This Recession

Reader comment on: Eurosclerosis Comes To America

Submitted by J.Johnson (United States), Aug 5, 2010 12:16

Mulligan's choice of words referring to unemployment in terms of people who have not yet ACCEPTED a new job is interesting, considering that, for many people, there are few jobs available for them to accept, especially people who depended on the market for new homes for their living. New home starts have dropped from roughly 2 million per year down to 500,000 per year, a net loss of around 1,500,000. Assuming that roughly half of the $200,000 price tag for the average new home went to pay salaries of the people who were directly and indirectly involved in its construction, then $100,000 per home multiplied by 1,500,000 fewer homes amounts to a drop of $150 Billion. Dividing this amount by an average household income of $50,000 gives a loss equivalent to at least 3 million jobs and it is difficult to imagine these people now flipping hamburgers or taking other forms of far less skilled work.


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