Why is this recovery different from all the others (cont'd)

In recessions going back 30 or 40 years, laid off factory workers would get their jobs back once business improved. They would be "recalled." This was especially true in cyclical industries like autos. These days, employers still call them layoffs, but in many cases they're really firings - those jobs will never be recalled. Ed Leamer, director of the UCLA Forecast, says these displacements help explain why the jobs recovery has been so weak. From the new quarterly report:

This time we have experienced a record number of permanent displacements. We have lost another 2.5 million manufacturing jobs, displaced by low-wage foreign workers, skilled robots, and intelligent microprocessors. We have lost 2 million construction jobs that are not coming back again. At the height of the housing boom we were producing 2.2 million housing units while normal is only 1.5 million. That ratio 2.2/1.5 represents excess capacity in homebuilding including approximately 2 million jobs. Also it appears that the retail sector has almost 1 million displaced workers, in part because overshopped consumers are not likely to return to their unsustainable spending levels but also because Internet shopping and information technology in the retail stores are both trimming the retail workforce. In other words, we have as many as 5.5 million workers who are permanently displaced and only about 3 million who are likely to be recalled. That’'s a tough problem which is largely unresponsive to the fiscal and monetary medicine we have been taking. It is likely to take a very long time for those 5.5 million displaced workers to find jobs again, and in the meantime the economy will grow, but not as robustly as in traditional recoveries when the recalls were almost 100%.

Bookstore closures are a small but telling example of these displacements. The thousands of people being laid off by the closing of Borders stores - not to mention the countless numbers of independent bookstores - will have a very hard time finding similar work. Yes, time marches on, but in the near term are lots of casualties.