Stacey L. Schreft, Aarti Singh and Ashley Hodgson’s article, “Jobless Recoveries and the Wait-and-See Hypothesis,” discusses the recovery following the 2001 recession and compares it with the 1991 recovery, labeling them both as jobless and considering how hiring practices – such as wait-and-see and just-in-time (JIT) employment policies – could have influenced the sluggish employment rebounds. Through their analysis, the authors conclude that the wait-and-see hypothesis both accounts for the delayed employment growth and explains JIT practices.
In the first formal section, the authors work to prove that the recovery in question (the 2001 recovery) was jobless. This is done by clearly defining their methodology as declaring jobless recoveries
The authors note that both permanent and temporary employment increased during recoveries typical of the 1960-89 range, while temporary employment seemed to rise instead of permanent employment (as it declined) during the jobless recoveries of 1991 and 2001. A similar trend was observed with part-time employment. Schreft, Singh and Hodgson end this section by citing anecdotal evidence that workers often worked overtime during the jobless recoveries, further contributing to the lack of employment gains. A possibility to account for some of this increased production (in the form of GDP) without increase in employment could be due to the concept of an efficiency wage (Yellen, 1984), albeit with an additional wrinkle. As the economy began to descend further into recession, sources of employment became less stable, and sentiment amongst workers reflected this (Fisher and Koenig, 2014). Thus, it stands to reason that a wage at which workers would be most efficient would decrease, as they would feel the pressure of potentially being fired and would feel incentivized to maximize labor efficiency at a lower wage rate. Rather than the conventional way of thinking about efficiency wage (where employers adjust wages to meet the efficiency wage of employees), a form of efficiency wage where employees adjusted their own efficiency wages to match or approach their actual wages could have accounted for some of the increased production without increased employment – although this is not discussed by Schreft, Singh and
Whiteside, Noel and James Gillespie. "Deconstructing Unemployment: Developments in Britain in the Interwar Years," The Economic History Review, Vol. 44, No. 4. (Nov., 1991), pp. 665-682.
... ie, imperfectly competitive labour-market conditions in which there is but a single buyer of low-wage labour (or a colluding band of buyers) that is able to set wages at a level workers have little choice but to accept. Good old Econ 101 shows that under such conditions, a bump in the minimum wage, within a certain range, can boost employment and enhance efficiency.” (W, W. 1)
It gives them a sense that they are being fairly compensated for their hard work. How can one expect another to be passionate about their occupation if they feel cheated or better yet be passionate about an economy that makes less of them? High salaries attract and motivate workers; enthusiastic and productive workers attract business; an increase in business leads to an increase in money for the economy. Therefore, by raising the minimum wage, a mutual satisfaction can be attained for both, workers and businesses. McClelland appealed to emotion and credibility more effectively than King by uniting his life experience into his text, using it to influence, and also providing full references of other’s experiences. This came to become a major convincing factor. This comes to say, although King’s argument was strong with the potential to be equally arguable, McClelland’s defense presented to be more
Every few years, countries experience an economic decline which is commonly referred to as a recession. In recent years the U.S. has been faced with overcoming the most devastating global economic hardships since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 p.G-30). This paper will cover the issues which led to the recession, discuss the strategies taken by the Government and Federal Reserve to alleviate the crisis, and look at the future outlook of the U.S. economy. By examining the nation’s economic struggles during this time period (2007-2009), it will conclude that the current macroeconomic situation deals with unemployment, which is a direct result of the recession.
Levine, Linda. “The Labor Market During the Great Depression and the Current Recession”. 19 June 2009. 6 March 2010. < http://assets.opencrs.com/rpts/R40655_20090619.pdf>.
Changes in unemployment in Australia is a key issue in this news article. In the last twelve months, unemployment in Australia has dropped from 5.6 per cent to 5.1 per cent which is described as ‘a puzzle’ in the news article. Looking closer, there are some possible explanations for this change in statistics. Previously, unemployment in Australia increased in the time of the recent global economic downturn, although didn’t suffer as poorly as other countries according to data from the Organisation for Economic Co-Operation and Development. However, while unemployment rose, so too did the number of people in other forms of underemployment such as part-time and casual work (OECD, 2010). According to Sappey et. al., the status of employment requires workers to only work one hour per week and so therefore many underemployed workers receive the same employed status in this data as full-time workers (Sappey et. al., 2010, p. 111). According to the OECD, under-employment increased significantly during the downturn, rather than unemployment. Unemployment has dropped in the last twelve months but that does not mean that those who have obtained work have gained full-time employment. In fact, according to the Australia labour market trends of the last twelve months, it is more than likely that those who have become an ‘employed’ statistic rather than ‘unemployed’ have not gained full-time work. This news article quotes figures fro...
