Jan 11, 2010
Many had hoped that December 2009 would restart job recovery. But if the economic data of the past year is any indication, it would seem that full recovery is a long way off. True, the banks might be more stable today than several months ago but the recession’s impact on individual life and families will take years to restore, if ever. The endless string of job losses in the last two years has left a bad taste in everyone’s mouth, especially to the people that experienced it firsthand.
Currently, the unemployment rate is hovering at 10 percent. It might improve slightly although economic experts warn that it has a high likelihood of staying uncomfortably high in the near future. More worrying though is that some analysts even suggest that the job market cannot recover from the 7.2 millions job cuts it suffered from since 2008 before the next round of economic problems.
Unemployment to Stay High, and Keep Going Up
Lakshman Achuthan from the Economic Cycle Research Institute said that “the problem is recovery doesn’t mean recovered.” This is because while growth is expected, it will be slow. It can take up to 10 years before the 7 million jobs lost in less than 2 years are recovered. In addition, it should be noted that even if employers add to their payroll, the economy needs to generate 100,000 jobs in a single month just to keep up with the population growth.
The economy should also be prepared a large pool of out-of-work individuals. Majority of these 6-million strong workforce have been laid-off during the recession. While they have been discouraged recently, there is a good chance they will enter the labor force again once the situation improves. Their reentry will increase the unemployment rate. The job recovery will not be explosive. At best, the unemployment problem will be resolved in several years.
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- Recent Credit Crisis Effects on the world