For many months now, politicians, economists and regular taxpayers have been following macroeconomic reports with uneasiness. Recently, however, more attention is being paid not to the GDP data, but primarily to the reports relating to the job market situation.
Not without reason. For a couple of months now, we have been observing symptoms indicating the end of the recession. Technically, the recession is now over. Nonetheless, the current recovery in the economy is not accompanied by a dramatic improvement in the job market. There is fear that in 2010 unemployment will only minimally decrease, with many consequences to follow. The fact that a huge number of people will be searching for jobs will prevent those who have jobs from asking for a raise. Hence it will be impossible to expect an increase in real earnings.
The data released last Friday once again brought reasons for concern. The nationwide unemployment rate at 10 percent in December – according to the Labor Department – had not changed since November 2009. That, however, is not what we should worry about now. In the final month of last year, the job market shrank by another 85,000 positions, while it expanded only minimally by 4,000 in November. Therefore, the balance of the recession is scary. In 2009, the American economy lost 4.4 million jobs, and since the beginning of the recession in December 2007, over 8 million. It is worth noting that the official unemployment indicators underestimate the real magnitude of the phenomenon. The data does not account for the individuals who have ceased active job searching and are not registered as unemployed. Taking into account the estimated number of people with full-time jobs, the part-time employment rate, or underemployment, is higher than 17 percent and shows a rising trend.
The market situation worries millions of people who are coming to the realization that the jobs they have lost will not be brought back and that they may face the need to switch to another career.
The situation worries politicians too. High unemployment is a major reason why president Obama's poll numbers are declining. At the beginning of his term, he had 70 percent support; now, it has gone down to 50 percent. Support is falling and dissatisfaction with the present market situation is rising, in spite of the fact that economists had been warning all along that "stimulus packages" would not stop the increase in the number of unemployed.
The scenario of "economic recovery without jobs" cannot possibly appeal to anybody. The job market situation will certainly be one of the main topics of this year's midterm election campaigns.
We can only hope that politicians and economists will manage to find solutions that will allow the regular taxpayer, not only big corporations, to benefit from the economic recovery.
