A Jobless Recovery May Mean More Big Macs in our Future

by on January 27th, 2004

The Washington Post’s lead off Editorial “The Jobless Recovery” suggests that job creation, rather than job retention, is the right angle for politicians to take regarding the current unemployment.

In other words, you ain’t getting your job back.

It’s true that the shift of service jobs to countries such as India, like other trade-related dislocation, adds to the temporary pain of structural unemployment. But, as Mr. Greenspan says, new jobs will be created. If a U.S. firm shifts employment abroad, the savings flow back to the United States in the form of lower prices for consumers and higher dividends for shareholders; the consumers and shareholders will direct their new spending power at things that create employment.

In other words, although the dot-com bubble might’ve burst over your head, demand might be so high in the next few years that you might be able to get a newly created job at McDonald’s, as consumers will save enough money from unemployment to spend it on Big Macs 5 days a week, instead of the current 3.

Edward E.J. Davis