One of the primary functions of a mass transit system is that it helps people—especially lower income people—get to work. So one of the worst consequences of the recession has been steep cutbacks in bus service in many cities, cutbacks that not only have an adverse direct impact on the local economy but actually make it more difficult for workers to get jobs or for firms to create them. Here's a story out of Pittsburgh where Bill Griffin was looking at adding 150 call center positions and then decided not to after looking at the new bus situation.
Put this down as another example of what hysteresis looks like. The process by which cyclical unemployment turns "structural" is not some mythical transformation. A lot of the jobs that people have are jobs facilitating other people doing their jobs. A brief spasm of unemployment, even if it's intense, can be quickly reversed. But the longer the economy operates at a low-tilt, the more the infrastructure of work melts away and the harder it is to recover. Right now it sounds like Pittsburgh could just go back to spending more on bus drivers and bring the service back. But in a few years' time, some of the buses will have deteriorated to a point of un-usability and it'll be that much harder to cycle back to a high level of employment.
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