There is little question that the U.S. labor market is now improving, but ongoing research indicates that America’s job market remains deeply wounded. A recent paper authored by University of Chicago economist Stephen Davis and the renowned University of Maryland economist John Haltiwanger highlights evidence of labor market stagnation.
According to the authors, there remains a dearth of creative destruction, with fewer people leaving jobs for better ones and many simply not working at all. As pointed out by writer Binyamin Applebaum, one of the clearest measures of economic malaise is the share of American adults with a job. The proportion fell from 62.7 percent at the end of 2007 to 58.3 percent by the end of 2009. It has since rebounded to just 59 percent.
Moreover, those who have jobs are more likely to remain in them. That doesn’t sound like a bad thing, but it means that many people remain content to remain in positions that do not take fully advantage of their capacities. Wait – there’s more. The lack of churn in the labor market also means that it has become much more difficult for younger people to find jobs and those who don’t are more likely to remain outside the labor force.
