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Pre-Recession Unemployment Rates May Not Be Reached for a Decade
WASHINGTON, DC - As recent calls for additional stimulus and the extension of unemployment benefits meet with stiff opposition, Congress appears to have underestimated the profound effect of the current recession on the labor market. A new report from the Center for Economic and Policy Research (CEPR) shows that with a job growth path comparable to the last recovery, the economy will not recover all of the jobs lost in the recession until March 2014. Assuming the trend rate of growth in the labor force, the unemployment rate will not fall back to the pre-recession level until April 2021.
"The economy desperately needs action on job creation," says John Schmitt, a senior economist at CEPR and a co-author of the report. "At current and projected job creation rates, we will still be suffering from the effects of the downturn well into the next presidential term."
The study, "The Urgent Need for Job Creation," compares various job growth scenarios with the job loss seen in the recession and projects when the lost jobs will be regained and when the unemployment rate will return to pre-recession levels in each case.
Considering more rapid periods of growth, the analysis shows that using the fastest period of growth of the 1990s expansion, the economy does not reach the December 2007 level until September 2012 and does not create enough new jobs to return to the pre-recession unemployment level until September 2014. If the even faster growth rates of the mid-1970s and early-1980s are applied, the economy returns to December 2007 employment levels in November 2011 and pre-recession unemployment rates by October of 2012.
Current CBO projections indicate that future job growth will fall somewhere between the rates of the two most recent expansions. This means that absent serious job creation policies, the economy will not reach pre-recession levels until well after the 2012 election cycle (June 2013), and not return to an unemployment rate near the pre-recession level until August of 2015.
The full analysis can be found here.
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62 Comments so far
Show AllI figure that we may NEVER reach pre recession employment rates, ever. How can we without a sea change in Washington politics, and I just don't see that happening. As the government is supposedly stimulating the economy, the private sector continues to offshore jobs, and cut wages that have not kept up with inflation for the last 20 years.
IMHO the best we can hope for, is that this is the new normal, and things will not continue to get worse. But I suspect the later is more likely.
Washington appears to be completely corrupted by money and very insulated from the results of their actions, and until those two things change I don't think there will be much improvement in the lives of average USA-n.
Right on, NC-Tom, with one correction: Wages in the US have not kept pace with inflation since 1973, nearly 40 YEARS !
The government is better than the corporations at cooking the books, so they will be sure to revise the way they calculate unemployment, thereby assuring that the unemployment rate is understated so they can say things are back to normal.
The US is not in a recession or depression...it is experiencing a paradigm change (ever accelerating wealth transfer from the 98% to the top 2%) designed by the corporations that own the US Government.
Workers do not make enough in wages to sustain this economy. The problem with this economy is structural, low wages and low demand. Therefore it seems reasonable to expect prices to drop until a new balance is achieved. Prices are not falling because businessmen are in denial. It seems that they would rather close their business rather than lower prices. That is strange behavior. Until the lack of demand is felt at the source, raw materials, then manufacturing, real estate commercial leases, etc; there will be no new normal. Wages cannot be cut further because that will only continue the downward spiral. This year we are likely to see real declines in prices other than in housing. It's a process that will take a while and is way overdue.
Unfortunately economists cannot see the forest for the trees. The media is cowardly and will not report the truth. The effects of propaganda do not work on people who are on the bottom or approaching it. The abuse of elite Washington cannot be sustained. Despite powerful economic control by the elite few, market forces will overpower them.
Henry Ford was smart enough to know that he had to pay his workers enough so they could afford to buy the cars he/they produced. This very simple concept has been lost by the miserable idiots that are currently running the economy...
Henry knew he had to depend mostly on the US economy to sell Fords.
Today's corporate masters view the US economy as one small corner of a global economy where electronic and paper swindles (euphemistically called innovative financial products that must not be regulated)have replaced traditional goods and services as the main profit centers. Ford and other auto makers profit more from auto loans than from selling autos.
