2009-10-20 22:30:19 UTC
immigration has now resulted in permanent high unemployment in the
U.S. and a declining standard of living beginning to mirror that of
the Hispanic failed states in the Third World. Is it merely
coincidence that the unemployment rate climbs at the same percentage
of the population as the rising Hispanic population filling our cities
and rural areas? (In fairness, immigrants from India, Africa, Asia,
and the Middle East also take jobs that should belong to American
Higher jobless rates could be new normal
By TOM RAUM, Associated Press Writer Tom Raum, Associated Press
Writer – Mon Oct 19, 2:29 pm ET
WASHINGTON – Even with an economic revival, many U.S. jobs lost during
the recession may be gone forever and a weak employment market could
linger for years.
That could add up to a "new normal" of higher joblessness and lower
standards of living for many Americans, some economists are
The words "it's different this time" are always suspect. But
economists and policy makers say the job-creating dynamics of previous
recoveries can't be counted on now.
• The auto and construction industries helped lead the nation out of
past recessions. But the carnage among Detroit's automakers and the
surplus of new and foreclosed homes and empty commercial properties
make it unlikely these two industries will be engines of growth
• The job market is caught in a vicious circle: Without more jobs,
U.S. consumers will have a hard time increasing their spending; but
without that spending, businesses might see little reason to start
• Many small and midsize businesses are still struggling to obtain
bank loans, impeding their expansion plans and constraining overall
• Higher-income households are spending less because of big losses on
their homes, retirement plans and other investments. Lower-income
households are cutting back because they can't borrow like they once
That the recovery in jobs will be long and drawn out is something on
which economists and policy makers can basically agree, even as their
proposals for remedies vary widely.
Retrenching businesses will be slow in hiring back or replacing
workers they laid off. Many of the 7.2 million jobs the economy has
shed since the recession began in December 2007 may never come back.
"This Great Recession is an inflection point for the economy in many
respects. I think the unemployment rate will be permanently higher, or
at least higher for the foreseeable future," said Mark Zandi, chief
economist and co-founder of Moody's Economy.com.
"The collective psyche has changed as a result of what we've been
through. And we're going to be different as a result," said Zandi, who
formerly advised Sen. John McCain, R-Ariz., and now is consulted by
Democrats in the administration and in Congress,
Even before the recession, many jobs had vanished or been shipped
overseas amid a general decline of U.S. manufacturing. The severest
downturn since the Great Depression has accelerated the process.
Many economists believe the recession reversed course in the recently
ended third quarter and they predict modest growth in the nation's
gross domestic product over the next few years. Yet the unemployment
rate is currently at a 26-year high of 9.8 percent — and likely to top
10 percent soon and stay there a while.
"Many factors are pushing against a quick recovery," said Heidi
Shierholz, an economist at the labor-oriented Economic Policy
Institute. "Things will come back. But it's going to take a long time.
I think we will likely see elevated unemployment at least until 2014."
At best, many economists see an economic recovery without a return to
moderate unemployment. At worst, they suggest the fragile recovery
could lose steam and drag the economy back under for a double-dip
"We will need to grind out this recovery step by step," President
Barack Obama said earlier this month.
Obama and congressional Democrats are having a hard time agreeing on
how to keep the recovery going and help millions of unemployed workers
— short of another round of stimulus spending amid rising voter alarm
over soaring federal deficits.
So far, they've been unable to win even a simple three-month extension
of unemployment insurance for people in states with jobless rates
above 8.5 percent.
The extension easily passed the House earlier this month but is bogged
down in the Senate over disputes over which states would get the
funds. Hundreds of thousands of people have already lost their
benefits or are about to lose them.
The White House credits the president's $787 billion stimulus plan
passed in February for keeping job losses from becoming even worse.
Since Obama took office in January, the economy has lost 3.4 million
Republicans argue that the stimulus program has not worked as a job
producer and is a waste of tax money. And last week, the U.S. Chamber
of Commerce launched a multimillion advertising campaign to celebrate
small business entrepreneurs — and to argue that further government
intervention will not spur permanent job growth.
Chamber leaders called for creation of more than 20 million new
private-sector jobs over the next decade, saying it's needed to
replace jobs lost in the recession and to keep pace with population
"The government can support a few jobs in the short-run" while free
enterprise is the only system that can create 20 million of them, said
Thomas Donohue, the chamber president.
To many economists, such a goal seems unreachable given today's
altered economic landscape.
"It's a new normal that U.S. growth is going to be anemic on average
for years. Right now, the prospect is bleak for anything other than a
particularly high unemployment rate and a weak jobs-creating machine,"
said Allen Sinai, president of Decision Economics Inc. He says he
doubts that unemployment will dip below 7 percent anytime soon.
Many economists consider a jobless rate of 4 to 5 percent as
reflecting a "full employment" economy, one in which nearly everyone
who wants a job has one. After the 2001 recession the rate climbed to
5.8 percent in 2002 and peaked at 6.3 percent in 2003 before easing
back to 4.6 percent for 2006 and 2007.
Will unemployment ever get back to such levels?
"I wouldn't say never. But I do think it's going to be a long time,"
said Bruce Bartlett, a former Treasury Department economist and the
author of the book "The New American Economy: The Failure of
Reaganomics and a New Way Forward."
"The linkage between growth in the economy and growth in jobs is not
what it was. I don't know if it's permanently broken or temporarily
broken. But clearly we are not seeing the sort of increase in
employment that one would normally expect," said Bartlett.