Two charts. One is the number of employed, compared to where employment should be absent the Great Recession. I’ve not tried to correct this for the pending retirement of the Baby Boomers, but the bottom line (or rather the gap) is unfortunately all too robust.
The second eliminates those who are employed but on involuntary short hours. That’s a measure of the human cost — focused on that narrower group of employed takes cognizance that not only have many lost their jobs in the recession, but many have also been put on short hours.
Now what to make of this? We need to return to the trend line to be back at the status quo. The latest jobs report doesn’t provide bad news, it just doesn’t provide good enough news. We need to have unusually good job creation — and recent history has no examples of sustained rapid job growth beyond a couple quarters in a row. When I do back-of-the-envelope calculations I come up with 5 more years. More careful analysis could show that the gap is too large (I’ve used a trend, not actual demographic data) and that we can have both sustained and rapid job growth. I hope I’m off on both counts, but I still believe “five years” is the right order of magnitude.
Unless, that is, Congress throws us back into recession. Is threatening Medicare and randomly shutting down government services going to encourage people to spend [and businesses to invest] rather than save? Not likely.
Then there are the mass firings of teachers and others at the state and local level. California already has to pay a stiff premium so state-level legal constraints aside, markets aren’t going to let them borrow money to stop their local downward spiral. And it’s not just California, but state and local governments across our land. US Federal debt is not an issue — look at the market’s judgement revealed in low interest rates. And because it’s not an issue, it does offer a way to keep us from digging our hole deeper. For better or for (in this case) worse, Congress is washing its hands of watching after the commonweal in favor of generating sound bites for the campaign trail.
My numbers by themselves are too pessimistic. But not if you correct them for politics