In a column by Bill Dunkleberg, Philly reports the Board of Governors of the Federal Reserve met with the Federal Reserve of Atlanta and the Kauffman Foundation to discuss employment. They determined while the gross domestic product (GDP) is the same as 2007, the reason unemployment is so high is because the composition of the GDP has changed. Manufacturing and agricultural products now require fewer workers to make the same amount of goods, which accounts for the loss of seven million jobs. However, we are producing a million fewer new housing units annually. Building a housing unit, much more labor intensive than manufacturing or agricultural work, requires an average of five persons for a year, directly and indirectly, which amounts to five million of those seven million jobs lost. In 2006, which was the peak year for housing starts, net job creation was 600,000. In 2009, net job loss because of the recession was 300,000. Some suggested the government provide funding for venture capital because that creates new jobs. Others suggested a tax cut was in order to stimulate the economy. Dunkleberg noted everyone agreed that current policies are not effective, and hopes Congress can get something done.
(Graphic image: Wikipedia/Federal Reserve)