Wednesday, September 26, 2012

Bad news for unemployment

I have been arguing for a long time that there is no "automatic" bounce back from a serious structural blow to the real economy.  Today I have charts.  The first one is an update of a chart I have shown many times before.  The second one is new.  It shows the recovery times for various countries from shocks to their real economies.  My favorite examples come from Finland and Sweden where it required over 17 years to "recover" from the Recession of 1991.  Sweden and Finland are almost always at or near the top of any measurement of a successful social order.  If THEY required nearly two decades to recover from an economic event most folks in USA have never heard of, I think it safe to say that no one ever really recovers from structural shocks to the real economy.

This Jobs Chart Is Absolutely Horrifying

Matthew Boesler 
At Business Insider, we like to reference the "scariest jobs chart ever." It shows how long it has taken to recover all of the job losses since the beginning of past recessions. It's pretty self-explanatory:

Calculated Risk

This is bar none the worst experience the U.S. has had with unemployment since the Great Depression.

However, other countries have suffered worse in the wake of financial crises before.

NPR Planet Money brings this chart to our attention today from the Oregon Office of Economic Analysis to illustrate that point:
NPR Planet Money

Planet Money even suggested Business Insider use the title "THE SCARIEST JOBS CHART EVER COULD HAVE BEEN A LOT SCARIER."

It should also be noted that the U.S. is simply not far along enough in its recovery, per the chart above, to really be called "out of the woods" relative to past crises, but looking at the first four years, it seems to stack up pretty well.

Bottom line: financial crises are devastating for workers. Everywhere. more

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