On October 24, 1929, a day historically known as “Black Thursday”, the United States stock market crashed due to investors in the market starting to “sell off their shares, which resulted in a decline in stock prices.” (Dau-Schmidt, pg 60) This economic downturn in the market gave birth to financial ambivalence in the country, increasing unemployment, as well as other consequences on the landscape of international economics. When President Franklin D. Roosevelt took over as president in the year of 1933, “The country was in its depth of the Great Depression.” (Neal, 2010) Roosevelt’s New Deal consisted of implementing relief programs such as the Work Progress Administration and the Civil Works Administration, which aimed at revitalizing the U.S. labor market. However, these programs were short-lived due to insufficient funding. Although these programs were effective, their short life span only sought temporary remedy. The on again off again pattern of these programs existence caused a cyclical trend in the increase and decrease of unemployment. “John M. Keynes born on June 5, 1883 was one of the most influential economists of the Twentieth Century.” (Pettinger, pg 1) Keynes argued that the doctrine of the New Deal was a slow remedial procedure to restoring the economy. Although, Roosevelt’s efforts helped reduce unemployment in spurts, it was ultimately an ineffective plan because according to Keynes, to restore the economy during the Great Depression, there had to of been deep government spending and increased high taxes.
Minimum wage, which is the lowest compensation that is given to workers by the employers, hourly, daily or monthly, is a very commonly used labour policy tool, and is diversified across provinces and territories in Canada. However, people’s opinions towards the effect of minimum wage differ. Those who are in favor of the implementation of the minimum wage regulations argue that it increases the standard of living of workers, reduces poverty and inequality, increase morale and in turn the efficiency of businesses. Whole those who disagree view minimum wage laws as an inefficient tool of reducing poverty. Moreover, they claim that it increases unemployment. Economists are in less favor of minimum wage than the general public is. The argument that is widely recognized by economists was the one provided by George Stigler in 1949, who argued that the minimum wage was ineffective at reducing poverty. Based on his theory, employment may fall more in proportion to the wage increase, thus de...
In many nations, the relationship between labor and production has often been a tense one. On one side of the equation, businesses have insisted on greater productivity at lower costs. On the other side, labor (most often in the form of labor unions) has insisted that increased productivity can be best be achieved if the workers have a reasonable “living” wage and job security (Howard 2002).
Most proposed remedies have emphasized the quality of the labor supply. But improving education and training, while often worthwhile and necessary, is not by itself sufficient to raise earnings. If this downward trend, which has persisted through recession and recovery alike, is to be reversed, then policymakers and educators must address the demand side as well as the supply side. Raising young adult wages will require not only better academic performance, training, apprenticeships, and school-to-work programs, but also full-employment policies, changes in the configuration of jobs and careers, and larger young adult union membership. Prior to 1973, the annual and weekly earnings of both young adults and older workers had been improving markedly. Between 1967 (the year the Bureau of Labor Statistics began tracking weekly earnings of wage and salary workers) and 1973, the real median weekly earnings of 16- to 24-year-olds rose by approx i mately 8 percent. Since 1973, however, the earnings of young adults have fallen almost continuously. Between 1973 and 1979, the weekly earnings of young men working full time fell by 7 percent. Young men experienced a 19 percent decline in earnings (a real value of $72 per week) between 1979 and 1989. This decline cannot be attributed solely to business cycle contractions. About half of the 19 percent decline did take place during the recessionary period of 1979-1982. But between 1982 and 1989, a period of strong overall job growth, the weekly earnings of young men fell by another $33, or 9 percent. Earnings declined still more between 1989 and 1994, dropping yet another 9 percent. The result of all this decline? A young man under 25 years of age employed full time in 1994 earned 31 percent less per week than what his same-aged counterpart earned in 1973.
Mandel, Susan. "Hard Times." Nine recessions that give these times a little perspective, April 2010, p 63.
Many people are under the impression that a higher wage would have a positive impact on the economy and the lives of others. However, it will have a reverse effect instead. Increasing
Mouhammed, A. H. (2011). Important theories of unemployment and public policies. Journal of Applied Business and Economics, 12(5), 100-110.
That said, the advantages of technological change outweigh the associated training costs. Consequently, governments and economists support technological change despite the risks of structural unemployment. How does an economy recover from structural unemployment and what government actions can help facilitate this recovery? Despite the support of government and economists on technological change, the resulting structural unemployment can never be left un-checked. In fact, measures should be put in place to facilitate recovery of this type of unemployment.
In December 2007, the United States of America experienced a very scarce yet appealing setback. In fact, because of this specific dilemma between 200,000 and 500,000 were left unemployed and without a stable home. The national Bureau of the Economic research defined this nationwide downfall as “The great recession”. According to the U.S Bureau of labor statistics the unemployment rate has not made a drastic improvement since the start of the great recession. Unemployment has become that is still rising today with a slow rate of change. Unemployment is usually expressed as a number or as a percentage of a larger number. Although it has been ambiguous who has to be included in the percentage, there are members of society without a job, for whom it is certain that should not be added. Officially the unemployed are the people who are registered with the government as willing to work and able to work at a going wage rate but can’t find suitable employment despite an active search for work. In the article “why long-time employment can’t get back on track”, the author begins speaking on a ...