There is little doubt, as the numbers in GE's Working in America
data visualization suggest, that the nature of labor force participation and the structure of our labor force have changed significantly during the Great Recession. But, the data also tell us that industry-specific shifts, to be expected in a dynamic economy, have been underway for a long time.
In fact, it is important to realize the understated truth that the American labor force has been shifting in its composition and nature since the beginning of the republic. In 1860, for instance, only a fraction of the population even knew what railroads were, and within two decades, railroad companies were the largest corporate employers ever known to mankind. Of course, this reflected the forerunning of the labor force change that occurred in capital markets. The rush to get money into these companies was the story of the 1880s and it continued for several decades.
But beneath this story, one of thousands in which a new industry emerged and began to reshape our nation's labor market, is the component that is missing in today's economic scene. The U.S. has seldom had such a prolonged period of slow growth. While we are not continuing in a recessionary mode, recent estimates have been revised to indicate that the U.S. will grow at less than two percent this year
. This is in many ways "non-American," as our country's distinct story has been one of growth.
The data in the Working in America
data visualization suggests that this dynamism is becoming less a fixture of our economic firmament. A very weak labor market exists because we are not seeing much growth. As Bob Litan and I suggest in our forthcoming book Better Capitalism
(Yale, 2012), no concern about sluggish upward mobility or negative shifts in income distribution can be remedied without growth. We may be gradually shifting our expectations of growth and beginning to sink into a stratified labor market where people don't aspire to upward mobility.