Good pt. Yes, were in a downward spiral called deflation. The idiots on Wall st. and DC are worrying about inflation of all things while deflation in most things is powering ahead. Unfortunately, at the same time, anything that the Gov't is subsidizing like War material, Medical sector shit and other favored Industries is inflating. Wages for 90 % of the public have been stagnant for over 30 yrs. and now this growing structural defect is coming home to roost. It was already evident in the early 1990 recession , worse in the 2001 Recession and now it's here full blown. The only way out is for us to either create a new manufacturing base through tariffs, which the Int'l neo-libs and neo-cons will never allow or to kill off or push out millions of now useless workers and their families. The Conservs and Blue Dogs Dims don't care if these millions starve to death or leave. The same people rule Mexico and we see how they deal with their huge unemployment problem. Here though we have no where to go. This fact is setting the stage for something very ugly. People will NOT sit by and watch their families starve or will they?
Your right! We have no where to go. Only 18% of Americans have a passport, and most of them are the very rich, and people that live in other Countries part time. We used to be able to go to Canada, and Mexico ,but not anymore. 78% of all Americans are prisoners of this Country. Keeps them stuck and unable to learn about the rest of our planet, which should be everybodys right. They don't want people to see how it is posible to live a better life. Europe is not perfect but they are far more progressive than we are. Six wks. paid vacation,college, healthcare. drug rehab,instead of prison, anyways I do not want to defend Europe, I want to be proud of my Country and be able to live a decent life for the hard work we do.
The global corporations' mission is to apply the American fascist model everywhere on the face of the earth. Citizens of other nations need to push back harder beacuse the corporations have already made a lot of headway.
Its what Papa Bush called the new world order twenty years ago.
Two years ago when the gas prices were $4 and $5 the trucking companies said, they had to raise the prices ,so then the grocerie stores said they too had to raise prices, but when the gas went below $3 which it has been for two years now, none of the prices went back down. My electric bill has gone up about 200% in the last three years, we have nothing after we pay those theives. I asked the lady at AEP what a charge of $114 was for, and she said that it was to make more electrcity, so in other words I pay to make the product, and then I buy the product. I have never heard of such a practice where the customer pays for the cake mix, buys the eggs, and the oil, and the frosting, and then I bake the cake, (that part costs me $55) and then they sell it to me. That is what is going on here in AEP territory. Thats not business that is robbery. My whole bill was $347.00 my electric was $89 my taxes all together $67 and for me to make them electricity is $114+$55 this is so wrong ! Most companies buy the materials, and make the product, and then sell it,thats how it has always been done. This of course explains AEP's $28 billion dollar profit last year, can't wait to see how much they will make this year.
If you live in Florida, Georgia or the Carolinas, the extra money you pay on your electric bill is allegedly being used to fund future nuclear power plant construction.
Its great how these studies say crap like, "well if the good ole days come back around then just wait 10 years and you'll get your jobs back"
The good days are gone, everthings been outsourced to China...then China gets too expensive( or bad press) , then Chinese Jobs go to Vietnam( Foxconn moved there ipad factory to Vietnam, easier then addressing why workers were committing suicide )...And in time Vietnamese jobs will go to Bangladesh, and so on.
REPEAL NAFTA, Give us some EU style tariffs and keep those jobs in the USA .
Well, look on the bright side! Eventually, we'll be at the bottom and the jobs will come back to the United States because it is cheaper here than Vietnam.
Prosperity is just around the corner! For whom?
"REPEAL NAFTA, Give us some EU style tariffs and keep those jobs in the USA"
It would be a start!
NAFTA and the WTO have done more damage to the world economy than almost anything else.
