Unemployment

In Wreckage of Lost Jobs, Lost Power

But beyond these immediate causes, the basic structure of the American economy also seems to be an important factor. This jobless recovery, after all, is the third straight recovery since 1991 to begin with months and months of little job growth.

Why? One obvious possibility is the balance of power between employers and employees.

Relative to the situation in most other countries — or in this country for most of the last century — American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up.

Just consider the main measure of corporate health: profits. In Canada, Japan and most of Europe, corporate profits have still not recovered to precrisis levels. In the United States, profits have more than recovered, rising 12 percent since late 2007.

For corporate America, the Great Recession is over. For the American work force, it’s not.

Unfortunately, fixing the job market will take years. Even if job growth accelerated to the rapid pace of the late 1990s and remained there, the unemployment rate would not fallbelow 6 percent (which some economists consider full employment) until 2016. We could now be in only the first half of the longest stretch of high unemployment since World War II.

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In Germany and Canada, some companies and workers have averted layoffs by agreeing to cut everyone’s hours and, thus, pay. In this country, average wages for the employed have risen faster than inflation since 2007, which is highly unusual for a downturn. Yet unemployment remains terribly high, and almost half of the unemployed have been out of work for at least six months. These are the people bearing the brunt of the downturn.

Germany’s job-sharing program — known as “Kurzarbeit,” or short work — has won praise from both conservative and liberal economists. Senator Jack Reed, Democrat of Rhode Island, has offered a bill that would encourage similar programs. So far, though, the White House has not pursued it aggressively. Perhaps Gene Sperling, the new director of the National Economic Council, can put it back on the agenda.

Restoring some balance to the relationship between employers and employees will be more difficult. One problem is that too many labor unions, like the auto industry’s, have been poorly run, hurting companies and, ultimately, workers. Of course, many other companies — AT&T, General Electric, Southwest Airlines — have thrived with unionized workers, and study after study has shown that unions usually do benefit workers. As one bumper sticker says, “Unions: The folks who brought you the weekend.”

Which industries have the highest unemployment rate? Construction workers and telemarketers.

Unemployment Benefits Not Causing High Unemployment