By Bill Wilson — In this recession, the economy has lost a net 3.4 million jobs from its 2008 peak that have not yet been recovered. Meanwhile the working age population has grown by more than 11.1 million since then — creating a 13.5 million and widening jobs gap that will not be filled easily no matter who wins the election on Nov. 6
At the Oct. 3 presidential debate, Barack Obama tried to put a nice spin on this dismal situation, claiming millions in private sector jobs growth in the past 30 months. But this is false comfort.
Since the job market’s bottom in Dec. 2009, the meager jobs growth we are currently seeing at about 150,000 a month is still not keeping up with population growth of about 200,000 a month.
Therefore, it is had little effect on the unemployed rate, which had been above 8 percent for 43 straight months, the longest period of sustained high unemployment since the Great Depression. 7.8 percent is still not where we need to be.
For new entrants into the workforce, the hiring prospects out there are particularly grim, especially for recent college graduates, about half of whom alarmingly cannot find work according to a Rutgers study.
Bureau of Labor Statistics data bears this out. Since Jan. 2009, the labor force participation rate of college graduates has dropped significantly — from 77.6 percent to about 75.9 percent today. That accounts for about 1 million graduates who should have entered the labor force upon graduation, but didn’t.
Another 1.58 million with some college or an associate’s degree who should have also entered the labor force are nowhere to be found.
Together, that means 2.6 million Americans post-college have promptly joined the ranks of the unemployed. That’s at a rate of 59,581 a month or 714,000 young Americans a year who are falling through the cracks — creating a lost generation.
All of which means the jobs picture is simply going from bad to worse. We’re still bleeding.
To get out of this hole, the economy will need to produce in excess of 200,000 jobs a month just to begin eating into 13.5 million jobs gap and significantly reduce the unemployment rate. But this will not be easy. Even if the economy were to suddenly start creating 400,000 jobs a month, it would take nearly six years just to get back to full employment.
At the current 150,000 new jobs a month, we’ll never get there.
That is why whoever wins in Nov. will have their work cut out for them to make it more conducive for businesses to set up shop here as opposed to overseas. We’ll need to lower or eliminate the corporate tax, unwind unnecessary regulations in health care, the environment and labor, and strengthen the dollar to make it cheaper to do business here again.
In the meantime, systemic, high unemployment creates a tremendous political challenge for Obama. It is he who must face the 22.7 million Americans who can’t find full-time work at the polls, plus 5 million more who have simply given up.
These disenchanted may no longer be willing to give Obama the benefit of the doubt and will likely find themselves with a little extra time on their hands on Nov. 6 to add one more person to the ranks of the unemployed.
Bill Wilson is the President of Americans for Limited Government.