I’m not quite ready to throw a party about the unemployment rate dropping to 7 percent because there’s still too much evidence that the decline is driven less by genuinely robust job creation than by more of the long-term unemployed becoming so discouraged that they are dropping out of the employment market altogether. In addition, we’ve experienced such “false dawns” of higher employment and increased growth during the past several years, only to fall back into the overall anemic growth pace that has been characteristic of this recovery.
That being said, the New York Times posted some interesting stats in the Economix blog about the trajectory of employment recovery from financial crises through history, and there’s decent food for thought there. The fact is, recovery from the devastating job losses of the Great Recession is actually ahead of where we might be compared to other historical financial crises.
So, it could be worse — after the Great Depression, it took 10 years for employment to fully recover. Japan employment has yet to recovery from the deflationary spiral that began in 1992. Sweden, Norway, Finland and Spain experienced between 8.5 and 17 years of lagging employment following crises in the 70s, 80s, and 90s.
That’s the good news. The bad news is that millions will continue to suffer as the recovery plods through the decade. Many older and younger workers will likely never make up the wages and lost opportunities that the recession took from them. While female employment has rebounded, employment among men is still lagging, according to CNNMoney.
Finally, on a sobering note, the Brookings Institute estimates that it will take seven more years at the present average rate of job creation to make up for all the jobs lost during the recession. So, if you’re out of a job or underemployed, take heart, because you may be back where you were by 2020.