Difficile immaginare che coloro che rinunciano a trovare lavoro si rassegnino a ... finire in miseria e poi morir di fame ?!
Change. We can !
probabilmente però saranno meno "inclined" a fare acquisti importanti come cambiare la macchina, etc.
It is difficult to gain perspectives that give clear indications of how unemployment in this recession compares with past downturns. We are familiar with the unemployment over time graph from the FRED data base at the St. Louis Federal Reserve, shown below:
From this graph, the current recession (at least to date) is second to the 1981-82 recession in impact on employment and exceeds the 1974-75 recession by 1.2%. All the other recessions would be inferred to have had a lesser effect on unemployment than the three big ones.
Another measure of the severity of unemployment on the economy is the average duration of unemployment, which is displayed in another familiar St. Louis Fed graph:
This metric makes the current recession appear to have much much more effect on unemployment than previous recessions, with 1981-82 coming in second. The recessions before 1981 all appear to have been much less impactful on long term unemployment than the more recent downturns.
There are a number of other factors that can be used to discuss the relative severity of impact on employment, such as reduction in average hours worked, increases in forced part-time employment (part-time for economic reasons), the number of people driven out of the labor force because they give up looking for work, etc. These have been discussed by many, including this author. However, there is one way to compare the severity of recessions based on how they affect unemployment that many of us have seen, but few (if any) have tried to make into a quantitative measurement. This measurement is based on the widely published graph from
Calculated Risk.
From this graph the relative magnitude of unemployment can be calculated for each recession back to 1948. This is done by measuring the areas under the curves, which give products of the percentage of job losses multiplied by the duration of job losses. For the purposes of discussion, I will give this a name:
the burden of unemployment.
The burden of unemployment can be divided into two parts: the burden before the maximum employment loss has occurred and the burden after employment starts to recover. The second part ends when the number of people employed regains the level before the decline. Hereafter, these will be referred to as the first half, and the second half, although that is a misrepresentation. In most cases the two "halves" are not equal.
The following table lists the burden of unemployment values for the current recession and the ten prior recessions. Recessions are listed in order of increasing burden.
In constructing this table it has been assumed that the maximum number of job losses has been reached for the current recession. Many believe that will not prove to be the case, so this table is subject to revision of the 299 burden value shown.
A number of conclusions can be made about the severity of recessions based on the burden of unemployment:
- The four most “burdensome” recessions are two of the oldest in this sample set and the two most recent.
- The three least “burdensome” recessions all had more burden in the second half (the part of the recession after the maximum occurred for job losses).
- Four of the five most “burdensome” recessions had less burden in the second half than in the first. In 1948 the two halves were about equal.
- The current recession has almost double the burden for the first half than was experienced for the recession with the second largest first half burden (2001). Note: The maximum in job losses may not yet have been reached.
- The current recession has already exceeded the total job loss burden of any of the ten preceding recessions.
For those who like to put a quantitative number on things, the concept of unemployment burden may be useful.
The Burden of Unemployment -- Seeking Alpha