More on the recovery. - Democratic Underground

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Sun Mar-06-11 07:05 PM
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More on the recovery.

NELP: A Year of Unbalanced Growth (PDF)

<...>

The backdrop to this report is an economy that is still facing a significant jobs deficit. During the Great Recession, the US lost more than 8.84 million private sector jobs, and to date has only managed to reduce that deficit by 1.26 million. Fully 13.9 million workers are still unemployed, nearly half of them for more than six months. Job creation, then, is still an urgent and immediate need for our economy.

At the same time, given that the last 12 months saw a net gain of more than a million jobs, it is important to begin to track the emerging recovery. We find the following:

In the private sector, there is a striking imbalance between where the recession’s job losses occurred, and where the growth of the past 12 months was concentrated:

Lower-wage industries constituted 23 percent of job loss, but fully 49 percent of recent growth
Mid-wage industries constituted 36 percent of job loss, and 37 percent of recent growth
Higher-wage industries constituted 40 percent of job loss, but only 14 percent of recent growth

The current recovery looks worse than the “jobless” recovery of the 2001 recession, on several fronts:

After a year of positive job growth, the private sector after the 2001 recession had recovered almost half (47 percent) of the jobs it had lost. By contrast, to date the private sector has recovered only 14 percent of the jobs it lost during 2008 and 2009.

The early job growth following the 2001 recession was more balanced than the early job growth following the 2008 recession, with significantly more growth in higher-wage industries.<...>

So 12 months after the Great Recession the economy only managed to create 1.26 million jobs.

Now, about this: "After a year of positive job growth, the private sector after the 2001 recession..."

Is NELP comparing apples to oranges? Here's a chart from the PDF:

The 2001 recession lasted less than a year, ending late that year. It wasn't until 18 months later that the economy sustained net job creation. By contrast, the Great Recession lasted a year and a half, ending in mid 2009. Within months, early 2010, and since then the economy has sustained net job growth.

Summary: It took a year and a half to achieve sustained net jobs after the 2001 recession. Based on the chart, this, "After a year of positive job growth, the private sector after the 2001 recession...." could only refer to the period from late 2003 to late 2004.

It took only eight months to achieve sustained net jobs after the current recession, the worst in more than 70 years. The 12 months of positive job growth refers to the period from early 2010 to early 2011. An equivalent time frame after the 2001 recession would have been early 2002 to early 2003, a period where there was not 12 months of positive job growth. In fact, the chart above shows only one solid and one negligible uptick during that period.

So what period is NELP using to compare to the period from early 2010 to early 2011? Apples to oranges: July 2003 to June 2004.

The analysis gives the impression that this recovery is slower than in 2001, but that's not the case.