Rate This Page:Back in Black: What's True About the Job Market Recovery
Although no longer reeling, Americans are still feeling impacts of the global economic crisis that occurred just before President Barack Obama set foot in the White House. Caused by the rapid decline of the housing market, the crisis felled numerous banks, lenders and employers within a matter of months. Companies and financial institutions that survived the crisis froze wages, stopped hiring workers and put the clamps on new loans. By October 2009, the U.S. unemployment rate was 10.1 percent - the highest rate in 26 years - and millions of people were left struggling to make ends meet. Since then, numerous policies have been enacted to stimulate the economy and rebuild the job market. The success of these policies remains hotly debated, but what can't be argued is that progress has been made - but how much progress? Separating the myths and facts about the job market recovery can provide some clarity to that question.6 Active Myths | Suggest a Myth
Regardless of your political leanings, it's silly to argue the economy is in worse shape than it was six years ago. The unemployment rate is down to 5.6 percent - better than it was when Obama took office - and 2014 was the best year for new hires in 15 years. People who fixate on the economy going downhill aren't fixating on hard data.
This is true. Only 62.7 percent of working-age Americans are participating in the job market, which is the lowest participation rate since 1978. Part of the reason for this is that people who had hard times finding jobs haven't re-entered the workforce. Young people may have opted to pursue additional schooling rather than look for jobs, and the expansion of social service programs (such as food stamps) may also be keeping people from working. In addition, scores of American households had to rethink their finances in the wake of the financial collapse, and some families may no longer need two working parents to pay the bills now that they've reduced their living expenses for one breadwinner.
Most American workers who are struggling to find work don't have a college education and/or they're under the age of 25. College-educated adults are having much easier times finding work now. In fact, the unemployment rate for people over 25 who hold college degrees is right around 4 percent, which is significantly better than the overall unemployment rate.
Working Americans have just 3.2 percent more disposable income now than they did in mid-2009, which marked the start of the economic recovery. This pales in comparison to wage increases during previous periods of economic recovery. This is a reflection of businesses keeping costs down by freezing wages and refusing to create new positions. And with so many workers still sitting on the sidelines - keep in mind the workforce participation rate is the lowest it has been since 1978 - this is still very much an employer's market.
Despite the nation's economic gains since early 2009, the economy is still lagging behind where it likely would have been had the recession not taken place. The U.S. economy is still missing roughly 5.6 million jobs - some of those are jobs that were lost during the recession, and others are jobs that would have been created by now had the economy been healthy.
Full economic recovery is closer than many people think. If new job and hiring trends from 2014 continue through this year, the economy is projected to be fully recovered by August 2017. If the market continues based on last November's hiring numbers, recovery would happen a full year sooner. Unless something unexpected happens, the U.S. economy is expected to be whole much sooner rather than later.
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