Higher jobless rate could be new normal
Published: October 20, 2009
WASHINGTON -- Even with an economic revival, many U.S. jobs lost during the recession may be gone forever and a weak employment market could linger for years.
That could mean a "new normal" of higher joblessness and lower standards of living for many Americans, some economists suggest.
The words "it's different this time" are always suspect. But economists and policymakers say the job-creating dynamics of previous recoveries can't be counted on now.
Here's why:
- The auto and construction industries helped the nation out of past recessions. But the carnage among automakers and the surplus of new and foreclosed homes and empty commercial properties make it unlikely these industries will be engines of growth anytime soon.
- The job market is caught in a vicious circle: Without more jobs, U.S. consumers will have a hard time increasing their spending; but without that spending, businesses might see little reason to hire.
- Many small and midsize businesses are still struggling to obtain bank loans, impeding their expansion plans and constraining overall economic growth.
- Higher-income households are spending less after losses on their homes and other investments. Lower-income households are cutting back because they can't borrow like they once did.
That the recovery in jobs will be long and drawn out is something on which economists and policymakers can basically agree, even as proposals for remedies vary widely.
Retrenching businesses will be slow in replacing workers they laid off. Many of the 7.2 million jobs the economy has shed since the recession began in December 2007 may never come back.
"This Great Recession is an inflection point for the economy in many respects. I think the unemployment rate will be permanently higher, or at least higher for the foreseeable future," said Mark Zandi, chief economist and co-founder of Moody's Economy.com.
Even before the recession, many jobs had vanished or been shipped overseas amid a general decline of U.S. manufacturing. The severest downturn since the Great Depression has accelerated the process.
Many economists believe the recession reversed course in the recently ended third quarter, and they predict modest growth in the nation's gross domestic product over the next few years. Yet the unemployment rate is currently at a 26-year high of 9.8 percent -- and likely to top 10 percent soon and stay there for a while.
"Many factors are pushing against a quick recovery," said Heidi Shierholz, an economist at the labor-oriented Economic Policy Institute. "Things will come back. But it's going to take a long time. I think we will likely see elevated unemployment at least until 2014."
At best, many economists see an economic recovery without a return to moderate unemployment. At worst, they suggest the fragile recovery could lose steam and drag the economy back under for a double-dip recession.
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It really dosen’t matter who has the most jobs losses, Bush or Obama, the question is what’s being done about it. The problem is the answer is Nothing! Everything Obama proposes will raise taxes on everyone including business. So with the prospect of higher taxes and with no incentives to expand business, there will be no new jobs. If Obama wanted to create jobs he would cut taxes and give incentives to business. He is just fine with the “crisis” he is perpetuating by his actions, or lack thereof. If you want to push socialism it would be better accepted if a majority of the people are directly feeling the effects of a “crisis”. He is pushing this country right where he wants it. More power and authority to govt. and these people, who are so much smarter than we are, get to tell us how to live our lives.
Single issue thinkers? Like Hoagie and hating Democrats? (“No amount of evidence will change his mind”). Democrat = bad, Republican = good. Sorry, that doesn’t constitute two issues, buddy.
Some say “Just go to the OFFICIAL gov sites”. Do you think people trust our present day government?
This is the same government who staged a fake Chamber of Commerce press conference to announce support Cap and Tax.
http://www.youtube.com/watch?v=_wO_PLP-XEE
The graph drhoagie referenced is an actual graph prepared by the Obama administration. It does not get anymore govmint then that. Mmm, mmm, mmm.
Jack; I come from a blue collar neighborhood from a Blue State inner city. Most of my family were former union workers.
My parents were Democrats. Who weren’t back then? But if you ask a most Democrats why they vote Democrat today, the only connection they have to the party is daddy.
Ever agenda of the modern day Democrat Party is brushed off. They really think this is still the party of JFK.
They really are single issue thinkers (Republicans are racists!)
No amount of evidence (maybe Obama will break that mindset) can change their minds.
Daddy voted for JFK so that means I have to vote for Democrats.
It’s funny, Daddy shaved with a straight edge razor, yet they all shave with a triple blade?
I find both Dems and Reps to be full of crap and should be disolved and no longer parties of the United States we need to start over and have two completly new parties with new ideas that have never been thought of before or Become loyal to two new third parties and completely neglect the Dems and Reps. VOTE TO GET RID OF THE CURRENT TWO PARTY SYSTEM.
Democrats have and will do anything including destroying millions of jobs and the country if need be to trash Republicans and expand their hold on power. Too bad the good patriotic democrats are blind to the DNC agendas and allow them to continue. Maybe when it’s their job, home or family they will wake up and open their eyes.
I totally agree Bababooey. I too just want the economy and our country going in the right direction. Its amazing how people take sides politically, blindly, only because of their own political egenda. As soon as people stop finger pointing to other parties and start becoming accountable, thats when we as a country will start to move in the right direction.
WOW. Talk about bringing a pea shooter to a gun fight. I use the information from gov sites. Not a politically motivated site. I used a site other than the one I have in my first comment like the census site. Which is where I got the data to make Bush’s jobless rate increase look even worse.
Obviously you are a Republican, or just anti BO. Doesnt matter. I hope you dont get yourself too worked over info like that. Its like you enjoy the misery.
Just go to the OFFICIAL gov sites MrHoagie, cause unless you havent figured this out yet, a democratically backed site will OBVIOUSLY have data to back their agenda.
Its very funny you were the one to mention pea shooter. Since you spent time to look up some info and couldnt find unbiased FACTS I’d be more than happy to send you the census sites links so you can view FACTUAL data.
When the politicans stop worrying about being a Republican or Democrat and start to put America first, we’ll take the first major step to putting our economic house back in order. I don’t care if the recession started under Clinton, Bush, or Obama; the fact is that we’re all feeling the recession one way or the other.
My neighbor is a well qualified professional person who has been out of work for over a year. The neighbor wants to work and would bring great job skills to an appropriate position - but the jobs are not there.
My fear is that the great health care debate is a distraction to our most serious national problem, employment. Imagine a political debate if you stopped a pol from talking everytime they strayed from the issue of jobs.
Put the pressure on the politicans - put America and Americans first!
Here is an indisputable chart prepared and provided by the Obama people themselves regarding unemployment and what would happen if we did NOT rush thru a reckless bill without anyone reading it.
The overlay of present day unemployment (outdated already but unemployment is still on the upswing) was superimposed after the stimulus was signed.
Obama promised unemployment would be much lower today if we passed the stimulus package. Fact is, unemployment is much higher today after we got ourselves in another $TRILLION$ in debt then it would have been if government got out of the way of the private sector. And you know Obama’s people fudged the numbers regarding unemployment projections if a bill would not be passed. That’s what thugs do; they lie and intimidate.
Obama’s own chart is lying to you?
http://michaelscomments.files.wordpress.com/2009/07/stimulus-vs-unemployment-june-dots.gif
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