Thats the ticket...we must repeal NAFTA , we must make American products again. Americans that want to take their business out of this country need to pay a very hefty price. You just can't be an American, and betray the American workers that made you getting rich possible in the first place. These Americans that screw us are public enemy number one. For those that want to defend capotalism and the freedom to do as you shoose, that would be great in a perfect world, but we do not live in a perfect world. Therefor as an American you need to do things with your business that promote a healthy America, or go live some fookin place else.Go live with the Vietnmese. Like those sports and movie star people, they make more money than God, and invest in very bad things, and pay very little tax. No place else in the world pays their entertainment people so much, we are loosing school teachers, police and firemen, our bridges are falling down, but we pay a guy that throws a ball $30,000.000.00 million dollars, not one guy is worth that. If he must be paid so much, then he should be heavely taxed. That money that the rich have been able to keep, because of the Bush tax cuts really belongs to us. We need it ,this money used to pay for a lot of things. Of course if we got out of those stupid young soldier killing, innocent civilian murdering wars, we would have allot more money too.
Good point made by Stone. Since I have taken a 20% mandatory pay cut in the last year, I take the position that, unless I really need something, the person selling had better be prepared to take 20% less than they want. Otherwise, no sale. No economy grows that way, but if I have to take less, you will take less, or take nothing!
With the upcoming cuts in social security, Medicare and with Obamacare increasing medical costs, most baby boomers will never retire from their family wage jobs, resulting in fewer job opportunities for young Americans. This factor alone will keep the unemployment rate high for at least the next 20 years
"Obamacare" (a term I disagree with) is a sellout to the greed of the insurance companies, and is NOTHING about health CARE.
Nah--we'll see lower unemployment as the overall labor force numbers get shrunken by the BLS, thus improving the unemployment rate regardless of the addition of new jobs. You can even do this yourself: Just remove 10 million people from the labor force and see the great economic recovery for yourself!
The true numbers are where the truth is. The numbers the government gives us are not accurate, because they don't account for the people who are no longer on the unemployment roles and are still looking for work, or for those who have taken lower paying jobs.
Yes, that will solve Obama's and the DC pols problem won't it? Unfortunately, though it won't solve the REAL problem out here for growing nos. as they fall out of the official rating system. I agree though the MS Corp. Media will help out by trumpeting the falling nos. even if they know other wise. A good example is what happened a few weeks ago as the off. rate dropped by .2% but in reality even more people lost their jobs. Didn't matter as long as more fell off the chart. As we go forward this phony way of rating the numbers will be maintained and used by pols, especially the Obama people to claim the crisis is over. For the millions still without work the real Depression will have begun in Ernest. DC will turn and look away. The media will essentially say, move on nothing to see here. America will start sprouting the tell -tale cardboard and tin shack towns of a 3rd world nation and the police and vigilante squads will begin their work of bum removal. The Gopers are already making it very clear that when they return to power this group will be permanently stigmatized as lazy and worthless, the dehumanization has already started. The neo-libs will provide meals occasionally and then turn away. This is our future.
To regain lots of jobs we would need a healthy (i.e. constantly growing) economy, which would require a constantly growing source of cheap energy. We had a long and decadent party with the cheap, easy energy and now all we have is increasingly scarce and expensive (mile deep?) energy...meaning, no growth(especially here in the U.S.), meaning slowly (we hope its slow) collapsing economy and fewer and fewer 'jobs'.
However, we all still need to eat, heat our homes in winter, and be clothed, so there will be more and more WORK to that needs to be done. Different, though, than taking your new car to the job and sitting doing something totally unrelated to meeting your basic needs and getting a paycheck to then PAY someone else to meet your basic needs.
Its a new world, folks, and the old, familiar economic and social structures are going to change dramatically.
Yup know what you are saying. Last Sunday I canned a bunch of homemade spaghetti sauce, that was made from tomatoes, peppers, onions, and basil that we grew in the back yard. Much more related to my basic needs than when I used to take care of computers for my former corporate masters.
Did you know that before Cornwallis was forced to surrender to George Washington, there was already a serious discussion in the British Parliament about ending the war with the Colonies because it was getting too expensive? That's because the tax rate on the rich was high, in order to pay for the war, and pressure was being brought by the wealthy to bring the war to an end.
Ending the wars in Iraq and Afghanistan is also an economic necessity.
