Editor at TIME Magazine. Host of CNN's GPS: Sunday @ 10am and 1pm ET in the U.S. Blogger at CNN.com/GPS.
1648 days ago
U.S. gross domestic product (GDP) has returned to where it was in the second quarter of 2008, before the worst downturn of the great recession. Annual GDP is back over $13.3 trillion (in 2005 dollars), according to new data from the Bureau of Economic Analysis. So economic output is back. But why aren’t jobs?
As Byron Auguste of McKinsey Global Institute explained in our GPS special Getting Back to Work, recent recessions are different. Each economic downturn has had a lag between when GDP recovers to pre-recession levels and when employment catches up. But as the chart above shows, for much of the last century this lag was about half a year. At most it was eight months. But something changed starting with the 1990 recession, which had a lag of 15 months, more than double the length of the 1981 recession.
The recent great recession lag has been longer still. At current job growth rates it will take five years for employment to recover.
What explains this change? Globalization is creating more competition for the U.S. workforce. Automation and technology is raising productivity per worker while requiring fewer workers overall. There are more reasons we explore in the special (http://tinyurl.com/gettingtowork), and I'd love to read what you think is causing this change.