Actually, it’s pretty simple.

Things should remain within historical trends unless there’s a good reason for them to deviate.

Thus, unless something *big* has changed, all employment shocks would be cyclical, and return to historical trends.

Arguably, the very existence of the internet and cheap communications might be enough of a reason for them to deviate, as the “proximity” value of labor has diminished significantly. This makes it easier to substitute cheaper labor overseas in jobs where it wasn’t possible to do so in the past.

Another potential reason for structural changes, of course, is government getting in the way of labor, making it more expensive. High taxes, onerous regulations, and the need to fund a welfare state artificially raise the cost of labor in the US, making it more likely that jobs will be outsourced — i.e. a structural change to employment.

I’m somewhat confused by your second question (I realize my wording is unclear in my last sentence). Essentially my position is that government should try not to cause structural impediments to work. I’d say that it’s probably a foregone conclusion, though, as America seems to be racing to vote its way to Euro-style Democratic Socialism. I’m implying that this path is a bad one, but that we’re probably going to tread it anyway.

Also, when you speak of our “employment situation should be a structural change” are you implying that central planning of employment is the only path to stay on, or a forgone conclusion, or both, or neither?

Your point is well taken.

My personal belief is that what should be a cyclical downturn is becoming more and more structural every time government creates disincentives to work (taxes, regulations, welfare state benefits). The healthcare bill ratchets us another step down that road.

I don’t think our employment situation needs to be a structural change, but if we keep emulating Europe, it will do so.