In another sign of the slow pace of the economic recovery, the Department of Commerce reported last week that gross domestic product (GDP) rose by an annualized rate of 2% in the third quarter. The modest increase means that today, more than a year after the official end of the Great Recession, the U.S. economy remains smaller than it was when the recession began in late 2007.
“Never since World War Two has it taken so long to recover to pre-recession levels of GDP,” said Economist Josh Bivens. Although the pace of growth in the third quarter marks a modest increase from the 1.5% annualized rate of growth in the second quarter, it is a sharp deceleration from the 3.7% annualized growth rate show in the first quarter.
“While this historically low GDP recovery is largely a function of the severity of the recession, we are now five quarters into recovery, and these five quarters have seen exceptionally slow growth,” Bivens said in an analysisof the new GDP data. He also noted that since the boost provided by the 2009 Recovery Act is essentially over, it is unclear how the economy will be able to achieve an accelerated pace of growth in the coming year.
For recent black college graduates, a double whammy
A new EPI report highlights how recent graduates of color are experiencing disproportionately high rates of unemployment. For recent African American college graduates, the struggle to find a job is often compounded by a large student loan debt burden.
The paper, Graduate Employment Gap: Students of Color Losing Ground, builds upon earlier EPI research that has highlighted the struggles of both minority workers and recent graduates to find jobs. Author Algernon Austin, who heads EPI’s Program on Race and Ethnicity, stresses that high unemployment coupled with high debt bodes poorly not just for a worker’s short-term economic status, but also for his or her ability to build wealth over the long term. More than a quarter of African American bachelor’s degree recipients had over $30,000 in debt in 2008, the paper found.
The paper examined the unemployment rates for 16 to 24-year-olds who graduated from high school or college in 2010 and found that, for recent African American graduates, unemployment has increased 11 points since the beginning of the recession to 31.3%. For recent Hispanic high school graduates, the unemployment rate rose 15 points to 23.8% over the same period. Although college graduates have fared better, minority college graduates have also suffered large spikes in unemployment. Unemployment among recent college graduates has reached 15.4% for African Americans and 11.8% for Hispanics.
Because many young jobless are not counted in official unemployment rates, the paper also looked at employment-to-population ratios. By that measure, recent black high school graduates had an employment-to-population ratio of just 49.5% in the first half of this year, meaning that only half of those graduates who are not enrolled in school are working.
Almost all states still have a jobs deficit
The latest state unemployment data released on October 22 showed that 11 states still have unemployment rates of 10% or higher and that prospects for job seekers in most parts of the country have shown little or no improvement in recent months.
EPI’s latest Economic Snapshot offers an interactive map to show which states have lost the most jobs since the recession began in late 2007. While Nevada, which has lost 14.2% of its jobs and Arizona, which has lost 10.3% of jobs, top the list, the map shows that every state except for Alaska, North Dakota, and the District of Columbia has fewer jobs today than when the recession began.
Broad opposition to using student test scores to evaluate teachers
A statement written by a group of leading education scholars, policy makers, and test experts opposing the practice of using student test scores to evaluate teachers has seen widespread support, receiving more than 2,800 signatures since it was issued last week. Authors of the statement, who earlier this year collaborated on the EPI paper Problems with the Use of Student Test Scores to Evaluate Teachers, have found that the use of test scores to evaluate teachers is not only a flawed, but also a dangerous policy that could discourage effective teachers from working in high-need schools, or lead them to leave the profession entirely. The deadline for the signatures to the statement joining them in opposition to this practice is November 19, 2010.
EPI in the news
The New York Times quoted Economist Josh Bivens discussing the latest GDP growth, which he said was “just nowhere near enough to put downward pressure on unemployment.” The New Republic also cited his analysis of the new data. MarketWatch quoted EPI President Lawrence Mishel in a story about the ongoing jobs crisis and the need for additional aid to states to prevent the further loss of public-sector and private-sector jobs. The Atlanta Journal Constitution quoted Policy Analyst Kai Filion discussing Georgia’s high unemployment rate.
On Friday, November 5, EPI will host The Scarring Effects of Persistently High Unemployment, the first in a two-part discussion of the ways unemployment can impact health and life expectancy. The event will run from 2:00 pm to 3:30 pm at EPI’s offices.