To grow a healthy national economy, we need to have strong local economies. We have lost our manufacturing base in most locales and have become a nation of paper-pushers. There need to be consequences for companies that close down plants that are the primary employer of a local area, and send the jobs overseas. There are no consequences for this practice. They get to bring cheaper goods back into the country to try to sell to people who no longer have the income to buy them.
The day of low (state and federal) corporate tax rates needs to end, and the highest tax brackets need to start paying for the costs of two wars from which they are immensely profiting, instead of shoving those costs off onto the grandchildren and great-grandchildren of what's left of the Middle Class. (It's shrinking every day.)
Several years ago I went to a public comment session on the budget at the Oregon Legislature in Salem. After an evening of some very strange ideas, I was one of the last to comment, and I told them that, since Federal money to states was being reduced because of Bush's tax cuts, we needed a graduated tax increase to recover some of what George Bush's tax cuts for the rich took out of the economy. They apparently listened to me, and put in a graduated increase that didn't raise most people's taxes more than a few dollars a year, but greatly increased the taxes on the highest income levels.
Well, the rich people got the increase put on a referendum and did a lot of advertising to convince people that the taxes were going to really hurt them, and the majority of voters cast a no vote. There were a lot of jobs cut state wide, especially in education and social services.
Last year, the legislature put through a tax increase that is _only_ on individuals who make $125,000 or more, and families with a $250,000 or higher income. They also put through a _very_small_ increase in the corporate minimum tax, formerly $10 a year (established in 1938) and now $225 a year. The rich put a lot of money into an advertising campaign to scare people into voting against it ... trying to convince us that it was going to cost jobs and that the individual increase was going to result in all of us gong broke ... but the voters saw through the lies this time, and voted both increases in. Not one corporation has gone out of business because of the tax increase, and not one has left the state. (We still have one of the lowest state corporate tax rates in the country.) But what the increase did was save a lot of teaching jobs and other public service jobs that the state would have been forced to cut. The individual tax law also gave a big tax cut to anyone who had been unemployed during the year.
It is a statistical fact that when the highest income levels are paying high tax rates, there is more money in circulation and there are more jobs, because government can create jobs (both government and private contract) and many support jobs are created in the private sector. Reagan's "trickle-down stupidity" _never_ worked.)
The austerity idea that is currently being kicked around will only increase the recession/depression (whichever you think we're in now). Only an increase in taxes on the rich and in increase in government created jobs will get us out of this.
It worked in the 1930s. We need to go with the experience, and tell the Republicans to shove austerity up their asses.
"Congress appears to have underestimated the profound effect of the current recession on the labor market"
The Gods are laughing on Mt. Olympus! This Congress hasn't considered the labor market and jobs. Nor has this President. They have been too busy making "historical" achievements to worry about the country or its citizens future.
Without restoration of realistic trade and tariff policies, restoration of reasonable tax policies and the return of laws and protections that were removed, unemployment will increase.
The current stock level of Wall Street is purely based upon short term speculation. There is no other basis for it. Except for the stock index, every other indicator shows us headed ever deeper into a depression.
My father said to me _many_ years ago, that most people in the stock market are only interested in the current moment. They have no memory of yesterday, and are not yet thinking about tomorrow.
Prolonged low interest rates combined with an unregulated financial industry are what has driven the stock market up during the past year.
Obamabankster bill token regulations will result in higher bank fees and even lower interest rates on savings accounts and CDs, thereby pushing more money into the stock market and driving stock prices even higher. This will make the next crash will be even more severe and the next series of bank bailouts will cost US taxpayers even more money.
Was it Krugman who, in the past couple of weeks, speculated that the market will drop drastically within the next few years ... maybe as low as 1000? I can't remember where I read that.
If it was Krugman, start buying stocks, its been a while since he proved right.
"Historical achievements", wrought with corporate sellouts, that have not even taken us back to pre-Bush levels.
For all the pro-corporate things Clinton did, he at least reversed some of the Reagan era tax cuts for the rich. Actually, _Reagan_ reversed some of his own early tax cuts. Bush didn't have the brains to see what a mess they were making of the country, and left it for Obama to try to fix ... with NO help from the Republicans who caused the mess.
