July 24, 2014 | Contribution by
ADRIANA KUGLER Adriana Kugler is a Full Professor at the McCourt School of Public Policy, Georgetown University.
A "sign of the times?", Arizona, November 19, 2009. Photo credit: Flickr @Nick Bastian
Government jobs not pulling their weight in U.S. recovery
As the dust settles from the U.S. "Great Recession" and the ensuing global recession, many theories circulate about both the nature of the recessions and the success or failure of government economic policies to reinvigorate economies. A welcome perspective to this debate is Adriana Kugler, a Full Professor in Georgetown University's McCourt School of Public Policy and the Chief Economist at the U.S. Department of Labor in 2011-2012.
She tells us that the "Great Recession" (Dec. 2007 — June 2009) — compared to past U.S. recessions (dating back to the 1960s) — stands out in two key ways: (i) the depth of the crisis (a much bigger drop in aggregate demand) and (ii) the fact that government jobs didn't contribute to the jobs recovery (see figure below). As for the 5.5 percentage-point rise in the unemployment rate — a higher increase than even the 4.8-point-rise in the 1980s — Kugler estimates that two-thirds of this was cyclical (associated with business cycles) and one-third was structural (associated with issues like a skills or geographical mismatch). However, she plays down worries about a growing skills mismatch, citing recent employer surveys that show that this is a lesser problem than in the past. And she insists that it hasn't been a "jobless" recovery.
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(Part 2 will examine policy issues and labor mobility.)