Unemployment and Structural Change (2)

I have written previously about unemployment and structural change in the economy, arguing that we are facing a particularly bad outlook for employment.  The New York Times on Saturday had a good article on this subject that combined some chilling statistics with a couple of stories of individuals suffering the consequences. Probably the most important chart from the article is this:

The dramatic growth in long-term unemployment is the surest indicator of structural change.  To the extent that there are jobs, they are in different areas of the economy (both geographically and more importantly in different sectors).  The accompanying stories make the same point that while some jobs are available, the long-term unemployed live in the wrong place (and lack the resources to relocate) and/or have the wrong skills and experience.

I believe the magnitude of this problem will eventually become so large that it will force us to reconsider many of the most basic ideas about how society is organized.  My thinking on this was spurred by reading Brad Feld’s post on a book call “The Lights in the Tunnel” which considers a future of 75% unemployment.  I have started to read the book itself, but can’t recommend it as the writing strikes me as muddled at best – instead, I am planning to write more blog posts on the subject.  What’s critical is to keep in mind that at the same time that employment is disappearing, we are also heading towards an age of abundance (starting with digital goods).