Why aren’t more people being hired?... It looks increasingly likely that America’s labour market has developed structural problems that may explain why it is struggling to respond... certain industries, such as manufacturing and construction... geographic factors. Ten percentage points separate the states with the highest and lowest unemployment rates. But the property crash is making it much harder for Americans to move to where the jobs are. A quarter of mortgage borrowers owe more than their houses are worth. Many people are stuck in places with poor employment prospects, unable to leave for cities where their skills may be in demand. Although the economy is starting to create new and often highly remunerative jobs, they are out of reach to those who cannot move....
Now I'm really confused.
Economist Brad DeLong has argued vociferously that what we need is an increase in demand through government spending in order to offset unemployment related to the recession. Unemployment related to an economic downturn is cyclical unemployment and should diminish as economic activity increases.
In the passage above though, DeLong quotes (approvingly?) Ryan Avent who raises the specter of structural unemployment. Structural unemployment is not related the downturn itself, but to broader changes in the economy that mean some jobs are never coming back.
Often, citing structural factors as part of the cause for the recent downturn and continued high unemployment gets one labeled an Austrian (used as an epithet) or of being the heirs of Mellon (liquidate everything!). Certainly DeLong doesn't belong in either of these categories.
Either way, I agree there are structural factors at work in our continued economic problems and they are made ever more painful by the housing crash, which reduces mobility, traditionally a source of strength for the American economy.
As for DeLong's position, as I said, I'm confused. Maybe Strupp can explain it to me.