Note: Job losses in June and July 2010 are mostly due to the loss of jobs by US census workers. During those months, private-sector employment grew.
According to the Bureau of Labor Statistics, 8.8 million jobs have been destroyed since the recession began.
Employment paying between $14 and $21 per hour made up roughly 60% of those lost during the recession in the United States, but they only made up about 27% of jobs gained during the recovery until mid-2012. Lower-paying employment, on the other hand, accounted for nearly 58 percent of the jobs reclaimed.
How many people were laid off as a result of the Great Recession?
The Great Recession, the worst economic slump in the United States since the Great Depression, has now been a decade in the making. 1 Starting in December 2007, the unemployment rate soared from around 5% to 10% in less than two years. More than 15 million individuals were unemployed in late 2009. According to the Current Population Survey (CPS), total employment fell by 8.6 million people, or about 6%. However, the economy and labor market in the United States began to improve in 2010. The unemployment rate had dropped to 4.1 percent by December 2017. Employment has increased by 16.0 million, to a level that was nearly 5% higher than in November 2007. However, not all labor market indices in the United States had recovered to pre-Great Recession levels. The number of long-term jobless people, particularly those who had been unemployed for a year or longer, remained high. The number of people working part-time unwillingly remained high. Long-term trends, such as the drop in labor force participation, also persisted during the recession and recovery. This article examines how the U.S. labor market has recovered from the Great Recession using CPS data on unemployment, labor underutilization, labor force participation, employment, and earnings.
Unemployment
As a percentage of the labor force, the unemployment rate shows the number of persons who are jobless, looking for work, and available for work (all people who are employed or unemployed). The unemployment rate more than doubled during the 200709 recession3. (See illustration 1.) Since November 2007, the rate has risen by 5.3 percentage points, culminating at 10.0 percent in October 2009, when over 15 million people were unemployed. This was the highest unemployment rate since the aftermath of the 198182 recession, when it exceeded 10% for ten months in a row from September 1982 to June 1983. The rate began to fall in April 2010, with much greater drops beginning in January 2012. Between January 2012 and January 2016, the rate declined by 0.9 percentage point per year, from 8.3 percent to 4.9 percent. After remaining stable for the first three quarters of 2016, the rate began to decline in the fourth quarter of 2016 and continued to do so for the rest of the year. The unemployment rate had declined to 4.1 percent by December 2017, the lowest level since December 2000.
During the Great Recession, which began in 2008, how many jobs were lost?
Employers did not start hiring until 2010. For a long period, progress on closing the employment gap was modest, but by mid-2014, the economy had regained the 8.7 million jobs lost between the onset of the crisis in December 2007 and early 2010, and had continued to add jobs after that.
During the Great Depression, how many jobs were lost?
During the Great Depression, unemployment in the United States reached its greatest point of 25%. Approximately a quarter of the country’s workforce was unemployed. This translates to 15 million unemployed Americans in the United States.
The Great Recession, which lasted from 2007 to 2009, was the most severe economic downturn in the United States since the Great Depression of the 1930s. Although economic downturns are a common occurrence, the most recent one was notable for its length and depth. The slump was the longest since the Great Depression. It lasted eighteen months, longer than the sixteen-month recessions of 19731975 and 19811982; postWorld War II recessions lasted an average of 11.1 months from peak to trough. The Great Recession was also particularly severe; GDP and the number of jobs both fell by around 6%, while median family incomes fell by nearly 8%. The Great Recession was so named because of the long-term decline in employment that occurred even after the recession was officially over, as determined by the National Bureau of Economic Research’s dating procedure.1
As a result, unemployment rates soared during the Great Recession, home values and stock portfolios plunged, and millions of people’s lives were upended. According to some estimates, almost 30 million people lost their jobs, and the rate of long-term unemployment doubled from its previous high (Song and von Wachter 2014). The largest loss of wealth in the fifty years since the federal government began collecting data on wealth accumulation was an 18 percent reduction in household net worth, or more than $10 trillion (Jacobsen and Mather 2010). The Great Recession did not affect all subgroups of the population equally; rather, the effects of the economic slump varied depending on the gender, color, and ethnicity of its individuals. Men, the less educated, and African Americans were among those who suffered the most.
