Jobless recoveries
It used to take roughly 6 months for employment in the United States to recover after a recession. But in recent recessions, that span of time has increased dramatically.
The United States faces an immediate challenge: finding employment for 7 million people still out of work from the 2008–09 recession and reviving robust job creation in the decade to come. But simply employing a nation’s people is not enough. In a globalized, information-age economy, there is no more important economic priority than building a strong workforce.
To understand how America might meet these challenges, the McKinsey Global Institute launched a research project that combines extensive sector analysis, interviews with human resource executives, a proprietary survey of business leaders, and our own scenario analysis and modeling. We sought to shed new light on how companies use labor, where new jobs are likely to come from, and what conditions are needed to ensure robust and sustainable job creation.
The results of our analysis are sobering: only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising US competitiveness in the global economy, and better matching of US workers to jobs.
One of our key findings is that the United States has been experiencing increasingly lengthy “jobless recoveries” from recessions in the past two decades. It took roughly 6 months for employment to recover to its pre-recession level after each postwar recession through the 1980s, but it took 15 months after the 1990–91 recession and 39 months after the 2001 recession. At the recent pace of job creation, it will take more than 60 months after GDP reached its pre-recession level in December 2010 for employment to recover.