RECESSION OF 2007-2009

UNEMPLOYMENT RATE DURING THE RECESSION OF 2007-2009

Abstract

This research paper on the labor market impacts of the Great Recession of 2007-2009 is designed to achieve several purposes. First, we will track changes in the nation's overall unemployment rate from the month prior to the beginning of the recession in December 2007 through May 2009 and compare the magnitude of the rise in the unemployment rate over this 18 month period with those of the previous ten recessions since the end of World War II.

Findings will reveal that the rise in the overall unemployment rate over this 18 month period in the current recession is greater than that of any other recession since the end of World War II. The current economic downturn truly is a Great Recession if not a Depression as recently suggested by Richard Posner.5 Second, we will identify the growth of an array of labor market problems over the course of the current recession, estimate the pool of underutilized workers from November 2007 to May 2009, and compare the increases in underutilization rates of workers over the past six recessions in the United States.

Unemployment Rate During The Recession Of 2007-2009

Introduction

The current national economic recession that officially began in December 2007 has been taking a severe toll on U.S. labor markets and workers in recent months, with steep drops in nonfarm payroll employment, even larger reductions in the number of employed working age adults (16 and older), and rapidly rising unemployment and underemployment problems(Gao, Hayong, 2009). While the number of nonfarm wage and salary jobs has declined by 5.133 million over the past 15 months (through March 2009) and the official unemployment rate has risen to 8.5%, there has been continued debate about how severe the current recession is and how it compares to earlier recessions in the U.S. over prior decades.

This brief research paper is designed to provide a comparison of key aspects of the current recession which is still on-going with the previous 10 national recessions since the end of World War II. The findings will reveal that this current recession will be the worst since the Great Depression in terms of both the absolute and relative magnitude of the destruction of payroll jobs and the percentage point increase in the unemployment rate from the beginning of the recession to 16 months later. There are a variety of measures that can be used to describe a recession, including its duration and its severity in terms of reduced real output, incomes, and employment and increased open unemployment and other types of labor market problems, such as unemployment and misemployment. The number of underemployed (i.e., those working part-time but desiring full-time jobs) has increased very substantially since the fall of 2007, rising over 9 million in March of this year. The starting and ending months of the previous 10 recessions in the U.S. from the 1948-49 recession to the 2001 recession are displayed in Table. The beginning and ending dates are those of the National ...