Thanks to ifitme for those data. Against that background I need to say that the technological advances I'm talking about (the ability to automate service jobs) only began in the 1980s in embryo. That's when the personal computer was invented and put on the market. The development of computer networks, and finally the internet, accelerated the process through the 1990s and into the 21st century. At this point, the main advances relevant to what's going on are in software.
As ifitzme's data shows, expansion of the work force (on the supply side of the equation) can be absorbed; despite the increase in percentage of the population in the work force, full employment was maintained. Contraction on the demand side is another matter. That's what we're facing today, but we've only faced it on any significant scale in the last decade or two.
EDIT: The reason why expansion of the work force can be absorbed is because every worker is also a potential consumer, expanding the demand for goods and services; as long as the need for work to produce goods and services persists, the supply of paid labor creates its own demand -- which is the only situation in which Say's law actually holds true.
Your welcome.
BTW, the SOL and efficiency are just proxy measures, if you will. They are reasonable in gauging some rate of change between years.
The data doesn't prove or disprove any of your fundamental concepts, it just puts them into context.
The reality is that there is a general over supply of labor. And with each efficiency increase, that over supply continues. There is obviously an over supply right now.
The process of growth has been for a new growth technology or method to be realized. More investment, then will be needed in the long run, is poured into it. Excess labor is absorbed. When the excess demand for the new growth opportunity has been satisfied, growth begins to decline. The majority of the new start-ups are shed from the economy, leaving only the few market leaders to meet the new demand of a growing populace. Labor is once again shed and unemployment rises.
While it is true that in the long run, all resources are utilized, it seems that the medium run is the period of time from the trough to peak. When the medium run has been reached, the economy contracts again. The long run is never reached because the economy never reaches a steady state condition. It never reaches a steady state growth condition.
The medium run has all the essential appearance of the long run, in that all resources are being utilized. Unfortunately, in it's underlying structure, it is not the same. And it is common for complex systems to present the same external effect for different internal causes.
An interesting issue arises in that early gains are compounded. Early resources beget a greater amount of later resources that insulate those with more from the effects of the recession. Large conglomerates are less sensitive to the recession then small businesses. Not for any inherent capability but for purely external factors.
This same process occurs with the varying income levels. And it is most apparent when looking at the rate of change of incomes.
Take the income quartiles, calculate and plot the rate of change over time.
When the economy is on the upswing, the upper 5% see greater gains then the middle income level. When the economy is on the down swing, the middle income sees greater losses then the upper 5%. It has to do with leverage.
Large businesses gain more from efficiency then smaller businesses. B of A is the big winner of POS, not the shop keeper down the street. Whatever gains the shopkeeper realizes, by not having to walk to the bank each evening, he loses in the transaction fees.
Unskilled labor, lacking the resources and opportunity to become skilled, and in competition with each other, will forgo health care and retirement savings out of desperation for an opportunity to just get the job.
Of all that growth in the labor force, full employment is only from the time it surpasses the last local maximum, until it reaches a new maximum. All the other times, it's not full employment.
There are sub-economies, within the larger aggregate, that are significantly different. There is something structurally wrong with the system as it plays out over the decades. This is just as apparent in the volatility of the employment to population ratio as it plays out against a background of constant growth.
Unpredictable changes do no one any good as a large percentage of gains in growth are lost again in a two steps forward and one step back process.
