Commentary | Economic Growth

Mishel on double-digit unemployment

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After rising for more than two-and-a-half years, the country’s unemployment rate crossed into double-digit territory in October with a jobless rate of 10.2%. This provides another sign of the severity of the current downturn, the very long road we face back to full employment and the urgent need for more policy action to create jobs and protect those who cannot find work.

With such a huge fire we need every hose we can find to put it out.

As bad as it sounds, the official 10.2% unemployment rate does not fully count the millions of workers who have been reduced to working part-time, or have given up looking for work altogether. The country now has an underemployment rate of 17.5% meaning that about one in six workers cannot find the amount of work they want. We are now short 10.9 million jobs, a massive hole that will take years to fill, even under the best-case scenario. According to many forecasts, the unemployment rate could be as high as 10.5% a year from now. The consequences of job loss on this scale are devastating, for workers and their families. EPI research shows that a double-digit unemployment rate will cause child poverty rates to soar, to 27% overall and to more than 50% for African American children.

The one silver lining to report is that the Recovery Act, by providing fiscal relief to states, tax relief for workers and other support such as extended unemployment insurance to individuals, has generated more than one million jobs so far this year and prevented the situation from becoming a lot worse. We now know that these policies helped the country recently achieve growth in output and end the longest period of economic contraction in the post-war period. The double-digit unemployment we face today should send an alarm that more needs to be done to stem the pain, generate millions more jobs and put the country on a path to shared prosperity.