How fare the US, USSR?; US -- jobs next year may be scarce despite prospects for a solid upturn
The US economy is expected to expand by the end of 1983. Yet unemployment is expected to remain high, or even grow.
A contradiction? Not necessarily, say top economists. The worrisome unemployment rate next year reflects, at least partly, the rapid increase of the US labor force. Over the past decade a flood of newcomers - primarily young people and second wage earners - has entered the market looking for work.
''We now think,'' says Edward Yardeni, chief economist of Prudential-Bache Securities, ''that there is a significant likelihood that the unemployment rate will continue to rise during most of next year.''
Economists at the Morgan Guaranty Trust Company foresee the jobless rate piercing ''the 11 percent mark soon and (remaining) above that level throughout 1983,'' even though ''economic activity in next year's second half will be fairly strong.''
''Over the past 12 months,'' Dr. Yardeni said in a telephone interview, ''the labor force grew by 1.7 million people despite the deep recession.''
In November 1982 alone, he said, the number of job seekers swelled by 375,000 . ''Most of them went straight into the unemployment lines,'' accounting for the bulk of the rise in the jobless rate from 10.4 percent in October to 10.8 percent last month.
These figures, Yardeni notes, do not include ''discouraged workers'' - Americans who have stopped looking for work and are not classified as unemployed.
Compared with Japan and Western Europe, the US economy has done remarkably well at creating new jobs to absorb the post-World War II baby boom. Well over 20 million new jobs have been created since 1973.
Both Ronald Reagan and Jimmy Carter, trying to accent the positive, have stressed the fact that total employment in the United States continues to grow. President Reagan speaks of the ''9 out of 10 of us'' who have jobs.
He is right. The US has one of the highest employment-population rates - people over 16 who hold jobs - in the industrial world, outstripping Canada, France, Britain, and West Germany among others.
In November 1976, for example, 88.3 million Americans were at work, excluding the armed forces. By April 1980, according to the Labor Department, the number of job holders had climbed to 97.2 million. By November 1981 the total topped 100 million.
Currently, because of the deep recession, this key number has dropped to about 99 million - still roughly 9 out of 10 of all Americans in the working-age population.
''At some point in this decade,'' Yardeni says, ''the labor force will begin to grow more slowly'' because the US birthrate dropped sharply after the postwar baby boom had run its course.
But he sees no reason that this slower growth rate should manifest itself next year. Indeed, the number of Americans looking for work in 1983 could be higher than the 1.7 million increase that occurred over the past 12 months.
Assuming that economic recovery begins next year, many discouraged workers - those who have dropped off the official roles - are likely to register again at employment offices.
Their numbers, coupled with the natural growth of the labor force, would produce more job seekers than the economy could absorb, even in a period of modest growth.
The same problem, in greater or lesser degree, troubles leaders of Canada and Western Europe. World trade is shrinking, which hurts other industrial powers more than it does the United States, because their economies are more dependent on exports.
By 1984, according to the latest survey by the Organization for Economic Cooperation and Development, 35 million people may be jobless in the 24 OECD countries, up from the 32 million expected to be unemployed next year.
Two other factors tend to foster continuing high unemployment in the United States:
* One is the ''massive structural attempt'' by many industries to cut costs, says Dr. Yardeni, by letting people go and getting more work out of a reduced labor force. This benefits the economy as a whole by boosting productivity - or put another way, by reducing unit labor costs. But a lot of people are left jobless until expansion is strong enough to compel employers to rehire.
* Certain basic industries - autos, steel, and textiles are prime examples - must modernize to survive. The result will be leaner industries, with more automation and fewer workers on the line. This process will leave a pool of highly skilled unemployed people, whose talents will have to be directed to other endeavors, centered on high technology.
Of course, employment could be boosted by stimulating the economy through government spending or a surge of fresh money from the Federal Reserve. But this would reignite inflation - or at least inflationary expectations - which would keep interest rates high.