The Notion of A “Recovery” is Nonsense

The jobless recovery is even worse than many think. Jobs not only are not being created, they are being destroyed for the first time in modern history. In every other recovery, the work force grew except for this one. Perhaps it is not a recovery? Perhaps it is the expansion of payments to non-workers?

The following chart from Investor’s Business Daily clearly shows something is terribly wrong:

IBD makes the following points:

• In the 30 months since the recession officially ended, nearly 1 million people have dropped out of the labor force — they aren’t working, and they aren’t looking — according to data from Labor’s Bureau of Labor Statistics. In the past two months, the labor force shrank by 170,000.
• In the past nine recoveries, the labor force had climbed an average 3.5 million by this point, according to an IBD analysis of the BLS data.
• According to the BLS, the “labor force participation rate” — the ratio of the number of people either working or looking for work compared with the entire working-age population — is now 64%, down from 65.7% when the recession ended in June 2009. That’s the lowest level since women began entering the workforce in far greater numbers several decades ago.

Reflecting this drop in labor force participation, according to IBD, would result in a true unemployment rate of 11%. This number does not reflect workers working part=time but wanting to work full-time. Including them would raise the unemployment rate to close to 20%.

To be sure, jobs have been created, just not enough of them. As IBD measures matters:

 Since June 2009, the economy has added 1.4 million jobs, which is below the more than 2 million needed to keep up with population growth and far below the gains experienced at the same point in the previous 10 recoveries — which saw job gains average more than 4 million.

After wasting trillions of dollars that will haunt the economy and our grandchildren long into the future, there is virtually nothing to show for what has been proclaimed a recovery. It is no recovery! Great harm has been done to defer an unavoidable Depression. As a result, the Depression will be worse than it should have been once it arrives.