What follows are three charts from the Economic Policy Institute. This one highlights the ratio of unemployed persons to job openings. Although the ratio has fallen since the “end” of the recession, it remains considerably higher than a decade ago. It currently stands at 4 unemployed per job opening.
This one breaks down the data by industry. It reveals that there are problems across the board.
This final one shows that the job crisis is hitting everyone. As the Economic Policy Institute explains: “Those with higher levels of education are leaving (or never entering) the workforce at the same rate as those with just a high school degree.” Only those with less than a high school diploma seem to be experiencing improved employment opportunities.
And the response of many political and business leaders to this dismal situation? Primarily calls for austerity–or better said cuts in social spending. Some economists have even developed a theory of austerity-led growth, arguing that slashing government spending will unleash private investment and job creation.
We have been witnessing a test of this theory in Europe and not surprisingly it hasn’t produced positive results. As the economist Kevin O’Rourke explains: “One lesson that the world has learned since the financial crisis of 2008 is that a contractionary fiscal policy means what it says: contraction. Since 2010, a Europe-wide experiment has conclusively falsified the idea that fiscal contractions are expansionary.”
I am willing to bet that this outcome wasn’t a surprise to most workers.