Sounding the Alarm: Update on the Economic Downturn
The expected growth in unemployment will generate much misery and an urgent need for policy action
In this new slide presentation, EPI’s president Lawrence Mishel examines the deterioration of the economy and the outlook ahead, showing the substantial rise in labor market distress and poverty overall, but especially for minorities.
This presentation examines the labor market characteristics of the current recession and the expected landscape for 2010. Unfortunately, the economy has deteriorated so much since October/November 2008 that our fears last November—that unemployment would exceed 10% in mid-2010 if there were no stimulus—will likely be realized even with the substantial, smart stimulus package in place. Consequently, there will be unacceptably high unemployment and associated income losses and poverty rates next year and beyond. For instance, some one-third of the workforce will be unemployed or underemployed at some point in 2010. Higher unemployment will drive child poverty to 27%—up from 18% in 2007—and black child poverty will exceed 50%. The analysis has led him to predict, for example, that black unemployment will reach 27.8% in Michigan and over 22% in California and Mississippi.
New York Times columnist Bob Herbert called Mishel’s analysis one that shows “the human toll caused by job losses on this vast scale.” (Read Herbert op-ed.) Mishel says “we must reexamine our policies and enact further public investments as stimulus, provide relief to the many families that are and will be struggling, and use government to directly generate jobs in areas where private sector activity is especially weak.” A front-page Washington Post story says new jobs are the missing ingredient in the long-awaited economic recovery and quotes Mishel saying that, despite forecasts that the recession will end by late 2009, “There is a ton of pain still in the pipeline.”
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