Thor Berger and Carl Benedikt Frey write,
in 2010, only 0.5% of the US labour force is employed in industries that did not exist in 2000.
We have been creating new industries that require few workers, and they are displacing industries that required many workers. This leads to a lot of adjustment problems, and the PSST story is that all recession are adjustment problems.
Pointer from James Pethokoukis.
The point is reasonable, but most tech and internet-based industries already existed by 2000 — the notable exceptions being social networking and video/audio streaming (though there were some video-on-demand companies before 2000). And it’s not clear that social networking has displaced any workers at all (except, I suppose, in the sense that browsing Facebook is a general substitute for other non-free leisure activities).
It seems to me that the bigger effect is not in industries that have appeared only after 2000, but in those where the displacement has been gradual but inexorable and is still ongoing (e.g. the newspaper and magazine industries).
So it is a good thing the labor participation rate has dropped during The Great Recession?
But which causes which or is this a case of co-determination?
Compared to?