While many economists believe that the economy is now on a path toward recovery from the Great Recession, job growth during the so-called “recovery” has been tepid. California gained 98,700 nonfarm jobs during the first five months of this year – a drop in the bucket considering that the state lost nearly 1.4 million jobs between July 2007, when employment last peaked, and December 2009, when employment bottomed out.
Even more troubling is the fact that the vast majority of recent job gains were in temporary positions. Traditionally, growth in temporary help jobs following a downturn has been a harbinger of permanent hiring. This time, however, most of the temp job gains were due to the 2010 Census – jobs that weren’t expected to lead to permanent positions. In fact, California lost 27,600 jobs in June 2010 – the first month of job loss in six months – almost entirely due to the fact that many temporary Census jobs ended.
But let’s be optimistic for a moment and assume that the recovery kicks into gear this month. How long would it take to return to pre-recession employment levels? An analysis released this week by the Center for Economic and Policy Research (CEPR) sought to answer this question. Assuming that from July 2010 going forward the national economy adds jobs at the same pace as the fastest four years of growth during the 2000s, the CEPR estimates that employment wouldn’t return to pre-recession levels until March 2014. Yet this wouldn’t represent full recovery from the recession given that the working-age population grows every year, adding to the number of individuals who want jobs. Accounting for projected growth in the workforce, the CEPR estimates that the nation won’t fully close its jobs hole until April 2021. It could take even longer to fill in California’s jobs hole, given that the recession took a greater toll on the state’s job market.
Certainly, more optimistic scenarios assuming a faster pace of job growth are possible, but the way the recovery is panning out doesn’t seem to warrant greater optimism. The bottom line is this: Barring further recovery efforts by Congress, high rates of unemployment are likely to be a persistent feature of both California’s and the nation’s economy well into the next decade.
— Alissa Anderson