Is the recession over if you’re jobless?

Mitchell Hartman Dec 29, 2009

Is the recession over if you’re jobless?

Mitchell Hartman Dec 29, 2009


Kai Ryssdal: Even if you believe the recession actually is over, as no less a luminary than Ben Bernanke has told us, there is still that small matter of millions of lost jobs to deal with. The prospect of a growing economy without a comparable increase in employment has given rise to a phrase you might have seen or heard recently. The phenomenon of a “jobless recovery.” We’ve got our entrepreneurship reporter Mitchell Hartman on the line to look back at the labor market that was this past year. Hi Mitchell.


Ryssdal: So for most of this past year, it has been horrible recession and horrible job market together, right? But that is changing a little bit.

HARTMAN: It’s changing in terms of economic growth, at least as of the last several months. But it’s not really changing in terms of jobs. We’ve kept losing tens of thousands of jobs month after month, even as the economy officially went into expansion mode again a few months ago. Now that situation has improved steadily to where in November we lost a measly 11,000 jobs, but that means that there is a sort of disconnect between economists. They’re crunching the numbers and saying, “Hey, look, there’s growth again,” and politicians who are looking at the dismal state of employment and what they are saying is the recession’s actually not really over for working people.

Ryssdal: OK, but as you mentioned, we are at least creating some jobs, which means some people are getting hired, yes?

HARTMAN: Well, someone is getting hired. But the problem is it’s largely not the people who have been unemployed the longest. And that is one of the real problems as we go into next year. The number of people who are long-term unemployed — this means they are six months or more on the job market and still looking — is higher than in previous recessions and could take these people, in some cases, decades to regain their economic footing.

Ryssdal: Break it down for us, though, Mitchell. Who are we talking about? What’s it really like?

HARTMAN: I did a series on umemployment earlier this year. We were focusing on states with high unemployment. I did a quick check back with some of the people I had spoken with. So these were unemployed people. They included welders, some textile workers, there was a marketing executive, some people in computer programming. In six months none of these people has found full-time work. You know, it’s a buyers market for employers right now. There’s no doubt about it. I talked to Marianne Moore about this. She has an employment agency in Portland, and she deals with a lot of small businesses.

MARIANNE MOORE: They think that they’ve got the tiger by the tail. They’re trying to pay lower, they’re trying to get more work. If you want to get a job right now, if you’re flexible, that’s going to be it. Somebody who will answer the phones, do filing, do accounting. They’re trying to pigeonhole four jobs into one and pay less.

HARTMAN: So Marianne Moore complains about this, right? It makes it more difficult for her to place workers. And yet, she’s got a receptionist and that person doubles as her bookkeeper. So, she’s doing this, too.

Ryssdal: Let me put you on the spot here for a second, Mitchell, and ask you when you think the job situation might actually get better.

HARTMAN: Well, we’ll probably be having a little bit of job growth early in 2010. And there’s some encouraging signs that it’ll steadily increase. People are working more hours. Temp work is up. And that’s what is seen as a leading economic indicator. Basically it means permanent hires are down the road at some point. Again, Marianne Moore is seeing this with her agency’s clients.

MOORE: People are wanting to hold on to their pennies. And they’re trying not to spend any money, so they’re running their staff ragged right now. And that’s why we’ve seen a pick up in direct hires because they’ll agree to have a temp, and then all of the sudden they’ll be like, “You know what, this is working well, and we can afford it, so we’ll keep the person.”

HARTMAN: And this is exactly what economists say is happening across the economy. It has to happen a lot more to replace the 11 million jobs that we’re now in the hole for since the recession began. Now the president wants to pump some adrenalin into this hiring machine. He’s talking about more money for roads and bridges, for small business tax breaks to encourage them to hire new workers. The problem, according to a lot of small business owners that I’ve talked to, is that if they don’t have new business, if the economy doesn’t improve quite a bit, they’re not going to hire new workers however much of a tax break they get.

Ryssdal: Thus, the jobless recovery. Mitchell Hartman at the Marketplace Entrepreneurship Desk up at Oregon Public Broadcasting. Mitchell, thanks a lot.

HARTMAN: You’re welcome, Kai.

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