Job recovery may take at least 7 years
February 10, 2010
Saw an interesting but frightening news article at the Asian Wall Street Journal the other day. I had the printed version but I can’t find the online version of the article so I’ll just explain it here.
Basically, the Asian Wall Street Journal is saying that based on their research, it might take at least seven (7) years before job losses due to the economic recession will recover. This is based on the experience of the global economy in past recessions.
The research identified the “Duration” or the time it took jobs lost during the recession to return to its pre-recession level. “Peak job loss” is the estimated maximum number of jobs lost during the recession.
The scary results:
January – July 1980 recession
- Peak Job Loss: 0.97 million jobs
- Duration: 10 months
- One year after this recession ended and eight months after jobs returned to their prerecession level, another recession started
July 1981 – November 1982
- Peak Job Loss: 2.84 M jobs
- Duration: 27 months
- Two years and three months went by before the pre-recession job level was reached
July 1990 – March 1991
- Peak Job Loss: 1.58 M jobs
- Duration: 30 months
- The recession was short but the job level was not restored until two and a half years after the recession began
March 2001 – November 2001
- Peak Job Loss: 2.68 M jobs
- Duration: 46 months
- Recession lasted for only 8 months but it took nearly four years before jobs returned to their pre-recession level
December 2007 –
- Peak Job Loss: 8.42 M jobs
- Duration: 25 months and counting
- According to the Wall Street Journal, it would take more than seven (7) years to regain the level of employment at the start of recession if jobs returned at the average rate at which they have been added in the previous expansion
In 2001, more than 2.68 million jobs were lost and it took almost four years before the job level returned to its pre-recession state.
What’s frightening is that in the most recent recession, job losses are more than four times as in 2001, which is why the Wall Street Journal predicts it would take at least 7 years before jobs will return to its level prior to the 2007 recession.
Pretty scary info, especially to those who have lost their jobs and who are still looking to find a new one.
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