Employment Picture Not Particularly Rosy

In this morning's Washington Post, Michael A. Fletcher writes about the probability of a jobless recovery, a meme that has been growing in the zeitgeist around Washington lately.

Despite signs that the recession gripping the nation's economy may be easing, the unemployment rate is projected to continue rising for another year before topping out in double digits, a prospect that threatens to slow growth, increase poverty and further complicate the Obama administration's message of optimism about the economic outlook.

The likelihood of severe unemployment extending into the 2010 midterm elections and beyond poses a significant political hurdle to President Obama and congressional Democrats, who are already under fire for what critics label profligate spending. Continuing high unemployment rates would undercut the fundamental argument behind much of that spending: the promise that it will create new jobs and improve the prospects of working Americans, which Obama has called the ultimate measure of a healthy economy.
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Since the recession took hold in December 2007, the U.S. economy has lost 5.7 million jobs, a rapid decline that caught administration and other economists off guard. In recent months, the velocity of job losses has slowed substantially, which, combined with a rising stock market and increases in consumer spending, has offered hope that a recovery is beginning to take hold.

But employers still cut 345,000 jobs last month, while the nation's growing working-age population requires the job market to expand by 125,000 to 150,000 a month just to keep the unemployment rate stable.

The dynamics of the modern economy further dim the employment picture. Job growth was weak for years after the past two recessions, in 1991 and 2001. Employers have grown increasingly slow to rehire workers, and steady advances in technology have allowed businesses to do more with fewer workers.

It's really only a matter of time until that double-digit unemployment number comes out, and there are strong arguments to be made that we are, for most intents and purposes, already there. This means it's very much worth thinking about the jobs meme that has basically taken over the economic dialogue. If a jobless recovery is a strong possibility, crafting an agenda around that meme has become far more politically dangerous. It also means that it's now worth devoting almost every waking minute to figuring out how to avoid such a scenario - or an even share of time fixing it and blaming it on the last guy, which is what FDR was able to do, and what the American people overwhelmingly believe right now.