From the department of “even a blind pig finds an acorn every so often”, the New York Times has lurched uncontrollably onto the reality that not only is the employment situation in the United States not what it should be but other developed countries are doing a lot better in that regard than we are:
The American economy may be the world’s biggest, but when it comes to job creation since the recession hit at the end of 2007, it is far from a leader.
Indeed, contrary to the widespread view that the United States is an island of relative prosperity in a global sea of economic torpor, employment in several other nations has bounced back more quickly, according to a new analysis by the Bureau of Labor Statistics.
The government reported Friday that the nation added 175,000 jobs in May, continuing a 32-month run of job gains. The unemployment rate moved up slightly to 7.6 percent, from 7.5 percent in April.
But overall employment in the United States remained 2.1 percent below where it was at the end of 2007, according to the statistics bureau. By comparison, over the same period, between December 2007 and March 2013, the number of jobs was up 8.1 percent in Australia; Germany, the biggest economy in the troubled euro zone, has managed a 5.8 percent gain in employment.
It’s not just Germany and Australia. Canada (7.1%) is doing better than we are. Mexico (5%) is doing better. Brazil (5.8%) is doing better than we are. Russia (5.6%) is doing better than we are.
Certainly, there are countries in worse shape than we are:
While several European countries have fared worse, Canada, Sweden and even Britain, which is trapped in yet another recession, have enjoyed healthier job gains than the United States. In fact, of the nine countries surveyed by the Bureau of Labor Statistics, only perennially-troubled Italy and Japan performed worse.
Do we really aspire to being clumped with Italy, Greece, and Spain? We must be doing something wrong.
Not sure what is meant by “healthier job gains”. Britain’s nominal unemployment rate is identical to our own, while we don’t have the option of running large trade surpluses like Germany which also uses work-share programs to subsidize its exports and promote employment.
How hard were Australia, Canada, Brazil and Russia hit by the housing crisis? How much were they running up public and private debt? We have been doing something wrong since about 1980. I think you are right that we could do better, but not dramatically so. Our growth has become dependent on debt financing. Learning a new way, if we can, will take a while.
Meanwhile we continue to perk along with record profits and near record levels of unemployment. I was told 3 years ago by a real businessman that this couldn’t last, but it has. Returns to labor have decreased in almost the entire developed world. Capital, and those who hold it, rule. I am not sure there is much of a link anymore between investment and employment. Certainly not so much when it comes to better paying jobs.
Steve
They’re all different cases. I posted on Canada’s avoidance of a financial crisis at some length. Note, particularly some helpful comments.
Australia may well just be lagging the rest of the world. There are some signs it has a housing bubble in he making.
All four of those countries have also benefited mightily by the boom in commodities.
Ultimately, I don’t care. The U. S. had a housing crisis of its own making. Complaining about that is like the lawyer defending a guy on trial for murdering his parents asking for mercy because he’s an orphan. Our housing and banking regulations aren’t laws of nature. If we need to change them, we should and about darned time.
With the exception of Germany (though I haven’t checked Germany’s inflation stats), I bet we’ll see a much more accommodating central bank in each example of higher job growth (As evidenced by continual increase in nominal growth). I keep thinking Canada’s housing is a bubble about to burst, but what keeps happening is housing prices soften or flatten for a while. No big deal. Then you have to wonder if that’s the bubbles are supposed to deflate if the central bank is doing it’s job right.
Just as a reminder I think that our economic problems are due mostly to two factors:
I don’t know which of those is the more significant. I don’t think that technology is the bugbear that MR does. I also don’t think that things will get better until we address one or both of the factors above.
All of the other countries you cite have, in theory, more deadweight loss than we have (not as sure about Mexico). Why would it affect us more? BTW, I have always wondered about the claims of 70,000 pages of tax code. Turns out it is not correct.
http://www.mauledagain.blogspot.com/#8706872912868094445
Steve
By what measure? We have about the same government spending to GDP as Brazil, Australia, and Canada and certainly get a lot less for it than Australia or Canada do.
Additionally, I think you’re assuming that bureaucracy scales linearly. It doesn’t. We probably have more deadweight loss simply as a matter of scale.
Really? Might I ask how you came to that conclusion?