Aftermath of the Great Recession

Apr 06

Aftermath of the Great Recession

The National Bureau of Economic Research (NBER) declared the Great Recession, as it is now being called, started in December of 2007. The United States has officially lost 7.245 million jobs since then. This figure does not take into account additional jobs that are needed to employ the United States increased population, but it does include jobs added over the 3 year time period. NBER has also declared the Great Recession to be over, but if that is true, why isnt everyone who lost jobs going back to work?

The answer is a little complex but explainable. The official unemployment numbers as of March 2011 stands at 8.8%, whereas, at the height of the Great Recession in 2009, the unemployment rate was a little over 10%. From those figures, it would appear we are gaining ground, but the figures do not take into account many important factors like how many permanent jobs were lost, the increasing population, the labor participation rate, and the employment to population ratio.

The labor force participation rate represents the proportion of the civilian non-institutional population that is in the labor force. Startling, as of March 2011, the labor participation rate is increasingly becoming lower. The rate currently stands at 64.2%. In December of 2007 at the beginning of the Great Recession, the rate was 66%. The highest civilian labor participation rate since they began measuring it, measured in January of 2000, was 67.3%. What this means is that there are currently around 4.25 million people in the United States who cannot be accounted for in the official unemployment numbers. These unaccounted people most likely need a job and cant find one or unwilling to work for what jobs they might attain.

The employment to population ratio is similar to the labor participation rate and represents the proportion of the civilian non-institutional population that is employed. Amazingly, that ratio stands at 58.5% which is only 0.1% above record lows. The employment to population ratio numbers include known jobs compared to the population. Unemployment figures are based on people who have been counted looking for a job. Basically, what this means is these figures support the idea there are more people unaccounted for that have been lost in the unemployment figures. The loss of these people are a loss of real jobs and not a loss of employment due to retirement or such.

Currently, the official tally for permanent jobs lost since the beginning of the Great Recession stands at 7.245 million. The highest figure for permanent job loss was near 8.75 million in January of 2010, but with the economy improving, new jobs have been created to replace the losses. Unfortunately, the new jobs are not coming as fast as they were lost, and there is no indication the jobs will all be replaced.

Add to all of these statistics the fact our population continues to grow, either by births or by immigration, and you have a recipe for why everyone may not be going back to work. The jobs are simply not keeping pace with all the developments, so there is a growing number of people who have stopped looking for work.

Currently, it would take creating over 11 million new jobs in the United States to put us back in the same state of employment we were at the beginning of the Great Recession. To return to the economic conditions of that time, the new jobs would have to have the same pay value as they did back in December of 2007. That means inflation would have to be taken into account when pay scales are compared. Unfortunately, most new jobs are being outsourced these days, so the future labor picture looks bleak. If a person is fortunate enough to find a job, the job usually doesnt pay what it use to pay.

Loss of income is the greatest cause for bankruptcy. Living expenses occur whether you have a job or not. The aftermath of the Great Recession may very well mean economic recovery may be a long time coming, and bankruptcies are going to be predominant for the foreseeable future.

If you are part of the aftermath of the Great Recession and considering bankruptcy protection as an option, you are going to need a bankruptcy lawyer in order to help you understand the complex bankruptcy laws and how they might apply in your particular situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Rochester, New York, contact us here today at . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

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