The U.S. economy will eventually rebound from the Great Recession. Millions of American workers will not.
What some economists now project — and policymakers are loath to admit — is that the U.S. unemployment rate, which stood at 9.6% in August, could remain elevated for years to come.
The nation's job deficit is so deep that even a powerful recovery would leave large numbers of Americans out of work for years, experts say. And with growth now weakening, analysts are doubtful that companies will boost payrolls significantly any time soon. Unemployment, long considered a temporary, transitional condition in the United States, appears to be settling in for a lengthy run.
"This is the new reality," said Mark Zandi, chief economist at Moody's Analytics. "In the past decade we've gone from the best labor market in our economic history to arguably one of the worst. It's going to take years, if not decades, to completely recover from the fallout."
Major employers including automakers and building contractors were at the core of the meltdown this time around. Even when the economy picks up, these sectors won't quickly rehire all the workers they shed during the downturn.
Many small businesses, squeezed by tight credit and slow sales, similarly aren't in a hurry to add employees. Some big corporations are enjoying record profits precisely because they've kept a tight lid on hiring. And state and local governments are looking to ax more teachers, police officers and social workers to balance their budgets. Meanwhile, U.S. legislators have shown little appetite for a new round of stimulus spending.
It all points to a long slog for the nation's unemployed. In May, a record 46% of all jobless Americans had been out of work for more than six months. That's the highest level since the government started keeping track in 1948, and it's about double the percentage of long-term unemployed seen during the brutal recession of the early 1980s.
Jobless Americans such as Mignon Veasley-Fields of Los Angeles don't need government data to tell them that something has changed. A former administrative assistant at an L.A. charter school, she has searched fruitlessly for employment for more than two years. She's losing hope of ever working again.
"If I were 18, I'd say, 'I can bounce back.' But I'm 61," said Veasley-Fields, a dignified woman with graying, close-cropped hair. "It's really scary. It's like someone just put a pillow over your head and smothered you."
Laid off in June 2008 from her $45,000-a-year post, Veasley-Fields at first wasn't overly concerned. A college graduate, she had always enjoyed steady employment, including a long stint as a research manager at consulting firm McKinsey & Co. She crafted a crisp resume, networked through job clubs and navigated online employment sites like the seasoned researcher that she is.
But weeks stretched into months, with hundreds of unanswered job applications. California's jobless rate in July stood at 12.3%, the third-highest in the nation, behind Nevada and Michigan. Veasley-Fields' unemployment benefits have run out, her credit cards are maxed. She fears losing the tidy mid-Wilshire District bungalow where she and her 77-year-old husband are raising two granddaughters. Above all, she's stunned that a middle-class life that took decades to build could unravel so quickly. She recently visited a food bank to secure enough staples to feed the girls.
"I'm just hanging on a thread," she said.
Veasley-Fields suspects her age isn't doing her any favors. Indeed, 50.9% of unemployed workers 55 to 64 have been out of work at least 27 weeks. That's the highest percentage of long-term employment for any age group.
But young workers are suffering too. In August, the unemployment rate for workers 16 to 24 was 18.1%.
Research has shown that economic downturns can stunt the prospects of these new entrants to the job market for a decade or longer. Some college graduates unable to find jobs in their chosen fields are forced to trade down to lower-skilled, often temporary work. That translates into puny wages, missed opportunities and a slower climb up the career ladder.
The challenge is even tougher for those with less education. Juan Trillo, 23, was laid off from his $8-an-hour maintenance job two years ago. Trillo, who didn't finish high school, said he now finds himself competing against seasoned veterans for entry-level work.
He recently rode the bus from his home in Boyle Heights to interview with a company that administers professional exams. The job would consist mainly of rudimentary tasks like handing out tests and collecting them. Trillo, who sports a thin mustache and neatly trimmed hair, wore his nicest clothes — slacks, a tie and a fresh dress shirt. What he saw when he arrived made his heart sink.
"There was a waiting room full of people, all kinds of people, a lot of older people and a lot of them were college graduates. And I'm not," he said.