You might have seen the graph on the top already — it was posted on Speaker Nancy Pelosi’s blog yesterday (by a staffer, of course…you don’t think Nancy actually does those sorts of things herself do you? She has a person for that, dear) and subsequently appeared all over the political blogs and even ended up on BoingBoing. I saw it first at David Isenberg’s blog.
Pretty effin’ scary. The red and blue lines represent job losses after peak employment for the 1990 recession (Bush I) and the 2001 recession (Clinton-Bush II). The green line headed straight for the bottom is the current recession. As Pelosi’s blog points out, it represents a loss of 3.6 million jobs.
Like a lot of graphs, though, it’s a little deceptive. It doesn’t take into account the differences in the size of the labor markets in each period. That doesn’t mean the loss of 3.6 million jobs isn’t significant, because that’s a pretty scary number, it just doesn’t give you an idea of how that relates to the overall job market. It has also been pointed out that Pelosi’s graph is comparing the current situation to two relatively mild recessions for the sake of over-emphasizing the plunge of the green line.
So observe the second graph, which comes from economists Susan Woodward and Robert Hall. Their graph compares the current recession to the recession of 1981 (Reagan), which was the most serious economic downturn since the Great Depression of the 1930s…until now. This graph re-indexes the 1981 numbers to the present size of the labor market to present a more realistic comparison.
Still, pretty effin’ scary because, as they point out in the text of the post, if the February job loss numbers continue the downward trend, Reagan’s Recession will get bumped down to Third Worst of All Time. We still have quite a bit of depth to plumb to get to the ~25% unemployment at the worst of the Great Depression, but even this graph makes it pretty evident we haven’t bottomed out yet.
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Well that’s frickin’ scary.
Feckin’ scary, even. While we are still a long way from Depression-like numbers, we’re going to get a lot closer to them a lot faster than anyone would care to think if that curve doesn’t start pulling up.
I hadn’t remembered the 2001 recession being worse than 1990′s, but I suppose your assessment, if not based on objective data, is more a function of your own experience.
Have a look at Nate Silver’s post today about the likely unemployment curve for this recession. His take is that, based on the last couple of recessions, job recovery won’t really start up until the middle of 2010.
This is consistent with what I heard a few weeks ago from Muskie School economist Charlie Colgan (audio here). Even without running the regression analyses, the steep slope of the curve so far seems to suggest a deeper and longer recession than either you or I remember. Cheery thought, I know, but I don’t think this is an issue of whether the glass is half full, half empty, or if you have twice as much glass as you need. It’s a matter of having a glass at all.