Quite true! But thats the brainless leaving a fix to the brainless. Obama hasn'ty wasted a moment trying to fix our economy or restore the faults/mistakes/changes that could begin to generate jobs.
If old Bill hadn't signed the bill removing Glass Stegall and the one passing NAFTA, he could have been a great President and we wouldn't be where we are today.
Will we never get a President that cares about the American worker and his family again?
There's only been one candidate who fits that description over the last two election cycles, and Dennis Kucinich and his _practical_* ideas, have been completely marginalized by the Big Media ... because they know that if he gets in office, their gig is up. He _will_not_ stand for corporate controlled media.
Dennis has not forgotten where he came from and how hard he has worked to get to where he is.
*He is NOT the radical that the media makes him out to be.
Dennis radical? Thats a laugh!!
Unfortunately of course he has less chance than Rush Limbaugh.
As long and DK remains with the democratic party he will play the same game, and do more harm then good. I may start listening to him again if/when he kicks his corrupt party to the wind. Ditto for Michael Moore.
"Will we never get a President that cares about the American worker and his family again?"
NO!
The fact is, Republican'ts couldn't care less about "the profound effect of the current recession [that they caused] on the labor market". They are the "Party of No" and the "Party of No Ideas", because _all_ they care about is "winning" back control. They have been critical of everything Obama is behind ... even when it was _their_ idea in the first place. As soon as Obama gets behind one of their ideas (many of which I find myself opposing), they oppose it. It happened throughout the debates over the health INSURANCE bill, when Obama was trying to find some middle ground to get some Rep-ugly-can't support.
ANYONE who is foolish enough to vote for a Regressive Republican, who is working _against_ the best interests of the people and the nation, deserves what they end up with ... but the rest of us don't.
So it will take about 10 years for the jobs offshored to come back here for cheap labor.
Sounds about right.
I recently read that to equal the buying power of the minimum wage of 1968 ($1.60 an hour) we need to raise the current rate to $10 (and prices have continued to go up since that article). Doing a little math, the $12.50 an hour I made in my last job is equal to the $2.00 I was making in early 1969. That means I have not had a raise in 40 years, and people who are paid less than $10 an hour don't have the _minimum_ buying power they had in 1968.
I worked with a guy in 1968-9 who was supporting a family of five on $2.00 an hour. Could someone manage that on $12.50 an hour today? I don't think so.
That's why I'm still unemployed after more than a year ... because I won't settle for $10 an hour jobs. I'm worth more than that.
To change your own situation and that of others use the term " living wage " instead of minimum wage. Framing is very important. The living wage varies somewhat but $12/hr plus bennies is about right anywhere you live. That should be a starting point. I know people who say ya' can't live on less than $16/hr in California, for instance. Experience is always worth something.
Even with as much as the cost of housing has dropped?
"Minimum wage" is what the government uses. Living wage varies, depending on where you're trying to live.
The cost of homes has gone down but that has created rental increases. As people lost their homes they had to move somewhere. The Aussies have a $15/hr minimum wage, I understand. Ask someone making $22-23/hr if they could live on $14/hr and most would say, " Hell no ". Surviving is different than living and $14/hr is only 30K a year. Not much really when you think about it.
I think that "10 years" is being optimistic. Those national labor cycles implied by your comment do exist, but they are over longer periods than just 10 years - try 50. Also, oil may have peaked in 2008 and the effects of peak oil will begin to bite in a decade, and it will end the prospects of further economic growth. I think we have had our "golden age" and it is all downhill from here.
All the crap we hear about how the number of jobs is increasing, doesn't take into account the fact that the number of jobs added each month is less than the number of people entering the workforce each month. There are more jobs being added than during the Bush years, but not nearly enough to keep up ... and most of those additions to the workforce, who have never worked or have not worked for several years, are NOT included in the unrealistic unemployment rate.
Jobs are being added? Oh, really??!? Since when?
That's what "they" claim. Bush was _always_ telling us how many jobs had been added, but it was never enough to keep up with population growth.