The Great Recession’s tremendous impact has spurred various social scientists to investigate its causes and repercussions for individuals, their families, communities, and society as a whole (see, for example, Grusky, Western, and Wimer 2011; Danziger 2013; Card and Mas 2016). Throughout the crisis and the early recovery, this research has studied economic outcomes such as the effects of unemployment on poverty, economic inequality, and earnings growth, as well as social outcomes such as marriage and fertility, education, health, politics, and child development. We have made significant progress in understanding some of the repercussions and mechanisms of the Great Recession as a result of these and other studies. Many issues about the causes and implications of the Great Recession and its aftermath remain unanswered.
After nearly ten years since the National Bureau of Economic Research (NBER) declared the official start of the Great Recession in December 2007, we are in a better position than we were before to dig deeper into the causes and consequences of the protracted recovery on workers, families, and communities. As a result, we can begin to assess with greater certainty whether the changes wrought by the Great Recession represent structural and transformative changes, whether they are continuations of structural changes that began in the mid-1970s, or whether they are merely temporary features associated with business cycles.
This issue of RSF: The Russell Sage Foundation Journal of the Social Sciences, like the previous collections of papers on the Great Recession, is devoted to understanding some of the peculiarities of the U.S. labor market during and after the Great Recession. The essays in this issue address a number of significant issues related to the nature of the Great Recession, as well as its economic and noneconomic implications. Despite significant effort, there is still debate over the origins of the Great Recession and the long-term labor market difficulties that followed. Several essays in the edition add novel empirical findings that improve our knowledge of alternative economic channels, thanks to the benefit of having access to data spanning the protracted recovery. Jesse Rothstein’s article examines how the role of wage mismatches and wage growth evolved before, during, and after the Great Recession, and how it has continued to evolve since the recession’s official end. The role of regional movement in the adjustment process is investigated by Brian L. Levy, Ted Mouw, and Anthony Daniel Perez. The role of establishments in employment destruction and job creation during the Great Recession is investigated by Erling Barth, James Davis, Richard Freeman, and Sari Pekkala Kerr. Henry S. Farber, Dan Silverman, and Till von Wachter give new evidence on the amount of hysteresis in the United States labor market during the recovery in the final piece. By assisting in the assessment of the Great Recession’s nature, these studies also provide light on other significant but understudied concerns, such as the reasons behind long-term wage losses and long-term unemployment following massive job loss during the Great Recession.
Several essays in this book look at how job loss and unemployment affect employees directly. Despite the fact that this subject has received more attention in the literature than others, there are still a few unanswered questions. William Dickens, Robert Triest, and Rachel Sederberg all contribute to the complicated but vital subject of whether workers can self-insure against income losses when they lose their jobs. Kelsey O’Connor, Gokce Basbug and Ofer Sharone, and Daniel Schneider, in three distinct articles, look into the social effects of unemployment on social outcomes (happiness, mental health, and adolescent fertility, respectively), as well as other crucial but understudied areas. This volume of the journal also examines the influence of the Great Recession on the labor market’s institutional environment, a topic that has received little attention in the literature thus far. Economic conditions can interact with and impact political and institutional environments, as evidenced by the political storm that erupted around public sector unions in the aftermath of the Great Recession. In their study of the evolution of unions in the context of the Great Recession, Ruth Milkman and Stephanie Luce address this subject.
What caused the high unemployment in 2009?
The housing bubble burst in 2007 and 2008, triggering a protracted recession that saw the jobless rate rise to 10.0 percent in October 2009, more than double its pre-crisis level.
Who is responsible for the 2008 Great Recession?
The Lenders are the main perpetrators. The mortgage originators and lenders bear the brunt of the blame. That’s because they’re the ones that started the difficulties in the first place. After all, it was the lenders who made loans to persons with bad credit and a high chance of default. 7 This is why it happened.
How long did it take for the economy to recover after the financial crisis of 2008?
- The stock market rose by 158 percent in the year leading up to the 1929 crash, and by around 33 percent in the year leading up to the Great Recession of 2009.
- In the 12 months leading up to the Coronavirus outbreak, stocks had only risen by about 14%.
