What Is A “Jobless Recovery”? Part 1 of 2

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What is a “Jobless Recovery”

Ever heard the joke about economists?  “If you laid all the world’s economists end to end, they still wouldn’t reach a conclusion!”
The term”jobless recovery” have been bandied about recently to describe the “end of the recession”, and I’ve decided to add my ten-cents

worth.  The term was first used in the 1990’s by economists who noted that a country’s Gross Domestic Product could actually increase, even though unemployment figures were static, or were continuing to rise.

Gross Domestic Product is nothing more than a figure, denominated in that country’s currency, that quantifies how much trade was done, both WITHIN the country and WITH other countries.  So, if lots of trades are made using that country’s currency, and the trades make up an increased amount on the previous three months (a quarter), then the economy is said to be growing.  Conversely, if the figure is less than the previous quarter, the economy is said to be slowing.

Think About It

What they are saying is in effect, because of mechanization, automation and sophisticated technology, and country’s output of products and services can increase, even though fewer people are working.  This is not only true, but it is also a FACT.  It CAN happen.

Good For You?

Because of advanced technology, it’s possible for humans (in any country) to be more productive. The Industrial Revolution proved this point very well, with increased output in food production, manufactured products and speed of transportation of goods to name just a few things.

So, that makes everybody better off, right?  Erm, actually, not necessarily.  Just because more products are being produced, and more services are being offered, doesn’t mean that the people IN the country producing them are any better off.  Many times, the most productive countries have a very poor population (e.g. China, India) overall.

Tomorrow, I’ll conclude this article with what I think can REALLY get the world’s economy back on track.

Luke.