More people are out of work than at anytime in the last quarter-century and those who are still employed created a jaw-dropping 9.5% surge in productivity in the last quarter. This is the essence of a jobless recovery.
The economics blogger Brad DeLong had a great post yesterday that I hope he'll forgive me quoting at length:
Back in the 1930s there was a Polish Marxist economist, Michel Kalecki, who argued that recessions were functional for the ruling class and for capitalism because they created excess supply of labor, forced workers to work harder to keep their jobs, and so produced a rise in the rate of relative surplus-value.
For thirty years, ever since I got into this business, I have been mocking Michel Kalecki. I have been pointing out that recessions see a much sharper fall in profits than in wages. I have been saying that the pace of work slows in recessions--that employers are more concerned with keeping valuable employees in their value chains than using a temporary high level of unemployment to squeeze greater work effort out of their workers.
I don't think that I can mock Michel Kalecki any more, ever again.