- After bottoming out during the Great Depression, the markets took around 25 years to recover to their pre-crisis peak.
- In comparison, the Great Recession of 2007-08 took around 4 years, while the 2000s catastrophe took nearly the same amount of time.
- During the Great Depression, GDP decreased by around 27%, and during the Great Recession of 2007-08, it shrank by about 5%.
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What kind of occupations withstand a downturn?
8 industries with the best job security during a downturn
- Health-care services. People get sick and require medical care regardless of the state of the economy, thus the demand for health-care occupations is fairly stable, even during a downturn.
What was the solution to the Great Depression?
What was the final straw that brought the Great Depression to an end? That is possibly the most important question in economic history. If we can answer that, we will have a greater understanding of what causes and cures economic stagnation.
The Great Depression was the country’s worst economic downturn. Unemployment was always in double digits from 1931 until 1940. More over one in five Americans could not find job in April 1939, nearly ten years after the crisis began.
On the surface, World War II appears to bring the Great Depression to an end. More over 12 million Americans served in the military during the war, with a similar number working in defense-related jobs. Those war jobs appeared to have provided employment for the 17 million unemployed in 1939. As a result, most historians credit tremendous military spending as the catalyst for the Great Depression’s end.
Some economists, particularly Robert Higgs, have sensibly questioned this conclusion. Let’s be honest. The significance of world peace is called into question if the solution for economic recovery is to put tens of millions of people in defense plants or military marches, then have them build or drop bombs on our enemies overseas. Building tanks and feeding soldiers, while critical to win the war, became a crippling financial burden. We simply exchanged debt for joblessness. The national debt increased from $49 billion in 1941 to about $260 billion in 1945 as a result of the costs of World War II. To put it another way, the conflict had just postponed the problem of recovery.
Even President Roosevelt and his New Dealers saw that spending on the war was not the best option; they feared that after Hitler and Hirohito surrendered, the Great Depression would return, with higher unemployment than ever. FDR’s staff, on the other hand, was adamant about federal expenditure, which, as I explain in New Deal or Raw Deal?, had exacerbated the roots of the Great Depression in the 1930s.
Because winning the war came first, FDR had paused many of his New Deal projects during the war, allowing Congress to abolish the WPA, the CCC, the NYA, and others. When it became clear that the Allies would win in 1944, he and his New Dealers promised a second bill of rights to prepare the country for his New Deal resurrection. The right to “sufficient medical care,” a “good house,” and a “useful and remunerative work” were all included in the President’s bundle of new entitlements. These rights put obligations on other Americans to pay taxes for eyeglasses, “good” houses, and “useful” jobs (unlike free speech and religion), but FDR believed his second charter of rights was a step forward in thinking from what the Founders had envisioned.
Due to Roosevelt’s death in the final year of the war, he was unable to announce his New Deal resurrection. Most of the new measures, however, were supported by President Harry Truman. In the months following the war’s end, Truman delivered big speeches for a full employment bill, which would provide jobs and expenditure if individuals were unable to find work in the private sector. He also advocated a federal housing scheme and a national health-care program.
However, 1946 was not the same as 1933. FDR’s New Deal received substantial Democratic majorities in Congress and widespread public support in 1933, but stagnation and unemployment persisted. Truman, on the other hand, had only a slim Democratic majorityand no majority at all if the more conservative southern Democrats were excluded. Furthermore, the failure of FDR’s New Deal left fewer Americans hoping for a repeat performance.
In sum, Truman’s New Deal resurgence was stymied by Republicans and southern Democrats. They emasculated his bills at times and simply murdered them at others.
What triggered the 1929 stock market crash?
The stock market in the United States grew rapidly during the 1920s, peaking in August 1929 after a period of reckless speculation during the Roaring Twenties. By that time, output had slowed and unemployment had risen, resulting in stocks that were well in excess of their true value. Low wages, debt multiplication, a faltering agricultural sector, and an excess of huge bank loans that could not be liquidated were among the major factors of the stock market crash of 1929.
What if I told you that The New York Stock Exchange was established in 1817, but its roots may be traced back to 1792, when a group of stockbrokers and merchants signed a contract under a buttonwood tree on Wall Street.