No Silver Bullet for Unemployment
February 24, 2011
The last jobs report was dismal. Recent consensus forecasts of 148,000 new jobs collided with a reality of 36,000 new jobs. The unemployment rate fell only because half a million discouraged workers stopped looking for jobs and left the labor force, says Marie-Josee Kravis, a senior fellow at the Hudson Institute.
- The labor force participation rate of 64.2 percent is the lowest it's been since 1984, and the employment to population ratio -- at 58.4 percent -- is the lowest it's been since 1983.
- Total employment in January 2011 was 139.3 million, which means 555,000 fewer workers had jobs than in June 2009, when the National Bureau of Economic Research deemed the recession over.
- Even if the workforce had grown by the anticipated 148,000 last month, there still would have been 443,000 fewer people working than in June 2009.
Despite massive fiscal stimulus and expansionary monetary policy, jobs continued to disappear even when the recession was said to be officially complete; leaving roughly 8.8 million workers out of work. In contrast, in the '80s, '90s, plus the early part of the decade just passed, job growth resumed relatively quickly. Eighteen months after the end of the recession, employment had reached prerecession levels.
There is no magic bullet here, but governments must stop hiding behind the financial nature of the recession and come forth with policies that actually steer growth toward a more vigorous course, says Kravis.
Source: Marie-Josee Kravis, "It's Time for Washington to Get Serious About Job Creation," Real Clear Markets, February 22, 2011.
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