Click for a larger image.
Thanks to Calculated Risk for this chart. Note the huge divergence between unemployment rates by educational level. Those with less than a high school education saw their unemployment spike from 8% at the beginning of the recesssion to 15% currently. Now look at those with a college degree or higher -- they are still at "technical" full employment -- they have an unemployment rate at about 5%.
In a recent article I wrote on the employment situation I noted the following:
Totaling construction and manufacturing jobs we get ~6 million. In other words, about 73% of the jobs lost during this recession came from two economic sectors -- construction and manufacturing.
This is a blue collar recession in a big way. Most importantly, a lot of these jobs aren't coming back. Manufacturers are replacing people with machines on a regular basis and construction will be at low levels for some time.
In other words, we really need to come up with a plan B for most of the unemployed.
6 comments:
What will "Plan B" look like?
I see two possibilities:
1. More public sector jobs. Higher taxes.
2. More protectionism. Higher tariffs.
Since option 2 is politically incorrect, 1 is more likely. Tax financed jobs is a kind of protectionism also, but accepted.
Note that I don't recommend anything, rather just trying to figure out what will happen.
The situation with higher return on capital in the West and higher return on work in the East creates social tensions.
Innovation and new technology in the West will not help people with low education very much.
Johan
Excellent points....
I believe you are right about the permanent loss of some of these jobs but exactly how much are gone for good is hard to predict.
Aren't all recession "blue collar recessions"? This is not a rethorical question. It would be interesting to see the above chart back to the 40s.
Tom
Are you usuing Non Farm Payrolls for you data? Since Dec 07 I see of the 8m jobs lost that 1.8m are in construction and 2.2m are in manufacturing the other 50% are in services (proffesional, retail, finance, leisure).
For manufacturing, for every historical recession (except 2001)manufacturing has returned to pre recession levels. I do not find the evidence of permenant job loss very compelling. The fact is that the US needs to more than double its home production and car production just to meet sustainable demand (from population growth in the case of homes and from natrual depreciation for cars). This downturn has been an inventory freeze due to fear, but its not clear there has been a massive wave of outsourcing in the past year. In fact the weak dollar and immenent rise in Asian currencies will likely slow outsourcing down. I think the case for a healthy jobs rebound is quite strong. This blog is one of the only place to find such comment.
great graph, a must see for every high school student..
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