According to a recent article in Time Magazine, unemployment could be even worse this time around:
This doesn't seem like a simple cyclical shift in unemployment,"
says Thomas Lam, an economist who tracks the U.S. economy at the
Singapore-based United Overseas Bank. "What we are seeing is a
structural problem in the U.S. economy, and that means it will take a
lot longer for the unemployed to find jobs." (See pictures of the global financial crisis.)
Unlike other economists, Lam looks beyond the total jobless number
to something called employment flow, which tracks the numbers of people
moving from the ranks of those receiving a regular paycheck to those
who aren't and vice versa. What Lam has found is disturbing. Currently,
people out of work have just a 22% chance of landing a new job within
the next month. That already makes this a worse market for job seekers
than at any time during the downturns of the early 2000s or 1990s,
which is as far back as Lam's data goes. And remember, we haven't got
to 8% yet.
The underlying problem is something called misallocation of human
capital. It's a fancy term for the idea that in the past few decades
the U.S. may have been producing too many M.B.A.s and not enough R.N.s.
Economists used to talk about it as one of those long-term risks that
most people shouldn't worry too much about. Now, the problem — like the
dangers of subprime lending, obscure financial instruments and so many
other things we didn't worry about — seems to actually be a problem.
And BusinessWeek is reporting that unemployment figures are probably understated:
As U.S. jobs disappear at a rapid clip, the official unemployment
figure seems understated. While November's 6.7% rate is a full 2%
higher than the same time last year, the rate remains well below the
10.8% postwar peak, reached in November 1982. One issue is that the
official unemployment number captures only a slice of the total
joblessness in the U.S. To be counted as unemployed in this statistic,
a worker must not have a job, be currently available for work, and have
actively sought employment within the last four weeks. In other words,
a lot of the jobless are left out of the government's tally.