Here's a depressing read. The author argues that the nature of unemployment in this recession differs from those of previous depressions, which is one of the reasons why the increase in unemployment was underestimated. Past models were applied to current circumstance and gave a faulty prediction.
Explanations for the collapse of the great American job machine begin with the marked absence of what is called labor hoarding. Usually during recessions, firms keep most of their employees on the payroll even as business slows, in effect stockpiling them for better days. In the current downturn, hoarding seems to have gone into reverse. Not only are firms laying off redundant workers, but they seem to be cutting into the bone. . . . the absence of hoarding means that firms do not expect business to pick up soon. This is supported by other evidence, like a doubling in the number of involuntary part-time workers (there are nine million of them) and the shrinking workweek, now 33 hours — the shortest ever recorded. Presumably, before companies start to rehire laid-off workers, they will ask their current employees to work more.
In short, even if the recession ends, unemployment may hold steady as firms on the rebound simply increase the hours of current employees before they start rehiring.
It's a good time to be in school I suppose.
