July 11, 2012
If history serves as a lesson, today's high unemployment rates will stick around for several years to come, Wall Street Journal analysis of government jobs reports shows.
The U.S. unemployment rate has hovered over 8 percent for more than three years, yet for seven decades after the Great Depression, the rate averaged 5.4 percent.
Job growth has averaged 125,000 new net jobs a month since 2009, when the labor market was at its worst.
At that job pace, unemployment rates won't even dip to 7 percent until around the end of this decade, the Journal reports.
The Labor Department expects the labor force to grow to 164.4 million by 2020 based on long-run population growth and a declining labor force participation rate, mainly due to retiring baby boomers.
"If the current recovery’s pace of household employment growth held on, the jobless rate would fall below 8 percent in 2014, but it would not reach 7.0 percent until late 2019," the Journal finds.
"That means this decade’s jobless rate would be about 7.9 percent, the highest for a decade since the Great Depression, beating out the reigning champ of the 1980s."
Even those with jobs are feeling the sting of a weak economy.
Pay raises haven't kept the pace of inflation, which remains low in itself.
For the fiscal year ended in March, wages and salaries increased an average of 1.7 percent, the Christian Science Monitor reports, citing Bureau of Labor Statistics data.
During that same timeframe, consumer prices rose 2.7 percent.
Don't expect employers to rush out and raise salaries any time soon either, experts say.
"We're expecting another economic slowdown in the U.S. in the second half of this year," says Gad Levanon, macroeconomic research director at The Conference Board, the Monitor adds.
"With the unemployment rate declining slowly, if at all, there are still a lot of job seekers, and employers will still have the upper hand in wage determination. So I expect very low wage growth even through 2013."