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Unemployment: Good News, But a Long Way to Go
Posted by Karen Traeger on Jan 09 2012
Blog >>

By:  Bob Lucore

The unemployment numbers for December, released on Friday, represented an improvement. The employment situation is getting better, but the economy is not nearly out of trouble yet. The official unemployment rate is still high, at 8.5%. The economy generated a healthy 200,000 new jobs in December.

It has been four years since the recession started in December 2007. At the beginning of the recession, unemployment stood at 5%. It rose rapidly, peaking at 10% in October of 2009, when the Obama administration was in its ninth month. It has slowly declined, with month-to-month ups and downs, since then.

The economy continually lost jobs, about 8.7 million in total, from the beginning of the recession until a low point in February 2010. About half of this loss occurred during the last year of the Bush administration (4.4 million) and about half in the first year of the Obama administration (4.3 million). After that low point, the administration’s recovery efforts began to show slow progress, and the economy has since grown by nearly 2.7 million jobs.

As Heidi Shierholz of the Economic Policy Institute points out, the economy still has a jobs deficit—defined as the number of jobs needed to make up for those lost due to the recession, plus those needed to keep up with normal growth in the labor force—of over 10 million. If employment were to continue to grow at December’s rate, it would take until 2019 for unemployment to return to its pre-recession rate.

While the private sector has generated new jobs, cut-backs are leading to job loss in government. Over the course of the last year, private employment grew by 1.9 million jobs. Even manufacturing employment, which has been in the doldrums for decades, grew by 225,000 jobs last year. However, public sector jobs, decimated by state and local budget crises and ill-timed budget-balancing efforts at the Federal level, fell by over 280,000 last year and well over half-a-million in the last two years.

Although unemployment rates have been falling for most major groups: men, women, whites, Latinos, and Asian-Americans, it is disturbing to see that the unemployment rate for African Americans has begun to increase again—up to 15.8% last month after falling to 15.0% in October.

So, while the economy has begun to move very slowly in the right direction, it still has a long way to go. With conservatives opposing nearly every effort to improve the economy, and storm clouds threatening to spread from Europe to the U.S., jobs and the economy must remain the major focus in this election year.
 

Bob Lucore, a long-time ADA board member, is the former Director of Research and Policy for the United American Nurses and has worked for the Teamsters and the Department of Economic Research at the AFL-CIO. . He taught economics for several years at Centre College and Colorado State University and is currently a graduate student and research assistant in the School of Library and Information Science at San José State University. Bob is a member of UAW Local 1981, the National Writers Union.

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