In a depressing new report, two Rutgers professors predict that it will take more than seven years to restore the health of the nation's labor market to pre-recession levels.
The report, released on Wednesday, says that even if the nation adds more than two million jobs annually over the next seven years, that will barely offset what the authors see as a giant employment deficit.
The large employment deficit, the report says, was created by the loss of 7.1 million private-sector jobs since the recession began in December 2007 and by the economy's failure to keep up with labor-force growth — that is, the increasing number of people who want jobs — during the recession.
"America faces a troubling arithmetic of employment recovery because of the extreme depth of the employment deficit it now faces," the report says. "It may take the nation until the second half of the next decade to return to the pre-recession labor market conditions of 2007. Such a long road back is likely to be necessary if the nation is able to achieve above-average annual employment growth for a sustained period of time."
The report, "America's New Post-Recession Employment Arithmetic," was written by James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, and by Joseph J. Seneca, university professor and an economist at the Bloustein School.
The report gives a failing grade to job growth over the past decade, calling it "The Lost Employment Decade." Noting that there are 1.256 million fewer private-sector jobs than in December 1999, it said the nation was "destined to exit the decade with fewer jobs than when it began."
Dean Hughes and Professor Seneca contrasted this decade with the 1990s, when the number of private-sector jobs climbed by 19.2 million, and with the 1980s, when the nation added 16.2 million private-sector jobs.
To return to the labor market conditions of 2007, the report said the nation would not only need to offset the 1.3 million annual increase in the labor force, but would also need to compensate for the job losses suffered during the recession. Given conservative estimates of further declines in employment, the Rutgers professors see an overall employment deficit of 9.4 million private-sector jobs by December 2009.
"Erasing this deficit will require substantial and sustained employment growth,” the report said. Even with an optimistic picture for job growth, the report said, it will take years before the nation returns to pre-recession labor market conditions.
The report notes that the economic expansion from November 2001 to December 2007 added 6.2 private-sector jobs, or 1.0 million a year. It compared that with the creation of 21.5 million private-sector jobs during the expansion from March 1991 to March 2001, coming to 2.15 million a year, and the addition of 18.4 million private-sector jobs during the economic expansion from November 1982 to July 1990, amounting to 2.4 million jobs per year.
“Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010,” the report said, “it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit!”
This, the authors noted, might be optimistic. Those hoped-for 7.63 years of consecutive job growth would be about 50 percent longer than the average length — 58 months — of every economic expansion since World War II.
The latest job stats are not encouraging, but for those looking for employment during these troubled times, research is key to landing the right job. Many publications show different categories for the best companies to work for. Also, another worthwhile site is SalaryFor.com http://www.salaryfor.com/ which has a huge database of actual salaries that companies are paying for different positions as well as career advice and job listings.
2017?……I am hungry now. Should we go into hypersleep or hibernation until then waking up with Rip-Van Winkle foot long beards(and that’s just the women). All the more effort to have the National Academy of Sciences working on a time machine or worm hole to a less bleak future. I remember when we were supposed to dread 1984 then the Year YK2. Those years turned out to be pretty good ones. Got to remember the next time I am in the library to read more Nostradamus. I predict we will all have beards like him.
MAKE YOUR DESTINY TODAY.
WEBMEISTER< SORRY MIS QUOTE>> THIS IS BETTER> THNX
Prediction is very difficult, especially about the future. "“Yogi Berra
I don’t see the effect of 50+ million baby boomers retiring over the next 10-12 years being factored into available jobs.
And just HOW can this possibly be considered a RECOVERY?
No jobs, no recovery. This is the mother of all “lagging indicators”.
Besides filling (some of) the jobs that the aforementioned boomers retire from (maybe…), where will new jobs come from if we continue to outsource, offshore, and make workers more “productive”?
“I don't see the effect of 50+ million baby boomers retiring over the next 10-12 years being factored into available jobs.”
Retire? Who can afford to retire?
Given what’s happened to our retirement funds, a lot of us 50+ million baby boomers may not have the money to retire until well after 2017!
@harryo
But is it really clear that so many baby boomers will be able to retire in the next 10 to 12 years?
On the bright side, we are only short 7 or 8 million jobs and we probably sent 50 million jobs to China. So all we need to do is to bring those jobs back.
