Full Job Recovery is at Least Five Years Off
Ah, the good old days -- early 2009, when the White House predicted the jobless rate would not rise above 8 percent. By the end of the year, unemployment was creeping up past 10 percent. In January it went back down to 9.7 percent; but this time, White House officials are not so optimistic, and are predicting unemployment will remain above 9 percent well into 2011.
So how long will it take for us to get back all those jobs we lost during the pasts several years? Fasten your seat belts, readers, because you're in for a long, bumpy ride. Most experts are predicting it will take at least five years. Ten million jobs have disappeared, and even the rosiest of predictions don't foresee more than 95,000 jobs created per month -- and that's after we start adding jobs overall. As of January, we're still losing them on a monthly basis.
Why is it taking so long?
This is a recession that is proving to be unlike any other. Almost 15 million Americans are unemployed right now, with at least six million of them out of work for more than six months. This is definitely the worst downturn since the 1930s, and we'll therefore take longer to recover than we did from the somewhat milder recessions we experienced post WWII -- in the 1980s and in 2001, for example. We're also currently affected by the following roadblocks to complete recovery:
- Washington is bogged down in partisan politics. President Obama is asking for almost $300 billion more for recession relief and job creation, but no one seems to be able to agree which taxes to cut and which ones to raise to fund the jobs bill.
- Credit is still not readily available to small business owners so they can expand their businesses and hire more workers. Until the financial system is completely reformed, banks will continue to hold back on loans, which also affects the next factor.
- Two of the major employment sectors in the United States are still struggling. One is the home construction industry, because banks are not lending, and the other is the U.S. auto manufacturing industry, which many predict will never again reach pre-2007 levels.
- Job turnover has slowed. Baby Boomers, especially, are holding onto their jobs longer because they can't afford to retire. Their savings have been decimated, and many foresee working at least five years longer than they'd planned. That means fewer opportunities for other workers to replace them when they leave the job force.
- Advocates of outsourcing jobs to foreign countries for cheap labor that would bring costs down have not quite figured out how to create and implement policies that would bring those jobs back to the States.
- Consumer confidence has been shaken. Since few are certain of how long they'll be able to keep their jobs, people are saving more and buying and spending less. This creates less demand for goods and services, and forces businesses to shrink and lay off workers in order to survive.
What can you do in the meantime?
This does not mean, however, that if you're out of work now, you'll likely have to wait another five years before you can find a paycheck to call your own. Some entrepreneurs are realizing that rents, prices and professional service costs at an all-time low -- and that this is the ideal time to start a new business or invest in and build up a previously existing one.
Also, some relief funds are managing to squeeze through the bureaucracy and into the hands of the public. The government is creating some jobs, and funding re-training for workers to transition into growth industries and away from troubled sectors; there is funding for auto workers to be re-trained for health care industry positions, for example. [See $225 Million Available Now to Help You Get a Job.]
Throughout history, certain jobs have become extinct, and resourceful workers have found other profitable ways to use their skills. What happened to all those milkmen who used to drop off full glass bottles on your doorstep every morning? What happened to the milk bottle manufacturers, for that matter, when most people started buying their milk in cartons? What happened to those involved in the telegraph industry, and before them, riders for the pony express? The answer: They adapted. Smart workers would do well to figure out a way to do the same, because if they wait around for others to figure it out, they could well be sitting around for another five years.