Fewer Workers Are Unemployed and Under-employed

WHY IS THIS IMPORTANT? Ensuring that all Americans who want to work are able to is the goal of any economy, new or old. One indicator of progress in that direction is the share of Americans who are either unemployed or involuntarily working part-time instead of full-time (under-employed).

THE TREND: Together, unemployment and under-employment declined as a percentage of total employment from 11.4 percent in 1987 to 9.7 percent in 1989, but increased in the recession of the early 1990s. In 1997, at a similar period of the business cycle, the figure was down to 8.4 percent.

In the New Economy, even in periods of low unemployment, the United States should be able to enjoy lower levels of inflation than were the norm in the 1970s and 1980s for two reasons. First, technology contributes to a reduced risk of inflation by allowing companies to avoid production bottlenecks. Second, globalization and other forces leading to increased competition in product and labor markets tend to hold prices down by reducing the ability of workers to excessively bid up wages-and the ability of companies to raise prices-faster than productivity increases.

THE DATA:

Go to next indicator >>

Index Home | Introduction
SECTION I | SECTION II | SECTION III
Productivity Paradox | Knowledge Economy
Nine Myths | Data Sources | Endnotes | The Authors

The Progressive Policy Institute (PPI)
Technology, Innovation, and New Economy Project
600 Pennsylvania Ave., S.E., Suite 400, Washington DC 20003
Phone: (202) 546-0007

www.ppionline.org