The Rough Road Back

There are roughly 14.5 million unemployed in the US, another 9.4 involuntary part-time workers, and 2.5 million marginally attached workers. The latter category is basically people who would take a job if they could find one but haven't looked in the past four weeks. Plus younger people who have gone back to school because they can't find a job.

For the part-time workers to get full-time jobs we need to create (guessing) at least 4-5 million full-time jobs to give them the hours they want. That is at least 11-12 million jobs we need to have to get back to the unemployment levels of 2007 (assuming that about 7.5 million jobs gets us to 5% unemployment).




Now, we need about 1.5 million jobs every year to cover new people coming into the labor force - or that is what history and economists tell us. I am not so sure that number is not itself history. What group of people has seen its unemployment level go down? People over 55! My generation is not retiring as planned and indeed is going back to work. Retirement is somewhere in the future in a world where stocks have gone nowhere for ten years and housing values have collapsed.

We may need more than 1.5 million jobs a year (125,000 a month) if Boomers aren't going to quit. But let's assume they do, for the sake of argument.

That means in the next five years we need more than 19 million jobs to get back to under 5% unemployment. That's almost 4 million jobs a year or more than 325,000 a month, each and every month. Or 27 million jobs to get back there in ten years, or almost 230,000 jobs a month each and every month.

No recessions allowed. No crisis can show up. And the economy needs to grow at 3.5% plus on average to really give us jobs. Below are the employment statistics for the last 20 years. Straight from the BLS web site into my Excel spreadsheet. Notice that with the exception of 1994 and the last quarters of 1997 and 1999, we had no consistent quarters of 300,000-plus jobs a month. Also note that the economy grew (if memory serves) at 3.3% in the '90s and at 1.9% in the last decade. That marginal growth makes a big difference.

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