There is no life in our jobs market. The recession officially ended in June 2009, but the Great Jobs Recession continues apace. Not since the government began to measure the business cycle has a deep recession been marked by such high levels of unemployment and underemployment, and followed by such anemic job growth. More jobs were lost in the recession of 2007-09 than in the previous four recessions combined—and this time it is an agonizingly slow business to replace them. Of the 8.8 million jobs lost during the downturn, roughly 900,000 were recovered in 2010, and many of these were temporary census positions. Since last June, employers have added a net of only about 284,000 jobs.
The recent headline news that the unemployment rate has fallen by 0.4 percentage point to 9 percent reflects somewhat more activity in manufacturing and retail, but less work in construction, transportation, and warehousing. The 9 percent was thus not bad news, but it was not good news either, since we need 130,000 new jobs each month just to meet the needs of new entries to the labor force and we gained only a dismal 36,000 in January. That comes on top of last year's disappointing monthly job creation rate of only 75,000 on average. Altogether, the 9 percent headline figure is an illusory portrait of the situation across the country, representing 13,863,000 men and women out of work. What happens if you add to that the 8.4 million "involuntary" part-time employed, whose hours have been cut back? Then you get a household unemployment rate slightly under 17 percent.
Turn the percentages into people again. In January, according to the Bureau of Labor Statistics, we had 2.8 million people only "marginally attached" to the labor force. A million or so of these are counted as the "discouraged," people who have given up altogether. The other 1.8 million have looked for work in the last 12 months without success but are not counted in the labor force because they haven't tried to get a job in the last four weeks for any number of personal reasons, such as family sickness, school responsibilities, weather, and travel problems. While the headline unemployment figure is down, the number of "marginally attached" increased by 300,000, and the decline in the rate from 9.4 to 9 percent is primarily because these workers have just dropped out of the market. But they haven't dropped out of life in America. They represent a colossal waste of energy and talent, as well as a loss of spending power.
It all adds up to a shocking figure: More than 25 million Americans are now either jobless or underemployed. That's nearly twice as many Americans out of work as there were in the black year of 1933—13 million then. (Only in one year before 1940 and the war did unemployment dip below 8 million.) Of course, the labor force was much smaller then, so the unemployment rate was higher. In the Great Depression, between one third and one quarter of the working population didn't have jobs.
Our real unemployment rate in 2011 is almost twice what it was before the onset of the recession in 2007, and at the current pace, it looks as if it will take until late 2016 to make up for the net job loss to date of 7.5 million. What is normal at this stage of the typical recession cycle is not only that job losses would be reversed, but that a new record high would be reached. As the economist David Rosenberg points out, after the dot-com bubble burst and with far less government stimulus in the last so-called jobless recovery, we had already recouped 62 percent of the aggregate decline in unemployment. This time around we have managed to recoup a mere 12 percent, despite the most stimulative fiscal and monetary policy in the history of America.
The detailed statistics are even more depressing. Here are some highlights:
•The number of full-time jobs, the critical factor in rebuilding personal confidence and spending, is down by roughly 10 million. Those suffering from long-term unemployment, who have collected benefits for 27 weeks or more, now amount to more than 4 percent of the labor force compared to the previous post-Depression peak of 2.6 percent in 1983. This is the highest since these records were started in the late 1940s.