January's job report came out last Friday and it was 'good news, not so good news'. A reduction in the unemployment rate from 9.4% to 9%, was good news tempered by the fact that the economy generated on 36,000 jobs. So far, we are trudging out of a Recession the likes of which we've never seen before.
It is incredibly important that we understand that the damage caused by the near collapse of the U.S. economy in 2008 did structural damage to our economy in some very fundamental ways.
The Economic Policy Institute looks at the implications of the economic downturn in a report called 'The State of Working America'. It zeros in on how Americans are impacted in a variety of ways: income, race, gender and class in a section of the report entitled The Great Recession.
"The Great Recession—which officially lasted from December 2007 to June 2009—began with the bursting of an 8 trillion dollar housing bubble. The resulting loss of wealth led to sharp cutbacks in consumer spending. This loss of consumption, combined with the financial market chaos triggered by the bursting of the bubble, also led to a collapse in business investment. As consumer spending and business investment dried up, massive job loss followed. In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment. This was the most dramatic employment contraction (by far) of any recession since the Great Depression. By comparison, in the deep recession that began in 1981, job loss was 3.1%, or only about half as severe."
"Even after the economy stopped contracting in the summer of 2009, its growth has not been nearly strong enough to create the jobs needed simply to keep pace with normal population growth, let alone put back to work the backlog of workers who lost their jobs during the collapse. In the post-World War II recessions before the early 1990s, it took an average of 10 months for the economy to regain the jobs it had lost during the recession. But after the early 1990s recession, it took nearly two years, and after the early 2000s recession, it took over three-and-a-half years. Unfortunately, the recovery from the Great Recession is following the sluggish pattern of these last two recoveries, but likely with an even longer timeline..."
What is clear, is that those who were most vulnerable before the recession, are suffering most throughout the recession. It is also clear that the unusually slow recovery, owed in part to policies which have aided business recovery but have not yet resulted in a willingness of business to 'get off the sidelines' with their capital and provide access to jobs and money, hurts those most vulnerable most significantly.
The challenge is to develop more policies that incentivize business expansion, job creation, job training and employment that connect people and jobs. The fragile nature of some of our urban centers and the families who live there mired in unemployment, low wage jobs and poverty, is a roadblock to recovery that cannot be ignored.