Harryo, the article has this sentence:
“To return to the labor market conditions of 2007, the report said the nation would not only need to offset the 1.3 million annual increase in the labor force, but would also need to compensate for the job losses suffered during the recession.”
The “1.3 million annual increase” is presumably net, the difference between those entering and those retiring from the work force (and probably those giving up and dropping out of the work force). How fine the profs sharpened their pencils in coming up with the net figure, we don’t know. That is, we don’t know what assumptions they made about how many baby boomers will still retire on schedule, despite the setbacks to their retirement funds. The other side of the equation — number entering the work force — is easy to compute, because it’s demographically driven as young people mature.
Congratulations to Wall Street. High unemployment creates cheap employment which usually buoys the stock market. It means more productivity. Besides, Wall Street can invest its money overseas and continue its prosperity. Why worry about domestic employment? And Wall Streeters can build gated communities to live in (besides the real estate prices that give them a private enclave in the first place).
And congratulations to our legislators. Eliminating the oublic option is bound to bring them more corporate campaign contributions, which will be legal, of course, and they will be able to remain in power and enjoy its perks.
Its a happy day in Washington and New York.
This can’t be right…
Ben Bernanke says the recession is over…
Dear Mr. President,
Can we get those Wall Street bonuses back into the Treasury? I think we are going to aavve a better use for the money…
and this less-than-rosy scenario is premised on the less-than-valid fact that we are “on the way out of the recession.” actually, we have seen the benifits of two programs - cash for clunkers and the first time home buyers program - bouy the economy a bit.
these are almost over now and there the auto industry is back in the doldrums and there are thousands of houses that banks are sitting on and not selling because they don’t want to admit the debt on their books. the activity you see in the market has no fundamantal basis other than a bit more gambling activity at the crap tables of wall street. no - this recession is not over and could bounce along a rough and painfull bottom for months to come.
so - put the kool-aid down and back away from the table.
A student with an engineering degree in China is offered around $7000 their first year. In India its around $14,000. In the US its around $50,000. Forget about people working behind a sewing machine, there is a huge wage gap up and down the employment line. Theres really no reason to do anything here, when you can do it for much less over there. Its really just that simple.
Of course its tough to be an owner over there with the gov, lack of transparency, archaic accounting and banking rules etc.. Thats why it’s nice to own it here, live here, but do the work itslelf over there.
Which pretty much looks like the US economy during the Great Depression. Remember that the economy then recovered long before the job market got better.
And this happened pretty much for the same reason then as it is happening now. Consumers’ assets took a real beating and consumers increased their desired savings in order to get their balance sheets in order.
Unfortunately the financial markets then and now were missing in action. They were unable or unwilling to move savings into productive, job creating investments. Right now - I heard this this AM on NPR banks have $800 billion in excess reserves on deposit with the FED.
So the financial markets fail, bankers continue to do well and the rest of us are left to adjust our lifestyles downward.
There is a simple solution: The government could borrow our savings and use them to fund socially useful projects like energy conservation and mass transit. My people call it fiscal stimulus.
Amazing. We have done everything except the very one thing needed to stimulate growth and jobs. Real profitsharing will quickly put us on the path to recovery. Here is how. Allow businesses to plow up to 20% net profits back to employees, and then give the business a tax credit for that dividend. This will stimulate supply and demand, which will stimulate more growth and more jobs. It will help individuals and families become more self-sufficient. It will make people less dependent on the government. It will widen the tax base, and replenish the safety nets of SS and Medicare ( more witholdings). It is a win win for business, labor, and government. It is the equivalent of a tax reduction for business. It is will increase household income quickly. It will help families pay for mortgages and medical premiums. It will refine capitalism to the model that was meant to be. Learn more about the TAX CREDIT FOR PROFITSHARING. Help us get a trial run at the state level, to measure the macroeconomic effects at that level first. contact me or visit http://www.profitsharinguprising.com to help make capitalism a more democratic economic system. This is where supply-side economics meets economic democracy.
September 30, 2009 12:04 pm
Link I don't see the effect of 50+ million baby boomers retiring over the next 10-12 years being factored into available jobs.
"” harryo
Read Full Article »