Rutgers economists have a new report (opens .pdf) out today with some pretty dire predictions about the U.S. labor market. They explain that since the beginning of the recession, the U.S. has lost 8.6 million jobs through August and will likely end up shedding at least 9.4 million. They then estimate that it will take a very, very long time to get back to our December 2007 unemployment level of 4.9%. Here's the key summarizing point:
Erasing this deficit will require substantial and sustained employment growth. Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010, it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit! This is approximately 50 percent greater than the length of the average post-World War II expansion (58 months).
The report goes through all of its assumptions and calculations in detail, so I won't bother regurgitating that here. If you want to see a nice breakdown summarizing their calculations and assumptions, check out page 10 of the report (opens .pdf).
But it also does a lot of comparisons between this and other recessions. Here's one chart, showing the job losses recessions were responsible for since 1980:
And here's another more detailed chart comparing the job losses from the 2001 recession and the current recession:
I thought it might be
fun depressing to map out their estimated recovery, since the report doesn't. Using their assumptions, including a linear increase in employment beginning in January 2010 through August 2017 to get us back to our December 2007 level, here's what the graph would look like (using Bureau of Labor Statistics data for the historical rates):
And this is the same data since 1980:
That is a very, very long time to take employment to recover. And it also assumes we don't have a recession for the next 8+ years, which is probably fantasy. So if anything it might be optimistic.
The moral of the story: if you have a job, hold onto it for dear life.