There was one more point that I had intended to make in the original post on cyclical and structural unemployment but neglected to in that post so I’ll make it here. Are both Dr. Krugman and James Surowieczki mired in an obsolete view of the economy?
During the Great Depression of the 1930s at least 75% all workers worked in direct production: they were either farmers, miners, or worked in manufacturing. Structural unemployment could be distinguished from cyclical unemployment because it wouild be localized to specific affected sectors.
Now the nature of what people actually do is almost completely the reverse. No more than 25% of American workers work in direct production. What would structural unemployment look like for those involved in indirect production? I suggest that it might not be isolated to specific sectors but be spread throughout the economy.
In other words, it might look a good deal like what we’re seeing now.
No, at risk of being redundant, it is less about what the unemployed were doing before they were unemployed, and more about what they are waiting for, before they get back to work.
We think (hope) we can beat the emerging economies without working so hard or for so long.
There are a billion people working really hard right now. Just doing the work matters.
(What we have going for us is that we are a hugely wealthy nation. The question is how to adapt to a high wealth, low income, future. It would be very easy to mess that up. People do it all the time.)