Transcript The Recession: Accelerating the New Economy

The Recession: Accelerating the new economy
Anthony Carnevale
September 8, 2011
The worst of the recession is over. Non-farm payroll employment
has slowly picked up with positive gains since October 2010.
Job losses and recovery during last 3 recessions
('000)
600
1
3
5
7
9
11
Number of months
13 15 17 19 21
23
25
27
29
31
33
35
400
recession 1990
200
103
0
-200
-400
-306
Recession 2001
-325
-600
-800
-1000
-779
-212
Current recession
The recession was bad, but, like other recessions, growth has
resumed.
Employment growth is not keeping up with GDP growth, but we
project that it will catch up by 2018.
156,000
15,000
Nonfarm payroll employment ('000)
Real GDP (Chained $2000)
14,000
151,000
13,000
Real GDP
(Billions of dollars)
146,000
12,000
141,000
11,000
Employment
(thousands of jobs)
10,000
Jobless
Recovery
136,000
9,000
131,000
8,000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
The year 2010 added 1.3 million private sector jobs to the
economy, the strongest private sector job growth since 2006
0.4%
0.2%
-0.4%
-0.6%
-0.8%
Oct-10
Dec-10
Apr-10
Oct-09
Apr-09
Oct-08
Feb-08
Aug-07
Feb-07
Aug-06
-0.2%
Feb-06
0.0%
Unemployment rates look very different based with
postsecondary credentials.
20.0%
Jul 81-Nov 82
Nov 73-Mar75
Mar 01-Nov 01
Recession
16.0%
Dec '07present
Jul 90-Mar91
Less than 4 years of
High School
Jan 80-Jul 80
12.0%
4 or more years of
High School, no College
8.0%
4.6%
All
4.0%
2.9%
Some college, 1-3 years
2.9%
BA and above
1.3%
0.0%
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Demand for postsecondary education has increased, and will
continue to increase during and after the recovery.
Source: Authors’ analysis of March CPS data, various years; Center on Education and the
Workforce forecast of educational demand to 2018
Meanwhile, the wage premium paid to college graduates has
continued to rise. This is an indication of a shortage.
Postsecondary-educated workers now earn almost 80% of the
nation’s wages.
Wage and Employment Shares by Education (25-65)
High School Dropout
High School/GED
Some College/AA
Bachelor's and higher
23%
30%
34%
51%
19%
19%
31%
37%
26%
34%
26%
22%
18%
17%
9%
1980 Employment
1980 Wages
2009 Employment
5%
2009 Wages
The nation’s states vary in the share of wages earned by
postsecondary-educated workers.
84-90%
78-83%
72-77%
66-71%
60-65%
The painful process of structural change is altering the pattern of
employment by industry– as it has in past recessions. The
structural change is favoring workers with more education.
Several key industries will lose most of their
postsecondary-educated workers with the Baby
Boom.
1981 Recession
2.8 million net jobs were lost between July 1981 and November 1982.
By October of 1983 the economy restored those 2.8 million jobs lost from the recession, but
manufacturing never recovered
Net Job
Losers
Net Job
Gainers
1990 Recession
1.2 million net jobs were lost between July 1990 and March 1991. By January 1993, the
economy restored 1.2 million jobs lost from the recession but the distribution by industry favored
services
Job Losers
Job Gainers
2001 Recession
1.6 million jobs were lost between March and November of the 2001 recession. By January
1993, the economy restored 1.6 million jobs lost from the recession but the distribution by
industry favored services
Job Losers
Job Gainers
The Great Recession
7.3 million jobs were lost since this recession began in December '07 and ended in June '09.
Professional and Business Services and Education and Health have shown net gains overall.
These patterns of structural change will continue
through 2018 and beyond.
Job Losers
Job Gainers
Even in declining industries there will be job openings.
Job
Losers