Buy term paper on The jobless recovery

A jobless recovery is a term that describes the situation of recovery from a recession, when a Growth Domestic Product grow, but the unemployment rate remains low. So if the growth rate of unemployment in a recovery is not positive, then the recovery is jobless.
During the economic slowdown and period of recession in 2001, the USA tried the jobless recovery. In the 2001 recession, 1,6 millions jobs were eliminated, in 2002 more than half a million. So in 2003 Ben S. Bernanke, an American economist, and the current Chairman of the United States Federal Reserve, proclaims “The jobless recovery” at the Global Economic and Investment Outlook Conference. He noted, that such factors as flexible and dynamic labor market, fast growth in demand and slowing down productivity growth should lead to increased hiring and to reduce the rate of unemployment (Bernanke,2).
Today we are to say, that after great financial crisis, the US economy has shown signs of growth, but the situation on the labor market is slow to improve.
So we should point out the bad situation on the nowadays labor market, and find out what’s the current recovery is, and is it jobless as the previous one?
Will the recovery from the current US recession be as in 2001, the so-called “jobless”?
This work takes a closer look at jobless recoveries after 2001 and 2008 years, and finds what common features they have.
Also it is necessary to point out what a jobless recovery today means for tomorrow, and prospects for the recovery after 2010.
Looking back at the recession of the 2001, we should analize the jobless recovery of that period. The main indicators of the labor market underperformance include: the unemployment level (the number of unemployed among the grown-up)and the unemployment rate in percents.

During the 2001 recession the number of unemployed rose from 6 to 8 million, and the number of jobs continue declining during 2002-2003 years. Only in late 2004 we see some job creation, though the prerecession level wasn’t achieved.

Recent estimates from the survey of net monthly employment growth are well above the rate needed, if to adjust labor force growth, but short of the rate needed to close the employment gap.

The unemployment rate increased from 3.9 percent in December 2000, prior to the recession, to 5.4 percent in 2004.

It is not unusual for the unemployment rate to continue growing after the official end of a recession, but in fact the rate would have fallen closer to its prerecession value by this point in the expansion.  A main factor is the very low value of the prerecession unemployment rate (Schreft, Stacey, Singth, 53). 

buy term paper

A high rate of net employment growth, during the economic expansion period, has been caused by a lack of job creation, and not only by an unusually high rate of job destruction.  The decreased rate of job creation is also very likely an important cause of the increased duration of unemployment spells and the decrease in the labor force participation rate.

The Business Cycle Dating Committee of the National Bureau of Economic Research announced at the end of November 2008 that a significant and widespread decline in economic activity had begun a year earlier. December 2007 marks the end of the  economic expansion that began in March 2001,as well as the beginning of the latest recession.

The recovery after the 2001 recession period was the worst for job creation. But will the current slowdown end in a “jobless recovery” as the previous one?

Reports on the labor market during 2008-2009 didn’t show the progress many had hoped for.

As shown in Table 3, employment has steadily declined since December 2007. The number of job cuts intensified starting in 2008.
As expected, during the recession the rate of job destruction increased, and then it fell to a level lower than its pre-recession level. The rate of job creation began to fall well before the start of the recession and then continued to fall during the expansion.
Table 4: Unemployment Rate
Type of data: Percent or rate
Age: 16 years and over

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 4.6 4.5 4.4 4.5 4.4 4.6 4.6 4.6 4.7 4.7 4.7 5.0
2008 5.0 4.8 5.1 5.0 5.4 5.5 5.8 6.1 6.2 6.6 6.9 7.4
2009 7.7 8.2 8.6 8.9 9.4 9.5 9.4 9.7 9.8 10.1 10.0 10.0
2010 9.7 9.7
U.S. Bureau of Labor Statistics
After the long economic expansion that characterized much of the current decade, the nation entered its recession in December 2007. The unemployment rate, which until 2008 was 5%, by December 2008 it exceeded 7.0% and well over 600,000 jobs were lost (according to BLS data derived from the Current Population Survey).
So it’s absolutely evident that the US labor market face a jobless recovery – an upturn in which the economy advance, but no new jobs are created.
The American Recovery and Reinvestment Act of 2009 (Recovery Act) was signed into law by President Obama on February 17th, 2009. It is an effort to save and raise the economy, create or save millions of jobs. The Act includes measures to modernize nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need (The United States Department of labor). The measures are nominally worth $787 billion. The Act includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, spending in education, health care, and infrastructure, including the energy sector, and numerous non-economic recovery items.
So what does a jobless recovery today means for the future?
First of all, the US economy has lost more than 6 million jobs since the recession began in December 2007.
Secondly, the unemployment rate stands now at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. In February, the number of unemployed persons, at 14.9 million, was essentially unchanged, and the unemployment rate remained at 9.7 percent.
Understandable, that all this situation effects our GNP, that in 2009 looks to be lower than predicted by Obama administration – only 11.4 trillion.
But many economists, particularly those who belong to the American Economic Association, at the beginning of the year predicted the nation’s gross domestic product would grow by less than 2% a year during the upcoming decade.
Federal Reserve chairman Ben Bernanke predicted that America’s recession in decades will likely end in 2010.
The Great Recession may be over, but this era of high joblessness is probably just beginning.
Is there a likelihood of a jobless recovery from the current recession? What solutions should be provided?
Of necessity, the solutions must include measures to reconstruct the economy in the short term, to achieve a faster long-term growth; to support the jobless today, and to ensure the creating of new jobs (and new kinds of jobs according to the scientific progress), that can guarantee prosperity in the future. Some more steps should involve support for the unemployed, and employer tax credits or other subsidies to get people back to work faster. And such steps are made according to The American Recovery and Reinvestment Act of 2009.
So the conclusion and forecast are therefore optimistic, and are based on the supporting the economic recovery governmental policy.
Works Cited:
1. Bernanke, Ben. “The jobless recovery.” The Global Economic and Investment Outlook Conference, Carnegie Mellon University, Pittsburgh, Pennsylvania. November 6, 2003
2. Schreft, Stacey, Singth. “A closer look at a jobless recovery.” Federal reserve Bank of Kanzas City, Economic review, 2003
3. The U.S. Bureau of Labor Statistics. www.bls.gov
4. The United States Department of labor. www.dol.gov