ABSTRACT
The Great Recession of 2007–9 has often been referred to as the most severe economic downturn since the Great Depression. According to the official verdict of the National Bureau for Economic Research announced in September 2010, the trough of the recession was reached in June 2009 and a recovery followed. But said recovery has been different from any other in postwar US history. By 2010 corporate profits surpassed the previous 2006 peak and have risen strongly ever since. Investment, however, has remained sluggish. In 2012, more than three years after the official end of the Great Recession, real net private domestic investment was about 46 percent of its 2006 level. This peculiar co-existence of growing profit margins and weak investment has puzzled numerous analysts. But nowhere is the dubious character of the recovery more obvious than in the US labor market where employment has not yet recovered to its pre-recession level. Moreover, the complexity of the labor market situation extends beyond the slow pace of job creation and is compounded by the interplay of pre-existing tendencies, such as the continuous transformation of the occupational structure of the US economy which has been skewed towards the proliferation of low-skill, low-wage jobs, and novel ones, such as the rise of long-term unemployment. These realities suggest that the once celebrated “great American job machine” may have become a thing of the past and, arguably, is increasingly unlikely to return.
