If you haven’t seen this chart, and you are concerned in the slightest by the unemployment in this recession, you’ll want to look carefully at it. In fact, I recommend you not just look at but study this chart. This is a comparison of the job losses and recovery for all US recessions after World War II, starting with the recession in 1948.
The colored lines represent a different recession and jobs that were lost. The x-axis (the numbers along the bottom) are the number of months each recession lasted. Each line shows the percentage of unemployment for a given month during the recession, where the job loss was deepest, and how long it took for the jobs to recover to where they were before the recession.
Now, notice how the early recessions, for the most part, tend to last less than two years. But then in 1981 we had a recession that lasted 27 months. Each successive recession lasted longer, although the percent of jobs lost was not as great. Now, look at the red line that represents the ongoing recession. Try to extrapolate in your mind how the curve will go now that the job loss has (theoretically) bottomed out and is oh so slowly, painfully straining upward. If you have any illusions that this job market is going to recover anytime soon, this chart should dispel them. This is going to take years to replace those lost jobs.
But, the smart money says that a lot of those lost jobs are gone forever, and it’s not clear what will replace them. What is clear is that those jobs being created now are, on average, not as good as the jobs we lost, and they are in different sectors, so people who are trained and experienced in one career where the jobs went overseas will have to retool if they are going to work again.
It’s depressing to look at, but the reason I put this chart up is to give you some idea what you are up against. If we get out of this, it will be by thinking about work and entrepreneurship in different ways, and agitating like hell to get the Government to pay attention to this very serious problem.
Furthermore, if that table shows “unemployment rates” as calculated by the number of people on formal unemployment pay, it likely understates the problem – as there is a limit to the time frame that an individual is able to get unemployment benefits. Whether an individual has found a position or not by the end of that period, they slip off the list and fail to add to the unemployment count.
Cheery, ain’t I?