GREENSPAN EXPECTS JOB GROWTH
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James Joyner | Wednesday, January 14, 2004 |
Federal Reserve Chairman Alan Greenspan yesterday dismissed worries that the U.S. recovery could peter out because so few jobs are being created, asserting the economy is not capable of growing rapidly for long without producing jobs.“It’s just a matter of time before we begin to see employment start to pick up quite significantly, as it always has in the past,” Mr. Greenspan said. He argued that the stunning 9.2 percent growth rate in productivity, or output per worker, seen in the summer is so extraordinary that it in effect “stole” jobs that otherwise would have been created as a result of booming growth.
In a rare comment on an economic report that shook the markets and raised doubts about the recovery Friday, Mr. Greenspan told bankers in Berlin that the meager December job gain of 1,000 reported by the Labor Department “is not surprising,” given such high productivity. But that rate of productivity growth is many times the average experienced by the U.S. economy in the past, and will not continue, he said.
So, basically, there is no need to create jobs as long as existing workers can hold up doing half the work of a non-existent worker in addition to their own? Makes sense to me.
About the Author: James Joyner is the publisher of Outside the Beltway and the managing editor of the Atlantic Council. He's a former Army officer, Desert Storm vet, and college professor with a PhD in political science from The University of Alabama. He lives just outside the Beltway in Alexandria, Virginia.
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I divide the political landscape into to general ways that people look at economic data. There is the fairness approach and the opportunity approach. The fairness approach looks at what the current state is. The opportunity approach looks at what the potential is.
Whining about job growth in a growing economy follows the fairness approach. The economy is growing but people are being left out. But if you get beyond that, you might notice that efficiency is what enables economies to grow. As a matter of fact, one thing that causes recessions is too many people getting paid to do nothing.
As the article says of course, there is a limit to how productive a worker can be and it's simple math that as the economy grows, more workers will be needed to meet the demand. Corporations will pick up some cash, hire millions of workers to work on projects that aren't really necessary, and the cycle will repeat.
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