Stiglitz on Jobs and a Revolution in the Real Economy

Serge Melki/Wikimedia Commons

While going through a stack of old magazines, I found this Vanity Fair article, The Book of Jobs, by Joseph Stiglitz, economist and Nobel Prize winner. Stiglitz argues here that the economic downturn is  not "just" due to the financial crisis, but caused by a revolutionary shift in the real economy from industry to services. As so often with fundamental analysis, even though it was released in January 2012, it's equally relevant in today's economy. This is what Stiglitz said:

 "It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are falling—the real income of a typical American household is now below the level it was in 1997."

The continued dismal unemployment situation was confirmed by The Wall Street Journal when stating last week that "only 14 of the country’s 100 biggest cities have more jobs than they did pre-2008/2009 recession."
 
Stiglitz continues: