Job Losses vs. Unemployment
it looks like job losses in construction and manufacturing are huge! In contrast, job losses in finance or business are much smaller, government is flat, and health and education have actually gained jobs!
On his post, you can see two graphs. One graph, showing for each sector the ratio of unemployment now vs. unemployment before the crisis, shows no structural shift at all. The other graph, showing absolute job losses by sector, shows more of a structural shift.
I am not surprised by this, although I do not agree with Stuccio’s explanation. I think it is a case of measuring an absolute number vs. measuring a ratio. Hypothetically, if before the crisis there were 400,000 unemployed manufacturing workers and 10,000 unemployed high-tech workers, while after the crisis there were 1 million unemployed manufacturing workers and 25,000 unemployed high-tech workers, would you say that there has been no structural shift? Depends on how you look at it, I suppose.
These attempts to shape data to make a point (“It’s mostly aggregate demand!” “No, it’s not!”) do not impress me in the least. In the long run, if more people adopt the paradigm of Patterns of Sustainable Specialization and Trade, they will stop looking at static concepts like sectors and instead look at the dynamics of what I call discovery. I think if we are going to get anywhere with the new paradigm, we will have to come up with new metrics. I think we will have to get a handle on adjustment costs, including the cost of firm formation, the cost of expanding enterprises, and the cost of integrating new labor and capital into an existing enterprise.