Though the 2008 economic recession officially ended in June of 2009, the United States has still been experiencing a consistently high level of unemployment during its recovery. This is a subject of critical national concern that policymakers and stakeholders alike must address as we continue to put America back to work. This past Monday, the American Enterprise Institute (AEI) held a panel discussion titled “The Labor Market Today: Is Unemployment Cyclical or Structural?” to better address and explain the nation’s struggle with unemployment. Peter Diamond, Nobel Prize-winning economist and keynote speaker at the event, expressed the urgency surrounding this perennial topic saying, “The issue of unemployment is to my mind a crisis in this county.”
Dean Baker from the Center of Economic and Policy Research and AEI’s Kevin Hassett joined Diamond on the panel to discuss whether unemployment is a product of the natural business cycle or if there are structural components at work hindering job growth. Diamond in particular argued that current trends in unemployment stem from a lack of aggregate demand and recommended further investments in education, training, and infrastructure to spur growth along with other fiscal and monetary stimuli. Alternatively, Hassett highlighted the negative consequences of long-term unemployment as a result of the recession. Each of the panelists agreed that more work is needed to reconnect unemployed individuals with in-demand jobs.
Career Technical Education (CTE) rests at a critical juncture between many of these potential areas of improvement and was spoken about positively. Diamond’s suggested fiscal policies promoting education and training were particularly useful in connecting the dots between investments in CTE and positive returns-on-investment later in the labor market. Along with this, the panel also recommended that keeping students, workers, and the unemployed consistently engaged with the labor market was of critical importance. CTE does this exceptionally well, providing students with practical workplace experiences along with the academic and technical skills needed to successfully compete in the workforce. Work sharing programs like those seen in Washington State and Germany were also mentioned as potential models for improving the national unemployment situation.
A summary of the event, related presentations, and an archived video can be found here.
Steve Voytek, Government Relations Associate