The Soft Bigotry of Low Employment Expectations

[cthulu2016]

This is not about Obama-good or Obama-bad or propagandizing the upcoming election one way or another. It's just math. A sort of math that ought to drive policy. Bottom line: We just had the best employment report in ages but even if all employment reports going forward were this good we would still have destructively-high unemployment for years and years and years.

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Paul Krugman
January 6, 2012, 3:42 pm
The Soft Bigotry of Low Employment Expectations

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Obviously it’s better than we’ve been seeing. But we need much faster job growth; it says something about how beaten down we are that this is considered good news. Let me give two back-of-the-envelope ways to think about how inadequate 200,000 jobs a month is.

First, note that there are still about 6 million fewer jobs than there were at the end of 2007 — and that we would normally have expected to have added around 5 million jobs over a four-year period. So we’re 11 million jobs down — and we need at least 100,000 jobs a month just to keep up with working-age population growth. Do the math, and you’ll see that it would take 9 or 10 years of growth at this rate to restore full employment.

Alternatively, note that during the Clinton years — all 8 of them — the economy added around 230,000 jobs a month. As it did that, the unemployment rate fell about 3 1/2 percentage points — which is about what we’d need from here to get back to something that felt like full employment. Again, this suggests that we’re looking at something like a decade-long haul to have full recovery.

So yes, this is better news than we’ve been having. But it’s still vastly inadequate.

http://krugman.blogs.nytimes.com/2012/01/06/the-soft-bigotry-of-low-employment-expectations/

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[cthulu2016]

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