The textbook definition says the Great Recession technically ended in the summer of 2009, after the U.S. gross domestic product stopped contracting and started to expand. However, many Americans continue to feel the aftershocks of the worst financial crisis since the Great Depression as the labor market remains a sore spot for millions of households.
The Bureau of Labor Statistics recently breathed new meaning into the “jobless recovery.” The U.S. economy added only 74,000 jobs in December, the smallest monthly gain in three years and a far cry from the 200,000 jobs estimated by economists. A slow decline in the headline unemployment rate and modest economic growth in recent years has been good enough for the Federal Reserve to dial down bond purchases, but the overall employment situation in America remains sluggish at best.
More jobs were lost in the recent recession than any other post-World War II downturn. Making matters worse, the majority of those jobs have yet to come back. The quality of jobs that have been added to the economy are also a concern. Here’s a a look at 10 charts showing the bigger jobs picture.
1. Unemployment Rates
The headline unemployment rate fell to 6.7 percent last month from 7 percent in November. That is below the peak of 10 percent in 2009, but it took five years for the rate to decline under 7 percent.
Additionally, the U-6 unemployment rate, which includes everyone in the headline rate — plus people who are employed part-time but prefer a full-time position, or want work but have stopped looking — remains stubbornly high at 13.1 percent.
2. Part-Time Workers
The number of people employed part-time because of economic reasons is nearly 8 million. These individuals had their hours slashed or were unable to find a full-time job. They are also one reason for the high U-6 unemployment rate.
The backbone of the U.S. economy and employment used to be manufacturing, but this is clearly no longer the case. The manufacturing sector has been bleeding jobs for decades. The number of employees in the manufacturing sector is near its lowest point since 1946. Over the past decade, more than 2.6 million manufacturing jobs have been destroyed.
4. Employment-to-Population Ratio
Despite the decline in the headline unemployment rate over recent years, the percentage of working-age Americans with a job is under 59 percent, its lowest level since 1983. This ratio will have difficulty improving. The adult population increases by about 200,000 people each month, but the economy has averaged a monthly gain of only 182,000 jobs in 2013.
A growing number of analysts and economists are beginning to realize a quality issue with the jobs being created. Low-wage industries such as leisure and hospitality along with retail have been responsible for a large part of the employment gains. Over the past year, these two industries are responsible for more than 800,000 new jobs. In December, even the health care industry witnessed its first annual decline in jobs since 2003.
Wages and salaries as a percentage of GDP have been declining for over four decades. According to recent data from the U.S. Bureau of Labor Statistics, employees in seven of the 10 largest occupations typically earn less than $30,000 a year. A retail salesperson — the most popular occupation — earned an average of only $25,310 last year. Overall, wages grew only 1.8 percent in 2013.
7. Job Hunt
Financial advisers often advocate an emergency savings fund of around eight months. The simple reason for this is that it takes the average unemployed person about 36 weeks to find a new job. That is below the high of 41 weeks seen in recent years, but well above historical standards.
8. Hours Worked
The typical work week has also seen a dramatic change over the decades. The average amount of annual time worked per employed person in the U.S. has declined from 1,900 hours in 1970 to about 1,760 hours in 2011.
9. Labor Force
A large catalyst for the declining headline unemployment is due to job hunters dropping out of the labor force. The share of working-age Americans who were employed or looking for work sank to 62.8 percent last month, its lowest level since 1978 — a time when fewer women were participating in the labor force. In fact, if the participation rate was closer to its average seen over the past three decades, the headline unemployment rate would be in the neighborhood of 11 percent.
10. Long-Term Unemployment
In December, the total number of unemployed persons declined by 490,000 to 10.4 million. Meanwhile, the number of long-term unemployed, those jobless for 27 weeks or more, was 3.9 million. Those individuals constitute 37.7 percent of the unemployed, and their numbers have shrunk by just 894,000 in the past 12 months.
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