One of Newsweek?s saner voices, Robert J. Samuelson, explains this week why the nation?s current unemployment problem is different from the double-digit unemployment of the early 1980s. Among his most interesting observations:
What’s most ominous is not today’s job market; it’s the outlook. After the 1981?82 recession, unemployment dropped steadily, from an annual average of 9.7 percent in 1982 to 7.5 percent in 1984 and 5.5 percent in 1988. The descent this time is expected to be much slower. In 2014 the unemployment rate will still average 7.6 percent, forecasts IHS Global Insight, which predicts a peak of 10 percent early next year. Reducing unemployment requires an economic expansion fast enough to absorb today’s jobless as well as the natural growth of the labor force. Most forecasters expect a tepid recovery that will only gradually dent unemployment, despite slowing labor-force growth.
At a time, then, when we need more jobs, does it make sense to take money out of the private sector for misguided government stimulus measures? Of course not, as Roy Cordato explains below.