The December 2007 Level of Employment is Not a Useful Benchmark

The January jobs report was pretty bad—the economy added just 113,000. But there has nevertheless been some excitement on social media today about how close we are getting to regaining the pre-recession level of employment. We lost 8,695,000 jobs in the downturn, but we have since gained back 7,844,000, so we are now “only” 851,000 jobs below where we were when the recession began in December 2007. Yay?

No. The December 2007 level of employment is way below where we should be now.

The working-age population—and with it, the potential labor force—is growing all the time. Over the last six years and one month, we should have added 6.7 million jobs to keep up with growth in the potential labor force. Instead, we are down 851,000 jobs. This means that the total gap in the labor market—the number of jobs we need to get back to pre-recession labor market conditions—is 7.6 million. To fill that gap in three years—which would mean, all told, the Great Recession would have caused more than nine years of weak job opportunities and incomes for American workers—we would have to be adding 280,000 jobs per month.