Economist muses on cause, solutions to jobless recovery
Fairfax, Va.— V, U, W, L. The first slide of professor Tyler Cowen’s presentation on the recent financial crisis appeared as if it were an eye doctor’s chart.
Cowen explained these letters are actually shapes that appear in economic data graphs during a recession, mentioning that the current pattern is in the shape of an “L.”
The March 29 event, part of the George Mason University Vision Series, captured the imagination and attention of over 250 Mason community members in attendance at the Center for the Arts. For Cowen, an author, economist and media contributor, the jobless recovery appeared to be a natural progression of many complex factors.
“People think that there is some big recession that started in 2007, and in 2006 things were great,” Cowen said. “This entire decade there has been no job growth at all.”
Cowen claims that what has taken place since 2007 is different than what happened after the Great Crash of 1929. During this recession, “a lot of people are underemployed — but there are those worse than unemployed…who say ‘No, I’ve given up!’” and are categorized as discouraged workers.
Cowen also said, “40 percent of those unemployed have been unemployed for over half a year. We’re not used to [a recession] being so persistent and lasting so long.”
In his presentation, Cowen noted a trend showing that younger people are waiting longer to get married. As with jobs, “people are searching more, and they care about the quality of a match,” he said.
So where is the money coming from now for consumption? According to Cowen, access to cheaper resources now means things can get done quicker for less, even as the labor pool dwindles. Those earning less than $12,000 per year have an unemployment rate of more than 30 percent, compared to the 3.23 percent faced by top earners.
With labor jobs going to India and China, what of our labor force?
“People in the eighties blamed the problems on Japan; in the last decade, we blame it on China,” said Cowen, who compared our shedding of labor jobs to the recent trading of several prominent members of The Washington Wizards who were let go to save on the pay of their exorbitant salaries.
Cowen thinks innovations like Twitter are useful towards creating jobs and making innovations in the marketplace happen, even if they have not quite figured out a way to make a profit yet.
Yoanna Ganeva, managing director of Mason’s Interdisciplinary Center for Economic Science (ICES) Program Lab, enjoyed Cowen’s approach to the complexities of the financial crises, and was interested in his ideas of “ways to integrate the immigration issues our country faces as part of helping our economy’s recovery.”
Cowen ended his lecture by speaking about John Stuart Mill, and his concept of the “Stationary State” introduced in 1848 and the “techno-utopia” of the recent past decade.
For Cowen, technological changes are imminent. He said we are already living in a “technotopia” with the advent of the Internet, blogs and cell phones. So, job seekers be warned: the job revolution of the future will be created by the innovators of today.
George Mocharko, Stylus Staff Editor