Economic indicators have convinced many analysts that we are emerging from the recession. But no one is forecasting a strong recovery and the latest unemployment numbers are a warning that prosperity may still be a long way off.
In October, the unemployment rate hit 10.2 percent. Since World War II, we have only encountered this level of unemployment once. Those who were looking for work or hanging onto a job in 1982 can remember the difficulties of that recession, and how long it took for recovery to take hold.
The jobs and benefits lost by millions of Americans during 2009 eclipse the evidence that a recovery may be underway. It seems doubtful that confidence can take hold as long as our earning capacity remains so reduced. The days of hardship and uncertainty are still with us.
Although unemployment benefits are more generous today than they were in 1982, the economic landscape is more difficult in many ways. Families are carrying more debt, have less savings, and some find themselves near the end of their earning years without pensions or adequate retirement accounts. These days, the loss of health insurance must be regarded as a potential calamity.
A recession is hard on business and labor alike, but working people are suffering disproportionately. Employers quickly trimmed payrolls as the recession hit, and are expected to let profits accumulate before returning to full employment. These circumstances have required workers to be more productive now than ever, but it will be good news when they are unable to keep up with a rising demand for goods and services.
There are limits to productivity advances, so payrolls of recovering companies will have to grow. As difficult times eventually ease, rising salaries will be tide that lifts the overall economy ”“ or so we hope.
President Obama will convene a jobs summit next month to weigh the options for returning to full employment. He will bring in economists, small business owners, labor leaders and corporate executives to talk about job creation.
It may be that waiting out the economic cycle will turn out to be the route to recovery, but the summit will provide a good opportunity to consider how federal policy on taxes and investment can be adjusted to improve the circumstances of Americans.
No meaningful recovery can take place in the U.S. until jobs are plentiful and incomes are rising. We have had this kind of prosperity before, and perhaps the right policies will hasten its return.
— Questions? Comments? Contact Managing Editor Nick Cowenhoven at nickc@journaltribune.com or City Editor Kristen Schulze Muszynski at kristenm@journaltribune.com.
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