We need a new mindset around unemployment. If that’s not evident by the stagnant numbers reported each month at the national and state levels, here’s some analysis to back it up.
With each succeeding economic downturn, it takes longer — much longer — to return to pre-recession employment levels. The numbers:
- July 1981-November 1982 recession: employment returned to pre-recession levels 24 months later
- July 1990-March 1991: 36 month lag
- March 2001-November 2001: 72 month lag
If the above trend continues, it could be 2017 or so before "full" employment returns. That doesn’t take into consideration technology and other factors that are making it possible to do more with less. While the last decade has brought the realization that 4% unemployment is as low as it was going to go, the reality going forward might be 5.5%, 6% or even higher.
Add in another factor — the growing number of unemployed that may never escape that designation. Kiplinger is reporting that more than 4.3 million Americans have been unemployed for over a year. It’s not just those involved in manufacturing, either; many in service industries and an increasing number of college graduates find themselves unable to find that next job.
It’s a phenomenon that feeds upon itself. Those who have been unemployed the longest have a more difficult time trying to prove themselves to potential new employers. They are penalized by the fact that they have not worked recently, making them less employable. In turn, this curtails consumer spending and pressures government to add jobless benefits and other programs that support those in need.
Experts have talked about a "new norm" when it comes to employment levels. But what that norm is and its many widespread impacts are critical elements that must be thoroughly addressed. In other words, we need a lot of smart people to come together to craft some solutions.