Lost jobs may not be coming back

With the nascent recovery seemingly on hold and more economic stagnation anticipated, economists are saying that the millions of jobs lost over the last few years simply may not be coming back even if the economy begins to grow robustly again. The LA Times reports:

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.”

This is obviously bad news for Michigan in particular, which for so long has relied on major manufacturing for its employment base. The Big Three automakers will not be returning to their previous size; the whole point of the managed bankruptcy they went through last year was to shrink them down to the point where they could be profitable with much lower sales.