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This economic recovery will be a jobless one
An applicant holds a folder of resumes while speaking with a prospective employer at a job fair on June 11, 2012 in New York City.
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Jeremy Hobson: Well it's amazing, if you think about it, that five years -- almost --after the recession began, the Fed is still taking such extraordinary action to boost the economy. It's unlike any economic recovery in recent memory. But then again, the Great Recession has also been pretty unique.
Marketplace economics correspondent Chris Farrell joins us now to discuss. Good morning.
Chris Farrell: Good morning, Jeremy.
Hobson: Well Chris, what should we be comparing this recovery to?
Farrell: We should be comparing it to the jobless recoveries of the early 1990s and the early 2000s. You know, you map out, you graph this recovery that we're going through to those two previous recoveries -- they just look the same. Unlike the mid-'70s and the early '80s, where you had much more of a rebound in the job market.
Hobson: But this recession was much bigger than anything we've seen since even before the '80s, right?
Farrell: That's right. But this recession has just exposed a number of ongoing trends in this economy. So you know, businesses are really embracing productivity rather than hiring workers. 'Let's get more out of our people before we hire more.' And you've got the information technologies, and those have wiped out whole departments of low-level, white-collar workers. And then of course there's globalization. So Jeremy, if you look at a lot of these companies -- the S&P 500 companies, the ones that we talk about all the time -- they're hiring. They are hiring. But much of the hiring is going on overseas.
Hobson: So does that mean that every recovery we're going to see now going forward is going to be a jobless recovery in the United States?
Farrell: I think that needs to be our expectation. And here's the thing -- what that tells us is that during a recovery, during the good times -- OK, we can't exactly call what we're going through right now the good times, but let's assume that we do have good times -- we need to focus a lot more on training programs, on working with the less-skilled, the less-educated workers, because these are the ones that are really being hammered during this period of time. And so, there's really a lesson for the recovery -- where do we invest our dollars? -- as opposed to a lesson from the downturn.
Hobson: How do we get out of a situation like this, Chris?
Farrell: You know, I wish I had some sort of optimistic tale to tell you Jeremy, but here's the lesson of World War II and the Great Depression, which is you had a lot of hardcore unemployed. And business didn't want to hire them. What changed that circumstance? World War II, when all of a sudden, business had to adjust and they would hire anybody that was willing to work.
Hobson: I think I'm probably not alone in hoping that that is not the way that we get out of this recession. Marketplace economics correspondent Chris Farrell, thank you so much.
Farrell: Thanks a lot, and I agree with you.
Interesting how we are blaming the unskilled workers lack of education.
Not one iota of questioning the pitfalls of globalization!
Not only has this undermined jobs here, but ramped up inefficient resource and energy consumption. The world desperately needs to create economies that conserve energy rather than guzzle it - rather than base competition on financial efficiency alone.
We need balanced local human economies that provide for the diversity of people and their skills.
And if we think that retraining will just solve the problem, maybe we should remember that such "retraining" can take place almost anywhere.
America is just headed toward becoming another third-world country. Soon we'll have the same structure as India or China, with the rich getting richer and everybody else scrounging for a living in a polluted environment.
GO AMERICA! Tax cuts for the rich and cutbacks on food stamps! Turn the country over to the hyper-rich like the Koch Brothers and Sheldon Adelson and their front man, Mr. Romney!
PS: Just read on Reuters that the poor in the US live 5 years less than the world average.
The job market is an indicator of a) how much damage the US economy took during the Great Recession and b) changes that happened to it, as a result. This jobless recovery is different than previous ones because it started from a lower point (and thus the grim sensation three years after the official end of the Great Recession, according to NBER).
Every job created in the decade after December 31, 1999 was lost, leaving a labor force the same size on January 1, 2010 as ten years ago. Factoring in labor force growth, job gains of the last three years have been merely break-even; we haven't recovered any of the lost jobs, in that case (see the Hamilton Project at Brookings, where full jobs recovery is not likely until 2020 under reasonable assumptions).
