The job market was never expected to be as weak as it is today. At least, not by the federal government. The routine employment dips that have become part of the natural evolution of the nation’s economy were never supposed to last this long. But something funny happened on the way to the nation’s economic recovery. It didn’t happen the way the government expected it to.
Today, the nation’s unemployment rate is 9.6 percent, and 14.8 million people are counted as being out of work. More than 40 percent of those people have been out of work longer than six months.
In California, the job situation is even more dire. During the first seven years of the 21st Century, the state’s unemployment was as low as 4.8 percent and only hit 7 percent in one month. But since reaching the 7 percent mark again in June 2008, unemployment has been rampant in California.
It first hit double digits in February 2009 and has maintained that level for 22 straight months. This was never supposed to happen. At least the government didn’t think it would. But it has, and it’s going to linger with us for a long while.
The current recession has caused employers to eliminate 8.4 million jobs nationally over the past couple of years. Job loss during recessions is nothing new. It happens because companies struggle, downsize, and try to cut costs anyway they can. When things get better &mdash usually in a few months &mdash those same companies add jobs. That’s the historical track record of recessions in the United States.
But let’s look at today’s situation. Employers haven’t been eager to expand their payrolls even as the worst of the recession seems to be over. Only 1 million of the 8.4 million lost jobs have been recovered. So, what we are left with is an economy that is gradually gaining its footing but not adding jobs. That means the companies get healthier, shareholders get a better return on their investments, and individuals are left to scramble for the jobs that already exist.
The addition of jobs is a necessary component of any economic recovery. No one understands this better than the nation’s chief moneyman Ben Bernanke. As chairman of the Federal Reserve, it is Bernanke’s responsibility to make structural changes in our economy that promote a stable financial world. But Bernanke is not a magician. He can’t force employers to hire people. All he can do is guide the economy and hope that employers assume their traditional role and expand the economy by adding jobs.
The trouble is, times are different these days. Employers have been scared by the latest recession. Some have closed their doors and others &mdash giant corporations and tiny mom and pops &mdash have struggled to remain in business. Those factors have caused them to be a little less trusting of the economy and more cautious when it comes to adding jobs.
Bernanke says this creates a frustrating scenario for economists and lawmakers. He says the economy may be recovering slowly, but if employers don’t hire more workers, the recession will linger on, perhaps for years.
Today, California has civilian employment of 15.9 million workers, nearly the same number of jobs it had in January 2000. Jobs are the missing component in this economic recovery. But that’s not what the government expected.