Keith Hall is a senior research fellow at the Mercatus Center at George Mason University, and former commissioner of the Bureau of Labor Statistics.
The Great Recession officially ended in June of 2009 and for nearly three years economic growth has been maintained at an annual rate of 2.4 percent. With its usual delay, the labor market hit bottom 8 months after the recession's official end. Since then, we've had 28 straight months of payroll job growth totaling about 3.9 million workers (excluding the temporary government jobs added for the 2010 decennial census).
While this superficially sounds like progress, it has been one of the weakest recoveries on record. Here's why:
First, economic growth has not been strong. In fact, with the exception of the 1980 downturn that ended in a double-dip recession, we've had by far the weakest post-recession gross domestic product growth in more than 60 years.
Second, while these job gains are welcome news, they are not nearly enough. A true labor market recovery would mean that job growth would need to outpace population growth. Right now, the share of the population that is employed remains near its 25-year low. In short, what we need is at least 250,000 new jobs per month, every month, for years. At our current rate of job growth, we would literally never reach a labor market recovery.
Third, in addition to poor job creation, we've had slow wage growth. Growth in hourly earnings is now just 1.9 percent per year, barely above inflation. In addition, 90 percent of the private sector job growth has been by nonsupervisory production workers and their wage growth has fallen nearly in half over the past three years to just 1.5 percent per year. In fact, earnings growth has virtually stopped in some industries, falling below 1 percent in professional and business services, other services, and durable goods manufacturing, transportation and warehousing, and information services.
Finally, the problem of the long-term jobless only grows. Well over 5 million people are currently counted as long-term unemployed. Plus, millions have lost their work but are not counted as long-term unemployed or even unemployed because they are no longer actively searching for work. The average person that becomes discouraged and quits looking has been jobless for over 21 weeks. This means as many as 9 million people may really be long-term jobless. Past experience shows that this group of unemployed people has a much more difficult time finding new work, even in robust economic recoveries.