Now I'd like to expand. Seems to me that there are several reasons to believe that the conventional economist wisdom is now, or soon will be no longer applicable. My analysis:
Are a few years of recession really sufficient reason to begin to believe that human labor has become – and will indefinitely remain – unprecedentedly inflexible? Are we to think that entrepreneurs have finally exhausted their capacity to creatively figure out ways to profitably employ the vast majority of adult human beings willing to work?
1. Activities wherein low-skilled workers can add value likely suffer from Cowen's low-hanging fruit problem. The easy things to find that low-skill workers can do have been found. And...we're using most of the capacity of those workers for available wages now. It may be that the number of people with zero skill that can be paid $20/hr ($10 wages, and $10 regulatory costs) is approaching saturation, given current realities. While the value of a worker keeps increasing, the time it takes for a low-/no- skill worker to move from $20/hr value to $21/hr value may be far higher than the time it took for the worker to move from $19/hr value to $20/hr value.
2. Innovation is costly. It may be that the risk of creating new categories of jobs in a bad economy is too high to even try the new paths, but that one the economy recovers, the risk inherent in building new types of jobs decreases sufficiently that new categories of work for low-skill workers will be created.
3. Regulatory cost is monotonically increasing. It could be that the costs of regulation are increasing faster than the value of low-skill workers is increasing. The functions could well have crossed in the last 5 years.
4. Up until 50 years ago, there were NO substitute goods for labor. Just recently, with the advent of the computer, instant global communication and global supply chains...the number of substitute goods for labor has increased drastically. It may be that for now, there is a glut of surplus labor-substitutes, that are MUCH cheaper than labor, and no one has found the $20 cases where local labor is semi-required yet.
5. Same scenario as #4...but labor is infinitely (or near-) substitutable. Effectively, computers/robots can now (or soon) do EVERYTHING a low-skill worker used to be able to do. The infinite supply of new jobs is contingent on there being NO substitutes for labor. Now that there are substitutes for labor, we should no longer expect an infinite use for labor, any more than we should expect an infinite use for whale oil (or an infinite use for petroleum, after the solar price point in ~2030).
6. Of course, the real choice is some combination of factors 1-5. I'd bet that suspending a pile of laws (Health care laws, Minimum wage laws, welfare laws, sue-the-boss laws) could decrease the cost of employing a zero skill worker from $20/hr down to $5/hr. I'd bet that a good economy, and decreased licensing/patent regulation could increase the cost/benefit/risk ratio around trying new approaches. Certainly banning computers/robots, immigration, and/or foreign trade could make the employability of many folks increase...of course the cure costs more than the disease in all 3 cases, so that sucks.
7. We should expect that #6, especially computer/robot #6 wins massively over time...and so even if today, there's no ZMP, we have no reason to believe that the future holds no ZMP...indeed, we have reason to suspect that ALL of us become ZMP workers sometime in the next 50-200 years...roughly as soon as desktop computers cross our particular IQ/EQ threshold.
8. This shouldn't worry us as much as it might, because one of the major defining limiters on wealth is that unlike most other natural resources, energy is presently expensive. On the other hand, as suggested before...inside of roughly 20 years (depending other factors), we expect that solar crosses the petroleum price point...and within another 20 years, energy in general starts costing what light costs us today...almost nothing. Free energy is probably as big of a difference as the other 4 big singularity-builders: AI/Cyborgization/Nanotech/Genetic Engineering.