Big hole to fill in the labor market
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TESS VIGELAND: That jobs reports from the Labor Department was far worse than economists were predicting. They put Carnac the Magnificent’s cards to their foreheads and said 190,000. Instead, it was 260,000 jobs lost. The unemployment rate also rose to 9.8 percent. That’s the highest it’s been in a quarter century. Pretty much no one is betting we’ll stay below 10 percent. And it’s looking like it’ll be a good long while before it’s all over.
Marketplace’s Mitchell Hartman reports.
Mitchell Hartman: Economists basically agree we’re out of recession. That is, as measured by gross domestic product, the economy’s probably growing again. And yet, unemployment keeps getting worse.
Heidi Shierholz: The labor market has fallen into a hole that is surprisingly enormous.
That’s Heidi Shierholz of the Economic Policy Institute. She says, add the quarter million or so jobs we keep losing every month to the eight million jobs that have vanished since the recession began. Then add in all the jobs the economy didn’t create that would have been needed just to keep up with young people entering the work force.
Shierholz: The hole in the labor market is now around 10.7 million jobs. That is what we have to make up to get recovery in the real economy.
It’ll probably be a year or more before employers hire enough new workers to start filling that hole.
Part of the problem is that some old jobs, like in the auto industry, are gone for good, says Ken Matheny of Macroeconomic Advisers.
Ken Matheny: In some areas of manufacturing, while you would expect some cyclical improvement in employment, still, that doesn’t mean that all the jobs that have been lost in the past several years are going to come back. In fact, they probably won’t.
So where might millions of new jobs come from? Art Ayre of the Oregon Employment Department has looked at the prospects in his state.
Art Ayre: And what that shows is a continuation in growth in private education and health services — hospitals, doctor’s offices, dentist’s offices and so forth.
So, along with enough jobs to get the unemployment rate down, we’ll probably get higher tuition and hospital costs, too.
I’m Mitchell Hartman for Marketplace.
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