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Global Demand Dearth Costs $1.2 Trillion In Lost Wages, $3.7 Trillion In Gdp

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Recently we’ve seen quite a bit of evidence to support the notion that global demand has never recovered from the 2008 crisis and further, that central banks’ collective efforts to create demand via ‘the wealth effect’ and other similarly elusive concepts have failed. This is apparent virtually everywhere you look, from depressed global trade, to a sharply decelerating China, to flatlining US economic output, to a worldwide deflationary supply glut.

Needless to say, lackluster global demand has a negative impact on employment opportunities. Employment is of course an important factor in explaining economic growth. When jobs are being created at a healthy clip, there is a multiplicative effect on the borader economy as more jobs equals more spending which in turn boosts profits and drives investment in a virutous economic circle. Of course when the jobs gap grows, this circle reverses itself and becomes a self-feeding downward spiral. By studying the global jobs gap and comparing pre-crisis conditions to post-crisis conditions, The International Labor Organization has been able to quantify the economic impact of subpar global demand and it is astonishing.

Here's more from the new ILO study:

Nearly eight years have passed since the first signs of crisis emerged in the global economy. Despite encouraging signs of recovery in 2010–11, the more recent period has seen global unemployment march higher, to an estimated 201 million in 2014…

At the global level, employment growth has stalled at a rate of around 1.4 per cent per year since 2011. This compares favourably with the crisis period (2008–10) when employment growth averaged just 0.9 per cent, but remains significantly below the 1.7 per cent annual rate achieved between 2000 and 2007…

The global jobs gap, which the ILO estimated by comparing pre-crisis trends in employment-to-population ratios (accounting for demographic change) with actual, observed trends since the onset of the crisis, stood at 61 million in 2014. That is, there were 61 million fewer people in employment globally in 2014 than there would have been had pre-crisis employment growth trends continued…

If only everything stayed on trend...

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The problem is that TBTB think that all this macro economic voodoo actually matters when it doesnt - all that matters is how efficiently people can make stuff people want and how easily they can engage in trade.

Edited by goldbug9999

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