ON THIS LABOR DAY TRY DOING THIS!! Take ten minutes and read a synopsis of part of The Poverty and Inequality Report 2014 from Stanford University. Good information to share with others. A failing labor market • In November 2013, six years after the start of the Great Recession, the proportion of all 25-54 year olds who hold jobs (i.e., “prime age employment”) was almost five percent lower than it was in December 2007, both for men and women alike. The ratio for men, currently at 82.7, is the 10th worst ratio over the last 13 years, while the ratio for women, currently at 69.2, is the 12th worst ratio over the last 13 years. • The long-term unemployment rate for men and women alike is near the all-time high for the period since 2000. Implication: Although the Great Recession ended over four years ago, the economy is still not delivering enough jobs. In the past, recoveries have not produced substantial employment gains beyond the sixtieth month after the recession began, a result that suggests that full recovery from the latest recession will likely not occur absent major labor market reform and intervention. Rising poverty • The official poverty rate increased from 12.5 percent in 2007 to 15.0 percent in 2012, and the child poverty rate increased from 18.0 percent in 2007 to 21.8 percent in 2012. The current poverty rates for the full population and for children rank among the very worst over the 13 years since 2000 (i.e., both are ranked 11th). • The latter increases in poverty, although substantial, would have been yet larger had the effects of the labor market downturn not been countered with aggressive safety net programs. Absent any safety net benefits in 2012, the supplemental poverty measure would have been 14.5 percentage points higher. Implication: In the recessions of the early 1980s and early 1990s, the poverty rate was also approximately 15 percent, even though these were more moderate downturns. Although the latest recession was more extreme than these prior ones, the rise in poverty has nonetheless been partly held in check by a responsive safety net. None of the recoveries (and none of the others we looked at but do not show) produced significant employment gains beyond the sixtieth month (i.e., five years) after the recession began. In the 1950s, 1960s, and 1970s, recessions were about five years apart. Since 1980, recessions have been less frequent, but no recovery has been sufficient to return prime-age employment to pre-recession levels. That strongly suggests that full recovery from the Great Recession will not occur unless and until the federal government enacts a second stimulus package. The political environment makes a stimulus highly unlikely, but the slack in the U.S. job market implies that the economy needs it. CONCLUSIONS The Great Recession was a jobs disaster that took unemployment to heights seen only once before in over fifty years—in 1982. In 2009 and 2010, the U.S. economy hit postwar highs in job loss, the portion of the labor force unable to find work, and the duration of unemployment spells. The Great Recession was the sixth recession since 1970. In all six post-recession recoveries, men’s prime-age employment was lower four years into recovery than when the recession started; in the last two, women’s prime-age employment was also below the pre-recession level. It is almost as if the economy recovers because of job losses not despite them. The latest employment data suggest that the consumer-driven private economy cannot spark an employment recovery on its own. Productivity increased, profits soared, and Wall Street recovered since 2009. But overall employment languishes at levels barely above recession lows. Americans value work and need to work. The private sector economy seems incapable of delivering on that goal. The public sector seems incapable of anything but austerity. History and logic caution that full employment will not return without a private-sector breakthrough or a public sector stimulus. ■
Posted on: Mon, 01 Sep 2014 18:53:37 +0000
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