They do not care if we ever get a job, Mitch McConnell just wants to make sure he gets his money, he lives like a King ! Have you all noticed they all think the are Roalty, since when does America cater to the Royals ? These men, and women all need to be knocked down a few notches.They need to show how much they get paid with tax payers money, each year, and if their is a dime more, or a boat that they could not afford, it needs to be seized and sold for the local town, and put into revenue. Also finnal word we must arrest everyone that commits a crime and if convited they loose all their benifits, All their benifits.Elected public officials WORK for US that's it... we must go into our local Senators office and our Congressmens office and look into their financial records, and remind them who they work for. Lobbing is illigall, when that is gone, we will see big changes. Cut out ALL lobbing period. We the PEOPLE run this country, but lately we let these theives and liars take us over....Stop them go into their offices which belong to you, and demand your rights. Scare them not with violence but with knowledge !
"Scare them not with violence but with knowledge !"
Yeah, that'll really scare 'em.
They don't care what you or I think, and there's nothing anyone can do about it except physically remove them from Washington, and people don't have the courage to do that. So, you'd better get used to the situation.
If we had a military that gave a damn about the constitution and their fellow citizens, they encircle capital hill and arrest them all, but they're too busy invading & fucking up the world and building their little violent, fear-mongering state here at home so they too are pretty useless.
As for Mitch McConnell, he doesn't matter. He's just one of the thousands of busy-body piss-ants (republicans and democrats) that serves in our federal government.
So, forget about all those things that 'could' be done, and be a good little obedient soul--go buy some shit down at the mall or on main street then watch some TV.
What seems long ago I resided in L.A. Walk and drive around thinking how beautiful the area was just 500 t0 1000 years ago for the Tribes.
Price of a home, 0. Food, 0. Clothes, 0. Taxes, 0. Destruction to the earth as close to 0 as possible.
You have achieved!
Life is good. What an experience! It's always best to forgive.
First of all, it has become obvious that there isn't going to be much job growth to speak of for the foreseeable future. There will be little or no job growth for at least the next five years. One sarcastic thing you can say about the job market from 2008 through at least 2015 is that many Americans’ cavalier attitude toward the labor market in general and their (admittedly due to brainwashing) insistence on blaming the unemployed for their unemployment in particular have come home to roost big time. (“If you weren’t such a loser you would have been that one out of the 10 applicants who got the job; the fact that the one who got the job dates the owners' daughter means nothing.” Laugh out loud.)
The middle class is being dismantled through foreclosure on their homes and via the denial of previously granted credit to small businesses. Small business was where almost all of the "miraculous" job growth in the States used to come from, but no longer.
Second, why can't one of these think tanks do something truly useful, like for example tell us what will happen in the next decade when tens of millions conclude they are never ever ever going to get a job again (except perhaps at a fast food joint or a Wal-Mart)? What are these people going to do? Are they going to riot? If they do riot will they be put into "Fema camps" as Alex Jones contends? Instead of rioting, will the jobless/homeless quietly set up tents at their nearest Obama Ville Camp for the Homeless and Destitute and call it a life? If instead they get stuffed into the bursting at the seems prisons, are some violent criminals going to be released to make budgetary and physical space for the jobless and homeless hordes? Are these people just supposed to disappear into thin air?
Inquiring minds want to know.
Can Congress become any more blind about the fact that there aren't that many jobs around? Ha! Maybe they need to have the experience.
OH YES MEN, you funny and enlightening guys, I have an assignment for you! This could be fun.
Go to each Congress person's website and take the bio to create a fictious person with that information. Then, create a resume and send it out to see if they, with those skills and whatever age they are,could actually get an interview!
I don't think this would be illegal, because you would not be saying that you were them, although I suppose that potential employers would complain, but do you really think that those employers are reading all of those resumes anyway?
Of course, we do know that this is a fun fiction, because those Congress persons that lost an election, would just become lobbyists anyway!
It might be fun to see if they have any skills which would sell in this economy.