Thursday, February 17, 2011

1 in 12 Workers Still Jobless Since Start of Depression

Forget the unemployment rate. Everyone knows it is so gamed it is meaningless. 9%? 16%? 22%? What number you pick is all about how you want to spin it, truth be damned. But there is a number that cannot be spun: The employment-population ratio. This is the percent of people who are employed.

Looking back over the half century, the employment-population ratio typically runs at around 60%, +/- 5%. When this current recession began, it was at 63%. Now it is at 58%. That means that 1 in 12 Workers who had a job in 2007 no longer have a job. In other words, 1 in 12 Workers are still jobless since this Depression began.

Now here is the most amazing tidbit of all.

Look back at the numbers from the 1982 recession, which was previously the worst recession of the last 50 years. Right now we are at just about the 2 year marker, past where the recession ended. (Where it supposedly ended anyway.) Notice how at this point after 1980's recession ended, the employment-population ratio was already back at its pre-recession peak. That is what an economic recovery looks like. What we're in now is nothing of the sort.

We need to create 16 million jobs to get back to 63%. That gap grows by almost 2 million a year. In case you are curious, a 1983-1985 style true economic boom recovery would create 390,000 jobs a month. Each and every month over a 3 year period. That is what a true economic recovery looks like.