At the New York Times Economix blog, David Leonhardt explores what he calls The Great Shift, which is pretty well summed up by the two charts shown here.
We have covered this before but it bears repeating. A change in unemployment rate doesn’t tell you much if the overall working population is changing, too.
The decrease in unemployment we are witnessing is more than offset by the size of the labor force. This means that there are fewer people who are “unemployed” and yet no there are no additional people with jobs. The number of people who have a job has remained fairly consistent over the past five years.
Leonhardt looks at various possible explanations: a skills gap, weak economic growth, more people on disability, but none of these seem particularly satisfactory explanations. (That last one is probably more a symptom of chronic unemployment than a cause.)
The factor not explored is automation. I believe that if these trends continue, it will emerge as the prime suspect. Of course knowing that automation is at the heart of the problem won’t solve the problem. it will only give us an inkling as to how severe the problem actually is.