The economy faces a climb to get back to full employment, but the worst job losses may now be in the rearview mirror. One indicator to watch for: a bump in average hours worked.
How bad is this jobs recession?
When considered in terms of the number of jobs available at the start of the recession versus 18 months later, this is the deepest since World War II. As of June, about 1 in 6 people in the labor force is either unemployed and seeking work, wants a job but has stopped looking, or is working part time and wants a full-time job. Among those hit hard: Those with only high school educations are faring worse than they did in the 2001 recession.
What policies are needed to bring jobs back?
President Obama is banking on his $787 billion stimulus plan, which includes tax cuts and government spending on everything from schools to clean energy. His team hopes that this, coupled with support for the banking system, will pave the way for private-sector job creation to begin again.
On the left, some economists say an additional stimulus plan may be needed. But conservative economists say the real need is to keep taxes low and make sure that government spending and regulations don’t crowd out free enterprise. No one has easy answers, though, at a time when consumers are digging out from under a mountain of debt.
The Obama administration is backing other measures focused not just on the quantity of jobs but also on the quality of pay and benefits. Healthcare reform and boosting the bargaining power of organized labor are priorities for the administration.
According to Peter Morici, an economist at the University of Maryland in College Park, the recipe for a healthy job market is not to empower unions but to fix the trade deficit and banking system.
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