This led me to think about charts like this:

http://economix.blogs.nytimes.com/2012/02/03/comparing-recessions-and-recoveries-job-changes-4/

which illustrate the change in jobs during the various recoveries from ‘V-shaped’ to ‘U-shaped’.

There’s no other there there. I have never encountered a conservative meme that had support in reality.

I’m trying to get an understanding of the “roots” of the long lived mime regarding unemployment that it’s just some kind of “unfortunate natural economic phenomenon” that “just happens” when economies slow down and “can’t” employ everyone. I’m guessing that its the product of human “pack” mentality combined and reinforced by the industrial revolution’s gathering of huge numbers of laborers and wanting to keep the “core” of that workforce relatively calm and subdued, especially when it could be done at a relatively low cost. Obviously when work slows down, the pack resists outsiders (otherwise known as “scabs”) who would work for less and bring wages down for all. Employers gain more by keeping the “core” relatively subdued and in a relatively weak negotiating position than they stand to gain by allowing a relatively small percentage of cheaper workers access to the jobs as the disruption they would cause would offset most of the economic gain; and this only occurs when employers face a surplus of workers anyway. Obviously, a truly “free” market in labor would be quite threatening to those benefiting from these closed “markets.” Even Keynes, who deplored the social costs associated with idled workers, never seemed to focus on the “price fixing” aspects of the plight of the unemployed. When it later became very apparent that laissez-faire capitalism would result in huge, powerful, trusts and cartels which would be able to engage in rampant price fixing with their enormously destructive monopoly power, labor was exempted from restrictions on price fixing and market manipulation. What was the moral justification for allowing this “price fixing” in labor markets to continue? Was it simply the lack of power and representation of the unemployed to do anything to resist these output gap costs being imposed on them or was there some “economic” justification for this? Why is this mime just accepted by economists today without any scrutinization of the underlying justification for these practices? If this mime were adequately exposed for what it is by economists instead of propagated by them as some kind of “natural occurrence,” the question that would need to be answered is: are the unemployed being adequately compensated for the costs that society imposes on them through this “price fixing” scheme or should this problem be solved in a way that those benefiting from the “price fixing” pay the resulting costs of it and not just impose these costs on those denied access the “market.” When posed this way, the question of “should we extend unemployment coverage?” gets properly displaced by the question “are those precluded from accessing the employment ‘market’ being adequately compensated for the losses imposed on them so that those with ‘market’ access can maintain their standard of living?”

Do you happen to know of any works that attempt to address these issues or discuss how this legal “price fixing” came to be resolved in its present form? So much of what we’re doing with regard to unemployment compensation, job sharing, currency manipulation, and deficit spending rests on this shaky foundation that it seems incomprehensible that this isn’t at the forefront of our public discourse. I’d appreciation any direction you can provide that might be able to shed some light on the rationale behind this apparent discrepancy.

1. What about the portion of personal income that is received in the form of health care coverage – is that included in your analysis? If not, would that alter the trajectory of inequality growth?

2. It seems that there is something inherently logical in saying that slack unemployment affects the lower and middle income families more because the top 5% work in jobs where they earn higher incomes because of something unique about what they do, and so are less subject to overall economic factors that affect the labor market. I do not have the data, but I suspect that unemployment among even Wall St bankers (who were at the epicenter of the recent crisis) rose less than it did among the rest of the population. The rest of the 95% works for the most part in industries where labor levels can be easily adjusted in response to economic conditions.

What I want to know is, what happened around 1975 that changed everything?