The Economic Policy Institute does a deep-dive on the long-term unemployment picture (hat tip: Naked Capitalism).
There are some significant pearls of economic consideration in this analysis, especially as it applies to long-term employment.
Here is one that I think is particular enlightening regarding the unemployment deficit we need to recover from:
“Furthermore, while the labor market has shed 6.7 million jobs since the start of the recession, it is important to keep in mind that in those 19 months, the population has continued to grow. Just to keep up with population growth, the economy must add approximately 127,000 jobs every month, which means almost 2 and a half million jobs, should have been added over this period. In other words, the economy is now 9.1 million jobs below what is needed to maintain pre-recession employment levels.”
Now, I think we get into some reality of what is actually happening in the jobs’ market as employers attempt to cope with the recession with these next two points.
Analyzing change in aggregate weekly hours:
“Total hours worked in the economy is a more comprehensive measure of labor market weakness than employment because it captures both job loss and reductions in hours for workers who keep their jobs. Table 3 shows an index of aggregate weekly hours of production and nonsupervisory workers on private nonfarm payrolls at the start of each recession over the last forty years along with its value 19 months later. Again, aggregate hours during the current recession are falling at a faster rate than in previous recessions; over the course of this recession, aggregate hours have fallen 8.8%, whereas in the first 19 months of the recession of 1981/1982, aggregate hours fell by 6.2%”
And reviewing the underemployment rate:
“Underemployment is a more comprehensive measure of labor market slack that includes not just the unemployed, but also “involuntarily” part-time workers (workers who want full-time work but can’t get the hours) and marginally-attached workers (jobless workers who want a job but are not actively seeking work and are therefore not counted as officially unemployed). Underemployment data as currently measured are only available since the mid-1990s, so it is not possible to compare the current recession to the recession of 1981 on this measure. Table 4 shows underemployment over the current recession. In particular, the number of involuntarily part-time workers has increased by approximately 90%, from 4.6 million to 8.8 million. Over this time, the underemployment rate has increased from 8.7% to 16.3%, so that now nearly 26 million people—one out of every six US workers—are either unemployed or underemployed.”
I certainly don’t want to still all the thunder of this excellent analysis. Take a look and review the charts. I am not submitting that it is perfect (few economic analysis are), but it is certainly worth putting in your data banks.
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