Gary S. Becker, a Nobel Prize laureate, wrote an article — Productivity, Unemployment, and the End of the Recession— on September 9th.
He talked about his op-ed piece for the Wall Street Journal (“We’re Not Head for a Depression") in which he possessed an optimism about the future economy of the United States. Otherwise, he also brought out an interesting point.
Dr. Becker supposes that most pessimism comes from erroneous interpretation of the unemployment.
Some people argue about the decline of unemployment is not satisfying; and some argue that the real unemployment is getting severe. Some other people even claim that we should include the underemployment.
Actually, no matter what number you apply, the growth of unemployment would not turn around so fast.
The reason that Becker expressed is the “productivity per person."
The total domestic productivity is actually accumulated by countless individual productivity. Dr. Becker noticed that the productivity per person continues growing, no matter how severe the economy is. Therefore, when facing a decrease in total domestic output, say, a recession or a depression, the increasing individual productivity will cause more people lose their jobs (or make them turn to part-time ones). It’s just a simple arithmetic question.
Unless the number of total domestic output passes the prior highest record, we would hardly notice the improvement of the job market.
Conclusively, the economists who only focus on the statistics of unemployment may just make a mistake in the economics logic.
Dr. Becker’s viewpoint is not only interesting but persuasive.
Nonetheless, I wrote an article about the law growth of wages in Taiwan and the U.S. through the “Comparative advantages theorem." See, “開放大陸勞工來台會降低台灣人薪資水平？."Considering the social-welfare regulations, unions, and the minimum-wage limitation, the wages in the U.S. and Europe are more difficult to be adjusted in the downturn. This may be why their unemployment situation has been severer than Asian countries.
I have no idea of which factor matterring more. But it’s a question worthy of thinking.