfall, based on ability to pay.
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3 responses to “The Legacy of Reaganomics in Two Graphs”
Yes I do, and I suggest a way of thinking about why it might be so: Cycles of employment increases and decreases take place around a trend line. If the trend is up, as it was until 2000, the slope of the decline will be shallow and the slope of the recovery steep. If the trend is down, as it has been since 2000, the opposite happens–declines are steep and recoveries have vary shallow slopes. If you can’t visualize this, draw a sine wave of several cycles on a piece of paper and then tip the axis first up and then down.
Until 2000, the employment-population ratio of females was rising and rising faster than the decline of males and combined had reached an all-time high. Since 2000, both have been declining. Of course, empop can’t approach 100% and soon we’ll have boomers retiring, which will reduce the practical maximum. Also, we’ve had the offshoring of jobs problem. There may be additional reasons why the trend is downward, but the point is that the trend of slower recoveries is what we should expect to see as empop trends downward.
A graph of empop with the trend line added is here: http://www.realitybase.org/journal/2010/12/6/us-job-creation-has-been-declining-since-april-2000-and-is-n.html
Another thing to consider as the legacy of Reaganomics is that the new jobs are at much lower wage scales than the lot jobs. Even a full recovery, as measured by employment, we will still have a large aggregate demand shortfall, based on ability to pay.
Karl Smith has a somewhat relevant post.
http://modeledbehavior.com/2011/11/17/poor-consumer-spending-is-indeed-the-proximate-cause-of-much-of-the-recession/
Cheers!
JzB
@jazzbumpa
What I sed over there:
“at certain times, **for reasons we don’t completely understand**, people suddenly start buying fewer thingsâ€
Debt deflation.
Fisher. Minsky. Keen.
Run don’t walk to read chapters 13 and 14 of keen’s new edition.