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Will Employment Ever Return to Pre-Recession Levels?

Will Employment Ever Return to Pre-Recession Levels?

October 1, 2012
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Perhaps the biggest complaint I've heard with regards to this recovery is the lack of jobs. The national unemployment rate remains stubbornly above 8 percent, job creation is still sluggish in many areas, and many people have just stopped looking for work altogether. So the question on many people's minds is: Will employment levels ever return to pre-recession levels?

A similar question was posed to Ken Goldstein, an economist with The Conference Board. And his answer may surprise you.

According to Goldstein, "the labor force participation rate (share of the adult population working and looking for work) has been falling for three decades," particularly among young people, ages 16 to 24.

Why? Because the job market changed. More jobs required some college or technical training, so there were fewer unskilled jobs available. As a result, more of those younger people turned to college or vocational schools.

At the same time, many of the workers who were downsized in the 1990s chose to stay out of the workforce for quite a while because the same opportunities for advancement no longer existed, Goldstein says.

"With no career path (to move higher and earn more), many in this group dropped out of the labor force, and stayed out," he says. "Some may have drifted back over the next decade only to face the worst recession in nearly a century and then three and a half years to date of very slow job growth and slow wage and promotion growth."

So back to the original question: Will employment levels ever return to pre-recession levels?

According to Goldstein, the jobs market indeed appears to be stabilizing, and assuming the economy actually starts growing at a healthy rate again (2 percent annual growth rate), we should start to see growth in the workforce once again.

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