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VIDEOProductivity Is Killing the Middle Class
If there's any good news, it's that so many manufacturing jobs have been hollowed, many more can't be lost.
Needless to say, this chart demonstrates how severe this recession is, but there's a lot of other information in the other recession recoveries. The three previous recessions all took longer to recover than any older recessions, but the slowness of the recovery in the 2001 is most disturbing.
Wearing my non-professional economist hat, I always thought that old-fashioned recessions were due to inventory problems that caused manufacturers to lay employees off for a couple of months until orders picked back up. Then they'd be hired back, and if you look at all the recessions before 1974, the slope in job recoveries are remarkably similar. In other words, the percentage of job recoveries per month was very similar. If the recession was deeper, it took longer to get back but the recovery rate was the same. This was all before computerized inventory systems and “Just in Time” manufacturing practices were developed. Even the 1974 oil-related recession and the high interest-rate recessions of 1980 and 1981 all snapped back at about the same rate.
Then things started to change in 1990. That recession was shallow, but the recovery was longer than any previous recovery. Then the 2001 recession, dot-com fallout and 9/11 related, came along and the recovery was a disaster, although it probably will look pretty tame compared to the current mess we're in.
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