In terms of GDP and even the headline unemployment rate, the current crisis of the past 2 years is nowhere near being a “depression”. The stimulus programs and other monetary support programs have prevented a global banking crisis from becoming a depression, unlike 1930. However, there is one group that is suffering mightily. In this particular recession, let’s call it the “Great Recession”, the economy simply is not creating new jobs. As a result, for many of those unfortunate enough to become unemployed, there has been no new job to find. Our current unemployment rate may have stopped rising, but that’s largely because we’ve quit laying off and firing people. New jobs to employ the existing unemployed are simply not being created at anything near the rates they have in the past.
As a result, while 9.7% of the entire labor force was without a job in January 2009, a whopping 4.1% of the entire labor force has been without a job for over 26 weeks! This is way beyond anything we have seen since The Great Depression years. Unchecked, there will be enormous human costs and eventually social consequences of our current failed policies to create jobs.
Unemployed over 26 Weeks
The blue line is the number of workers unemployed for 27 weeks or more. The red line is the same data as a percent of the civilian workforce.
According to the BLS, there are a record 6.31 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.1% of the civilian workforce. (note: records started in 1948)