Monday, December 28, 2009
A Decade Of High Unemployment
The liberal media is trying to protect Protect President Obama from future criticism by saying that Americans in the next decade ahead could be a brutal one for unemployed Americnas and for people hoping for pay raises. At best most economist say, it could take until the middle of the next decade for the nation to generate enough jobs to drive down the unemployment rate to a normal 5 to 6 percent and keep it there. At worst, that will not happen until much later, perhaps not until the next decade. The deepest most enduring recession since the 1930's has battered the American workforce. The unemployed number 15.4 million. The jobless rate is 10 percent. More than 7 million jobs have vanished. People out of work at least 6 months number a record 5.9 million. And household income, adjusted for inflation, has shrunk in the past decade. Most economist say it could take at least until 2015 for the unemployment rate to drop down to a historically more normal level of 5.5 percent. and with the job market likely to stay weak, some also, see another decade of wage stagnation. Even though the economy will likely keep growing, the pace is expected to be plodding. That will make employers reluctant to hire. Further contributing to high unemployment is the likelihood of more people competing for jobs, baby boomers delaying retirement and interest rates edging higher. All this would come after a decade that created relatively fewer jobs: a net total of 464, 000. By contrast, 21. 7 million new jobs were generated between 1989 and 1999. Economist, David Levy, Chairman of the Jerome Levy Forecasting Center, says the country faces a new era of chronically high unemployment averaging 8 percent or more over the next decade. Levy thinks the new abnormal also means average pay will dwindle, along with consumer prices. That would make it harder for households to pay down debt, he warns. By the Federal Reserve reckoning, the jobless rate could remain as high a 7.6 percent in 2012. and it would take two or three years after the job market to return to normal, the Fed says.It is possible jobs won't return to pre-recession levels at any point over the next 10 years, Levy said. That's mainly because the economy recovery, sluggish by historical standards, isn't expected to regain vigor over the next few years. as a result, companies will be in no rush to ramp up hiring. Other analyst think that the economy will recover the jobs wiped out by the recession in 2013 and 2014 but that the unemployment rate will stay high. They note that the healing economy will cause more people to stream back into the labor force, vying for too-few jobs. In addition baby boomers whose retirement accounts shrunk could put off retiring and stay in the workforce much longer. That would leave fewer positions available for the unemployed. Other contributing forces- businesses squeezing more work from employees they still have and relaying more on part-time and overseas help have intensified. And record high federal deficits and the threat of inflation could help drive up interest rates, which could hobble growth and and restrict job creation. all those factors could combine to keep unemployment high. It will be the mother of all jobless recoveries,"predict economic historian John Steel Gordon. on the other hand it's possible that some technological innovation not yet envisioned could create a wave of jobs. Yet at he moment, most economist are not betting that any such breakthroughs will rescue the labor market. The last time the jobless rate reached 10 percent, in the early 1980's, it took six years to bring down to normal levels. Unemployment rate hit a post-World War II high of 10.8 percent at the end of 1982 as the country was emerging from a severe recession. The rate fell around 5 percent in 1988. It took less than two years for the number of jobs to return to it's pre-recession levels. Some economist think that the jobless rate might have already peaked at 10.2 percent in October. But most economist predict the rate will peak around 10.5 percent by the middle of next year. They liberal media is trying to protect the "Messiah".