Slow job growth

The good news is that the economy is adding jobs; but the bad news is that the job gains appear to be on the low end by historical standards, says host Mary Walden. She asks her husband, economist Mike Walden, “Do we have an easy answer as to why?”

Mike Walden: “Well Mary, this is probably issue number one both nationally and here in North Carolina as to why we have such a slow rate of job growth. And you’re right. We have added jobs, but the pace has been slow. Several reasons have been offered.

“Reason one, construction. We lost a bunch of construction jobs during the recession. Here in North Carolina, they’ve not come back yet. Number two, people have debated at the national level — and we see this debate here in North Carolina — the effects of the Affordable Care Act, the effects of the Dodd-Frank financial re-regulation act, whether those massive pieces of legislation may be slowing down job growth.

“But really the slow-down in job growth isn’t really new. If you go back to the previous two recessions we have seen a gradual reduction in job growth after each of those recessions. For example, the first four years after the 90s recession, jobs increased 12 percent here in North Carolina. After the 2000s’ recession, they increased 10 percent; and after this recession, jobs increased in four years only 7 percent.  So, many economists think something else is going on, and what they think that something else may be is technology.

“We are seeing a massive increase in the ability of technology and machinery to actually do the work that people do. And of course, we know about this in the factory, but it’s gradually expanding to the service sector. So this is a complex issue, but I think some of the answers may lie in how our economy is changing with technology.”