What distinguishes this jobs recovery from others is the sheer scale of the job loss that preceded it. The economy has regained 3.6 million jobs since employment hit bottom in February 2010, but it is still missing nearly 10 million jobs — 5.2 million lost in the recession and 4.7 million needed to employ new entrants to the labor market. The Economic Policy Institute estimates that at the average rate of job creation in the last three months, it would take until the end of 2017, fully 10 years from the start of the Great Recession in December 2007, to return to the prerecession jobless rate of 5 percent.
And there is no guarantee we will ever get there. It took about four years to close the job gaps created by the recessions that began in mid-1981 and mid-1990. In the tepid expansion after the 2001 recession, the job gap had still not closed by 2007.
Without good jobs, families certainly can’t power the economy with spending. Incomes always fall in recessions, but they usually rebound and then reach a new high. That didn’t happen after the 2001 recession. Analysis of government data by Moody’s Analytics shows that median household income, in 2011 dollars, peaked at $56,000 in 2000, and did not rebound to that level. When the Great Recession hit, income fell again. Though there has been some progress in the last two years, median income, now at $52,000, is about where it was in 1997.