The most recent recession has created a difficult, if not dire, employment problem for millions of Americans, and thousands of Utahns. As an illustration, after the national unemployment rate fell from about 6 percent in January 2003 to under 5 percent in January 2007, it skyrocketed to 10 percent in late 2009, and remains stubbornly high today.
But these numbers don’t even begin to tell the whole (human) story. Since losing their jobs between 2007 and 2010, many people have simply been unable to find work to pay the bills, put food on the table, or put their children through school. Tragically, the recession transformed what in years past would have typically been a difficult few months into a soul-crushing several years … and counting. The full cost of this tragedy – to individuals, families (especially children), and society as a whole – may not be fully understood for some time.
The study, from an economist at Northwestern University, analyzes theoretical and empirical issues about predicting national inflation and unemployment. The researcher argues that his study raises “the possibility” that the effects of the recession “may have permanently increased” the natural rate of unemployment – the rate of unemployment expected even in a good economy – and permanently decreased the ratio of America’s population that has a job (which “decreased sharply” since 2007 from 63 percent to 59 percent). He concludes, both aptly and disturbingly, that “in this sense the U.S. economy may have become more like Europe.”
The author acknowledges that there are respected economists who think these negative employment changes are, in fact, not permanent. Hopefully – for the well-being of individuals and families across Utah and America – these more optimistic economists are correct.
But if they are not, and the nation’s economy has taken a European-style shift, state and local policymakers are going to face a real challenge in figuring out how to prudently govern in the face of “the new normal” – and having principled elected officials is going to become all the more critical to maintaining limited government, encouraging a free market, strengthening the family, and protecting freedom.