This Bill Testa Post may seem somewhat confusing, but is a good Read for analysis. He is basically stating that people are retaining their Jobs longer, but there is a general trend of loss of Jobs throughout the Midwest correspondent with the reduction in Durable Goods manufacture and Industrial Services. The Switch to Offshore Production has not been gentle to the Midwest, even to the Present Day. The Great Moderation is a Great Mini-Recession for this Section of the Country. Someone like myself who has worked in this Section realizes that the Opportunity has deserted the Midwest, and without some form of Drive to competitively manufacture being introduced; it is unlikely to reacquire its Employment base.
Mark Thoma has a good Post on the concept of The Great Moderation. The Work done in the Papers linked in Mark’s Post is very good, but there is a distinct disconnect in correlation to the Ageing of the Labor Forces as a Whole. Here lies what I believe is the real Source of the Great Moderation. Skilled Labor has retained their Employment to far greater degree than unskilled Labor, and the decline in unskilled Labor numbers coupled with American Youth demands for equalized Wage scales comparable to their Parent’s introductory Salaries brought on the Rush to Offshore; this massively helped by Environmental regulations and demanded Health and Pension benefits by Youth. Offshore Producers not only found adequate Labor numbers, but much cheaper Employees.
A truly ironic aspect of the Driving force behind The Great Moderation results from the basic ingratitude of the current Business leadership. This Group were educated and hired under the Social structure established the New Deal, the G.I. Bill, massive infusion of Research Grants and Educational Funds founded in the 1960s, and overgenerous Entrance salaries continuing until the Tight money policies of Burns. They now advocate Rugged Individualism after their own positions had been entrenched under the old Socialized system. Greed may not be Evil, but it still doesn’t smell very good!. lgl