Niko Karvounis is a policy analyst at the New America Foundation/Next Social Contract Initiative.
For the last few months, many discussions about the recession have centered on the supposed emergence of “green shoots,” or incipient signs of economic recovery. But now even the optimists must admit that the seemingly positive recent developments haven’t initiated a sustained recovery.
Consider a story from yesterday’s Washington Post, “Recovery’s Missing Ingredient: New Jobs,” which rightly points out that – for all the stock market bounces and better-than-expected bank profits – the economy continues to hemorrhage jobs. The Post story speaks to the fact that, due to the nature of this recession, we’ll see persistently high unemployment for a good many months even as other economic indicators such as GDP and inflation settle into desirable levels.
There are a many reasons for such a “jobless recovery,” including the breakneck pace of job loss we’ve seen during this recession, rising productivity that allows firms to maintain output while hiring fewer workers, and fundamental economic changes (such as the implosion of the auto industry and financial sectors) which necessitate additional time to relocate and retrain workers.
Making things worse is the fact that unemployment is concentrated in productive sectors like manufacturing, the very industries that we need to grow in order to move away from a precarious, consumption-based economy.
For an in-depth analysis of the jobless recovery and what it means for our economic future, the New America Foundation/Smart Globalization Initiative will host an event tomorrow from 1:00 pm – 2:15 pm on Capitol Hill.
The event will feature Senator Sherrod Brown, Chairman of the Senate Banking Subcommittee on Economic Policy (D-OH) and Leo Hindery, Jr., Chairman of the New America Foundation/Smart Globalization Initiative, who will discuss the jobless recovery, its threat to our long-term economic health, and potential solutions.
You can also check out the New America Foundation/Economic Growth Program‘s recently published report on the subject.
— Niko Karvounis