The Not So Rosy Jobs RecoveryJuly 16, 2015
Coverage of the June job report might leave the impression that 223,000 was a really good number. “Still, over the past three months, hiring has averaged a robust 221,000 per month” (AP). The Administration spun the numbers as usual. Recent monthly figures of 250,000 and 280,000 have been greeted as major triumphs. But to put it all in proper perspective, a look at the recovery from the last “great recession” with a 10 percent unemployment rate, 1980-82, is instructive. From 1983 to 1990, the average number of jobs created was 689,000 per quarter. In contrast, to date in this recovery period, 349,000 jobs were created per quarter to date in this recovery period.
Yes, an average of 221,000 a month over the most recent three months is 660,000 per quarter, but the economy was a lot smaller in 1983 than in 2009. In particular, the over-16 population (eligible to work) was 173,505,000 in 2003 compared to 236,093,000 in the middle of 2009 when the recovery started, 36 percent larger in 2009. Thus, the 660,000 rate of recent “robust” quarterly job creation is relatively modest compared to the available eligible population and is less than the 689,000 average quarterly job production for the entire 1983-90 expansion period.
The average ratio of jobs created to the eligible population was 3.8 percent compared to 1.4 percent to date in the current recovery. To roughly account for retirement, the ratio of job creation to the population aged 16-64 provides a similar picture (4.7 percent vs. 1.7 percent).
Because being a member of the labor force is “voluntary,” the ratio of jobs created to the labor forces was computed, with much the same outcome, 5.9 percent vs. 2.2 percent in the current recovery to date. This recovery has employed a far smaller percent of the available workforce than did the 1983 recovery.