Anyone who has been laid off during this recession probably does not need any more bad news. Unfortunately, that's exactly what a New York Times article provides today. The Times explains that the loss to a person's career income who has been laid off lasts a lot longer than the duration of the recession. That's a grim reality not only for those who have lost their job, but for the economy on a whole.
The Times says:
Taken together, their struggles are stark illustration that it can take years for a worker's earnings to bounce back after a layoff, and that it can take even longer for a layoff during a recession. Economists, in fact, say income losses for workers who are let go in a recession can persist for as long as two decades, a depressing prognosis for the several-million people who have lost their jobs in the current recession.
It also provides this sobering chart from economists who studied the recession of the early 1980's effect on income:
Many of those individuals laid off during this recession have had their career income growth fatally wounded. For many, their career income expectations may never recover.
The implications extend beyond just those laid-off too. After all, individuals make up an economy. With such a large proportion of the population experiencing an economic shock to their lifetime earning potential, the U.S.'s GDP growth will also be affected.
That makes for slower growth and less prosperity in the years to come than what we would have seen after a milder recession. Even after the recession is over, its presence will still be felt for some time.