[Alex3917]

I think the bigger picture is that at least in the US, most of these people will never get middle class jobs because they just aren't smart enough to really contribute anything.

If unemployment among youths is around 50% or whatever today, then just imagine what it will be in ten years when gas is $8 per gallon and we're facing food shortages. There is simply no way this is going to solve itself without massive government intervention, and I have trouble seeing that happening considering that there has been basically zero progress made by the federal government since I've been alive.

[yummyfajitas]

This is the Zero Marginal Product hypothesis. Assorted econobloggers have been engaging in quite a bit of discussion of it. For more info:

http://www.marginalrevolution.com/marginalrevolution/2011/01...

http://www.marginalrevolution.com/marginalrevolution/2010/07...

http://econlog.econlib.org/archives/2010/07/the_zmp_hypothe....

It's certainly consistent with the data. The data shows that corporate profit, GDP and industrial production have all recovered. This is exactly what you expect when a recession ends and aggregate demand recovers. However, employment did not recover, suggesting that the workers unable to find a job have a marginal product close to zero.

http://research.stlouisfed.org/fred2/series/GDP

http://research.stlouisfed.org/fred2/series/CP

http://research.stlouisfed.org/fred2/series/INDPRO

http://research.stlouisfed.org/fred2/series/CE16OV

[Alex3917]

Thanks, I'll read over these on the weekend.

[maurycy]

Alex, you might be interested in Lang, Siniver, 2011[1].

What is interesting in this particular study how quickly the market acquires the information.

So, if the unemployment is a global phenomenon across many different markets, in the same civilisation, it is possible that it changed somewhat permanently.

(just an idea; I'm not fully convinced as well)

[1]. http://papers.nber.org/papers/w16730

[Alex3917]

"Our results are therefore consistent with the view that employers use education information to screen workers but that the market acquires information fairly rapidly."

I'm potentially interested in reading this but I have to ask, are they measuring the acquisition of information by changes in employment status and salary? Because if so this seems like begging the question.

[maurycy]

Yes. It uses self-reported wages.

[prostoalex]

Agree. For a good portion of 20th century majority of such population has been able to find jobs in manufacturing or some sales role. While competition from Asia eroded the first sector, Internet slowly eliminates the middlemen in other sectors. Travel agencies and newspapers first, retail associates, car salesmen and real estate agents next.