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There Is No ‘Structural’ Unemployment Problem

September 5, 2012 by econsforromney

A look at the skills-jobs mismatch finds no evidence that changes in the economy explain high joblessness. The problem is slow growth.

By EDWARD P. LAZEAR

The unemployment rate has exceeded 8% for more than three years. This has led some commentators and policy makers to speculate that there has been a fundamental change in the labor market. The view is that today’s economy cannot support unemployment rates below 5%—like the levels that prevailed before the recession and in the late 1990s. Those in government may take some comfort in this view. It lowers expectations and provides a rationale for the dismal labor market.

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