Reasons for Jobless Recoveries

[Bo]

Before the 1990s, typically when a recession ended massive job growth followed immediately. However, this changed in 1990-1991, when job growth significantly lagged behind other economic indicators. This occured again in 2001-2003 and will probably occur again in 2010. What do you think causes these jobless recoveries?

I'd say the fact that productivity increased much more rapidly starting from about 1995 and thus companies were able to produce as much output without hiring less people. I also think that part of it is due to globalization and the fact that many U.S. comapnies now make jobs in other countries (China, India, etc.) as well as the U.S., which prevents large job growth in the U.S. immediately following a recession. Finally, I think companies began to reduce people's work hours instead of firing them during bad times, and thus comapnies give their exisiting workers more hours to work before hiring new workers. Well, I would like to hear other people's thoughts on this.

[Bo]

Might as well put up another chart:



As evidenced, the "peaks" are wider in the last two recessions than they were before.