If the recession were a bout of the flu, we would be at about that point where the fever has broken—but we still feel like throwing up most of the time. The “recovery,” now in its fifth year, has yet to deliver the kind of job or wage growth sufficient to lend the term anything but the narrowest technical meaning. Things are no longer getting worse, but they are not getting much better either.
The simplest and starkest measure, on this score, is the glacial progress of job recovery—which so far has barely kept pace with those joining or returning to the labor force. But that is only part of the story. Unemployment has been accompanied by a number of troubling weaknesses in the labor market. And progress on each of these (summarized in the graphic below) has been even slower.
While employment rose from 4.5 to 10 percent as the recession took hold, long-term unemployment (the share of the unemployed who were without work for more than twenty-seven weeks) shot from 16 percent to 45 percent. And while the unemployment rate has slipped back to 7.6 percent, the long-term unemployment share—at 37 percent—is still more than double its pre-recession level.
In the weakening labor market, the share of part-time work also rose, from about 16 percent to about 20 percent of all employment. And in the weak recovery, this share has stuck—hovering at around 20 percent ever since. Some workers want part-time work, but it is pretty clear that this is a recessionary hangover. The share of “involuntary” part-time workers (those who want full-time work but can’t get it) doubled during the recession— from 16 percent to over 33 percent—and is still around 30 percent.
Some of this is captured in the underemployment rate, an alternative measure that counts involuntary part-timers and marginally-attached workers (those who are not currently working or looking for work but would if economic conditions were better) alongside the unemployed. The underemployment rate peaked at over 17 percent in late 2009 and early 2010, and—at 14.3 percent—is now near double the conventional unemployment rate.
Finally, the insured unemployment rate (the share of workers that are unemployed and drawing unemployment benefits) captures the economic and politics of the last business cycle. At the depth of the recession, about 5 percent of the labor force was unemployed and drawing benefits. Today, four years into a recovery punctuated by federal sequestration and a carnival of nastiness in state politics, only 2.3 percent are unemployed and currently covered. The rate of unemployment is falling slowly. But the rate of unemployment that we are doing anything about is dropping like a stone.