There's an interesting debate bouncing around newspapers, magazines and websites about the nature of our unemployment. Are we suffering mostly from temporary weak demand, like an economy of bakers when nobody's hungry? That would make our problem cyclical. After all, people will get hungry, eventually.

Or are we suffering from a fundamental mismatch of labor skills and demand, an economy of bagel bakers when we've all gotten over bagels? That would make our crisis structural. People will get hungry again, eventually, but they won't necessarily come back for the same cuisine.

The answer is we don't really know. As Kevin Hassett pointed out to me, the cyclical can easily become the structural. When folks are out of the workforce for more than six months, their skills start to deteriorate and they're branded with a scarlet letter: A for Atrophy. Long-term cyclical unemployment and structural employment can bleed into each other.

Here's an illuminating chart from Annie Lowrey on job growth in major sectors since 2005. Most sectors have moderate jobs losses. Manufacturing and construction are off about 20 percent in the last five years. "Mining and Logging" and "Education and Health" are the only two sectors with overall job growth.*

job loss cyclical structural.png
Retail jobs will come back when consumers come back. Online shopping aside, there's no indication that "the store" will be a casualty of the recession. Ditto transportation and business services, which are both super-sensitive to short-term shortfalls in demand for travel and business' disposable income. But will technology continue to kill jobs in manufacturing by boosting productivity? Was construction artificially inflated in 2005 because of an unsustainable housing boom? These are open questions.

Education and medical jobs -- the eds and meds, as they're called -- are already expected to grow faster than any two industries in the next decade, according to White House projections. As this graph shows, they'll be racing away with a head start. As the private sector shrunk, the federal government grew into the vacuum, buoying sectors that rely on government support including military, education and health care. But ignore the red line, and this is a cross-section of the jobless recovery.


*My reaction was the same as Annie's: what the heck is up with Mining and logging? I dug into the BLS data and found that the category's proper name should be printed: MINING and logging. There are only about 70,000 loggers in the country, compared to more than 700,000 workers in the mining industry, which was buoyed in the late-aughts by high energy demand. BLS expects the mining industry to undergo a 20 percent contraction in the next decade as technology increases productivity and replaces medium-level positions.

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