The election is over, but the challenge of putting America back to work remains -- big time. So big time that it's extremely discouraging to economists such as Heidi Shierholz at the Economic Policy Institute. The bottom line? We need 378,000 new jobs a month over three years to get to where we were in employment in December 2007, the start of the recession.
Last week, there was a lot of hand-clapping over the 171,000 jobs reported by the U.S. Labor Department. Yes, 171,000 jobs is a significant improvement, but it's not nearly enough, said Shierholz. She fears the stark reality of the nation's job situation will get lost in premature rejoicing.
Let's do the math: From December 2007 until the worst point, in February 2010, the economy dropped by 8.7 million jobs. Since then, 4.5 million jobs have been added, but a deficit of 4.2 million remains.
Now, here's the killer. Each month, just to stay even with population growth, the economy needs to create 100,000 jobs. So there are 58 months between the start of the recession and now. That's 5.8 million jobs that didn't get created. Add 5.8 million to 4.2 million and you have a 10 million deficit.
"When you are up against a gap like this, 171,000 jobs isn't going to do it," she said.
And then it gets worse from a dig-out perspective.
Say you give yourself a window of three years, to the fall of 2015 to repair the job situation. Figure on 36 months from now, with each month requiring 100,000 jobs to stay even. That's 3.6 million jobs. Add the 10 million deficit and the 3.6 million in stay-even jobs to get 13.6 million. That's how many jobs need to be created to return the nation to pre-recession employment.
Divide that by 13.6 million by 36 months, round it and you need 378,000 jobs a month.
If the nation's payrolls grow at a path of 171,000 jobs a month indefinitely, we'd be keeping up at 100,000 a month, but would have only 71,000 monthly to apply to the 10 million job deficit. At that rate, it would take 141 months -- that's nearly 12 years, until mid 2024, to return us to pre-recession levels.