Tuesday, November 09, 2010

Blame it on the Internet

Will historians look back on the Great Recession and explain its depth and length by pointing to the Internet revolution? Two indicators suggest this may be the case.

One, the widespread adoption of the Internet has coincided with the recession. According to the Pew Internet and American Life Project, the percentage of households that use the Internet climbed from 42 percent in 2000 to 79 percent in 2010. In other words, only during the past few years has the average household had access to the Internet, and Internet access changes the rules of the game. When rules change, economic turmoil results as everyone scrambles to understand the game.

Two, never before have we had so many long-term unemployed, according to the Bureau of Labor Statistics. Among the unemployed, people aged 55 or older are most likely to have been without a job for a year or more—a stunning 41 percent. Is the labor force ridding itself of the generation of workers who were most reluctant to go online?

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