Four years on, it’s time to start asking the question: Is this the rottenest economic recovery ever? GDP is steadily growing again, but the unemployment rate has been so bad that when it finally dropped below 8 percent last year it was touted as excellent news, despite coming nearly half a decade after the beginning of the recession. A year later, the recovery shows no signs of speeding up: unemployment today stands at 7.4 percent.And even that number may not be as solid as it looks. At the New York Times’ Economix blog, David Leonhardt compares the graphs of the unemployment rate and the labor participation rate since the beginning of the recession and finds that unemployment is only going down because people are dropping out of the workforce, not because we are creating more jobs:
Yes, the unemployment rate has fallen. But almost the entire reason it has fallen is the drop in the number of people in the labor force — either working or actively looking. As Binyamin Appelbaum has noted, the share of adult Americans with jobs is essentially unchanged over the last three years.In a brief new report from Express Employment Professionals, a staffing firm, the company’s chief executive, Bob Funk, refers to the problem as “the great shift.” This shift long predates the recent financial crisis, too. The labor force participation rate peaked more than a decade ago.
This is awful news, and there’s plenty more where it came from. The Washington Post reports that the number of families in which at one or more parent is out of work rose by 33 percent over six years, and the WSJ found that the number of young adults living with their parents is spiking, driven in large part by difficulty finding work. Years of “recovery” just doesn’t seem to be doing much to solve the biggest economic problem of all: jobs.This needs to change. We’d like to see the President call in small business leaders and develop some strong pro-jobs policies. In the meantime, we welcome suggestions from readers about what the government can do to encourage new hiring and new jobs.