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Krugman: Recovery means adding 300,000 jobs a month

Thumbnail image for jobs_nov.png

Paul Krugman builds a benchmark:

I thought it might be useful to create a sort of benchmark for the level of job growth that would really count as good news. I start from the fact that we’ve lost about 8 million jobs since the recession began — that’s the official number plus the preliminary estimate of the coming benchmark revision. I then take EPI’s estimate that we need to add 127,000 jobs a month. EPI points out that when you put these numbers together, they say that to return to pre-crisis unemployment within two years we’d have to add 580,000 jobs a month. That’s not going to happen.

But let’s set a more modest goal: return to more or less full employment in 5 years –which means seven lean years of depressed employment. To keep up with population growth over those 7 years, the United States would have had to add 84 times 127,000 or 10.668 million jobs. (If that sounds high, bear in mind that we added more than 20 million jobs over the 8 Clinton years). Add in the need to make up lost ground, and we’re at around 18 million jobs over the next five years — or 300,000 a month.

"It sort of puts that wonderful report that we only lost 11,000 jobs in perspective," Krugman concludes. I think I need a drink.

Graph credit: Steve Benen/The Washington Monthly.

By Ezra Klein  |  December 10, 2009; 4:30 PM ET
Categories:  Economy  
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Comments

Its baaad news. It would be great if the reality of the gap between where we are and how far we need to go just to tread water on employment it might wake some people up about the seriousness of the sh*thole the economy is in.

Posted by: srw3 | December 10, 2009 5:19 PM | Report abuse

I will take issue with your post based on one thing; you are assuming that the gains in employment will be constant. That is, it will be 300,000 every month in order for it to be a true recovery. Wouldn't the increase in jobs naturally scale with the economy?

Ex.
Month 1 - 30,000
Month 2 - 35,000
Month 3 - 47,000
Month 4 - 49,000

In short, jobs month-over-month will increase in an unsteady way, in spurts and starts, but increase they will, and in the latter stages of the recovery, they might very well exceed 300,000.

For comparison's sake, how many jobs were created each month during the Clinton years? I think that'd be worth seeing for an idea of how a recovery looks like, jobs/month-wise.

Posted by: flightofheaven | December 10, 2009 7:17 PM | Report abuse

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