The December U.S. jobs report offered little to cheer about. The country counted 155,000 new non-farm jobs in the last month of 2012, a rate of growth that echoed the average monthly job gain for the last year (about 153,000). Much of the early coverage was tinged with a sense of relief. The fiscal cliff noise did not deter hiring. The post-Sandy devastation in New York and New Jersey did not drag down the national numbers. The economy was finally showing “steady” growth.
But one step back from the monthly scoreboard-watching, the picture is not nearly as reassuring.
Measured against the trajectory of all other postwar recessions (see graphic below), the current downturn is deeper and longer—by an impressive margin—than any that preceded it. Before 1980, the job market never took longer than two years to return to its pre-recession levels. The recession of 1981 and 1990 pushed this out into the thirty month range. It took four years to struggle back to the surface after the 2001 recession. The current recession is over five years old and counting. If we continue to add jobs at the 2012 monthly rate, we will be underwater for about twenty-six more months.
But even this is not the best measure. Over the course of the recession, the potential labor force has grown as new workers have graduated college or high school, or immigrated to the United States. Our jobs deficit is equal to the number of jobs lost since the recession began plus the number of jobs we should have been adding to keep pace with the growth of the working-age population. That number, by the ongoing calculation of the Economic Policy Institute, is about 9 million. At current growth rates, it will take eight years to clear that deficit.
Finally, the raw jobs numbers are silent as to the quality of the jobs being added. We continue to lose public sector jobs, and while private sector wages inched up in December, that increase still lagged behind the inflation rate. “Recovery” job growth is concentrated in sectors marked by low wages and meager job-based benefits. The job numbers may be “steady,” but the recession is still very much with us. The jobs deficit is substantial. And the goods jobs deficit is even worse.