Recovery of the Job Market, This Decade or Next?
The Center for Economic Policy Research published a report in July 2010 entitled “The Urgent Need for Job Creation” by John Schmitt and Tessa Conroy.
Between December 2007 and December 2009, the U.S. economy lost more than eight million jobs. By the time we return to the number of jobs we had in December 2007, population growth will have increased the potential labor force by about 6.5 million jobs.
Given this data, these projections for recovery can be made based on the following assumptions about the rate of job creation from mid-2010.
If job creation proceeds at the same pace as the fastest two years of the mid-1970s and the early-1980s expansions, the economy will attain the December 2007 employment level in November 2011, and absorb the expanded labor force by September or October 2012. (Fig 6)
If job creation proceeds at the same rate as it did in the 2000s expansion, the economy will reach December 2007 employment levels in March 2014, but not catch up with the expanded labor force until April 2021. (Fig 4)
The Congressional Budget Office’s projection for job creation is a rate between the last two most recent expansions. The authors used the CBO’s recent set of economic projections, and assuming no new jobs creation program, the economy is not projected to not return to December 2007 employment levels until June 2013, and the increased number of workers will not be incorporated in the labor force until August 2015. The CBO’s long-term projections also assume that the economy will level off at a higher 5.0 percent unemployment rate, not the 4.6 percent average rate in 2007. (Fig 7)
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