This graph tells the story:
(Hat Tip: The Atlantic)
Business editor at The Atlantic Derek Thompson:
The labor market is in full-blown recovery mode right now, with the economy adding more than 200,000 net new workers each month for the past three months. At this rate, we’ll close the jobs gap in roughly … eight years.
Yep, that is the conclusion from Michael Greenstone and Adam Looney at the Hamilton Project. Today the country faces a 11 million-person jobs gap. This “jobs gap” represents the number of jobs that the U.S. economy needs to return to pre-recession employment rates while also (this part is key!) absorbing everybody joining the labor force.
It’s not just enough to make jobs for everybody seeking work this year. We also have to account for the millions of people joining the workforce over the next decade. Filling the jobs gap is like filling a bucket that gets deeper every minute. How much deeper? Greenstone and Looney balance an influx of immigrant workers against the retirement of the baby boomers and conclude that labor force is likely to expand at a slowing pace. Before the Great Recession, it was growing at about 130,000 people per month. In the next few years, it will slow to 90,000 a month, they project.
Our current rate of 240,000 new jobs-per-month is better than the best year in the 2000s. But it’s still not fast enough to get us to full employment even by the end of the next presidential term.
Will this dynamic change if someone who knows what they’re doing gets elected president?
We like to think so, but I’m not so sure. Removing regulatory obstacles, lowering taxes, getting rid of Obamacare, and not declaring war on the productive members of society will certainly be an improvement. But we are in such a huge hole — the Grand Canyon of jobs deficits — that the next president even if he’s not named Barack Obama may find the jobs problem just as intractable as his predecessor.
We were able to pull ourselves out of previous recessions largely because “the next big thing” propelled the creation of companies and jobs. The computer revolution, the high tech boom, the internet bubble — all drove the creation of millions of jobs, created entirely new industries that spurred the economy forward.
And today? We’ve been promised a bio-tech revolution that is still on the horizon. We’ve been assured of an energy revolution, but this is slow motion process with stops, starts, wrong turns, and the big fat butt of government getting in the way trying to direct it.
Building a better mousetrap might create a single, successful company but the cutting edge industries of the future that promise to employ millions are just that — still in the future and won’t move from dream to reality anytime soon.
That’s why we might be stuck in this rut for 8 years no matter who sits in the Oval Office on January 20, 2013.